Abstract and Keywords
The “dynamics of interventionism” refers to the central contribution of Austrian economics to the analysis of government failure. This chapter outlines that contribution in the areas of regulatory dynamics and transfer dynamics and focuses on the role of incentive problems and especially of knowledge problems in driving the mixed economy toward either interventionism or disinterventionism. These dynamics operate in the broad range of politicoeconomic systems that lie between laissez-faire capitalism and collectivist central planning. The chapter examines the rationale for various kinds of interventions, macroeconomic and microeconomic, traces their consequences, and explains why those consequences tend to generate systemic instability in the mixed economy. It also offers an overview of some of the milestones in the development of Austrian political economy.
Keywords: Austrian political economy, capitalism, collectivism, disinterventionism, government failure, incentive problem, interventionism, knowledge problem, mixed economy, regulatory dynamics, transfer dynamics
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