Theory
There are two main strains in economic thought on economic efficiency, which respectively emphasize the distortions created by governments (and reduced by decreasing government involvement) and the distortions created by markets (and reduced by increasing government involvement). These are at times competing, at times complementary – either debating the overall level of government involvement, or the effects of specific government involvement. Broadly speaking, this dialog is referred to as Economic liberalism or neoliberalism, though these terms are also used more narrowly to refer to particular views, especially advocating laissez faire.
Further, there are differences in views on microeconomic versus macroeconomic efficiency, some advocating a greater role for government in one sphere or the other.
Read more about this topic: Economic Efficiency
Famous quotes containing the word theory:
“It makes no sense to say what the objects of a theory are,
beyond saying how to interpret or reinterpret that theory in another.”
—Willard Van Orman Quine (b. 1908)
“... the first reason for psychology’s failure to understand what people are and how they act, is that clinicians and psychiatrists, who are generally the theoreticians on these matters, have essentially made up myths without any evidence to support them; the second reason for psychology’s failure is that personality theory has looked for inner traits when it should have been looking for social context.”
—Naomi Weisstein (b. 1939)
“The great tragedy of science—the slaying of a beautiful theory by an ugly fact.”
—Thomas Henry Huxley (1825–1895)