Economic theories are not simple dichotomies

July 6, 2010 at 5:56 am Leave a comment

From the Herald some economic food for thought: “Present-day conservatives like to link themselves with Friedrich Von Hayek and refer to themselves as followers of the “Austrian school” of economists. This, they believe, shows opposition to Paul Krugman and modern day liberal economists and opposition to the teachings of John Maynard Keynes.” Read the article here.

What economic thinking should underlie Project Concentrus? Economic development, by its nature, is interventionist. It suggests we should intervene in the marketplace by policy action to help one geographic area compete over another. The conservatives in the field tend to rely on policies and practices that strengthen the supply side, which means strengthening the local and state business climate, improving infrastructure and workforce, and other actions that make places more competitive for economic and business growth. The liberals in the field tend to focus attention on the demand side; that is identifying target industries that should receive special attention (like Boeing and aerospace), using tax and financial incentives to promote business investment and job development, and providing hands-on assistance to businesses (large and small) to give them an advantage for growth. Most geographic areas use a combination of conservative and liberal policies to encourage and assist economic development. Your thoughts?

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Entry filed under: Economic Theory. Tags: , , , , , .

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