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:
“The human species, according to the best theory I can form of it, is composed of two distinct races, the men who borrow and the men who lend.”
—Charles Lamb (1775–1834)
“There is in him, hidden deep-down, a great instinctive artist, and hence the makings of an aristocrat. In his muddled way, held back by the manacles of his race and time, and his steps made uncertain by a guiding theory which too often eludes his own comprehension, he yet manages to produce works of unquestionable beauty and authority, and to interpret life in a manner that is poignant and illuminating.”
—H.L. (Henry Lewis)
“By the “mud-sill” theory it is assumed that labor and education are incompatible; and any practical combination of them impossible. According to that theory, a blind horse upon a tread-mill, is a perfect illustration of what a laborer should be—all the better for being blind, that he could not tread out of place, or kick understandingly.... Free labor insists on universal education.”
—Abraham Lincoln (1809–1865)