Paternalism and the Public Household. On the Domestic Origins of Public Economics

Abstract

The ancient Greek conception of oikonomia is often dismissed as irrelevant for making sense of the contemporary economic world. In this paper, I emphasise a thread that runs through the history of economic thought connecting the oikos to modern public economics. By conceptualising the public economy as a public household, Richard A. Musgrave (1910Musgrave ( -2007 set foot in a long tradition of analogy between the practically oriented household and the state. Despite continuous references to the domestic model by major economists throughout the centuries, the analogy has clashed with liberal values associated with the public sphere since the eighteenth century. Musgrave's conceptualization of public expenditures represents one episode of this continuing tension. His defence of merit goods, in particular, was rejected by many American economists in the 1960s because it was perceived as a paternalistic intervention by the state. I suggest that the accusation of paternalism should not come as a surprise once the 'domestic' elements in Musgrave's conceptualisation of the public sector are highlighted. I develop three points of the analogy in Musgrave's public household (the communal basis, a central direction, and consumption to satisfy needs) which echo recurring patterns of thought about the state.

Merit Goods

“…Wagner observed that public expenditures were increasing in Western countries and rationalized this trend as a civilizing mission of the State. This was part of the intellectual background against which Musgrave coined the concept of merit wants (Desmarais-Tremblay, 2017, 2021b. Thus, when looking for solid philosophical foundations to merit goods, Ver Eecke (1998) tried to rationalize them in terms of Kantian and Hegelian practical philosophy, arguing that "[t]he necessity of politically imposed institutional arrangements for the economy to function well and humanely demonstrates the validity of Hegel's claim that the economic domain is an ethical arrangement."…”