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The Economics of Control
Principles of Welfare Economics
Book • 1944
The Economics of Control, published in 1944, is a seminal work by Abba Lerner that bridges the gap between laissez-faire capitalism and socialist economic planning.
The book, based on Lerner's doctoral dissertation, proposes a policy approach that accepts the institutional framework of capitalist markets but recognizes the need for government intervention to address market imperfections and macroeconomic deficiencies.
It introduces the concept of 'functional finance,' which argues that government policy should focus on achieving full employment and price stability regardless of the impact on public debt.
The book also explores themes such as the optimal distribution of income, counter-speculation in foreign exchange markets, and the stability conditions in international trade, known as the 'Marshall-Lerner conditions'.
John Maynard Keynes praised the work, noting its original and grand contributions to economic theory.
The book, based on Lerner's doctoral dissertation, proposes a policy approach that accepts the institutional framework of capitalist markets but recognizes the need for government intervention to address market imperfections and macroeconomic deficiencies.
It introduces the concept of 'functional finance,' which argues that government policy should focus on achieving full employment and price stability regardless of the impact on public debt.
The book also explores themes such as the optimal distribution of income, counter-speculation in foreign exchange markets, and the stability conditions in international trade, known as the 'Marshall-Lerner conditions'.
John Maynard Keynes praised the work, noting its original and grand contributions to economic theory.
