Today’s guest is Viktor Vanberg of the Walter Eucken Institute. We discuss a recent working paper of his entitled Individual Choice and Social Welfare: Theoretical Foundations of Political Economy.
What we call an economy, i.e. the nexus of economic activities and relations within some defined regional limits – e.g. a local, a national or the world economy –, has always been subject to measures taken, or constraints imposed by political authorities. How economies work is inevitably, and to a significant extent, contingent on the political environment within which they operate.
It is not surprising that economists studying the working principles of economic systems have rarely been content with confining their work to describing and explaining the economic realities they observe. Their ambitions always extended to passing judgments on the policies that shaped these realities and to providing guidance for what politics ought to do to improve economic matters

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