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:
“There could be no fairer destiny for any physical theory than that it should point the way to a more comprehensive theory in which it lives on as a limiting case.”
—Albert Einstein (1879–1955)
“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)
“The struggle for existence holds as much in the intellectual as in the physical world. A theory is a species of thinking, and its right to exist is coextensive with its power of resisting extinction by its rivals.”
—Thomas Henry Huxley (1825–95)