Swedish Fiscal Doctrine: The Collective Choice Approach

There is an unmistakable affinity between Austrian and Swedish perspectives of the public economy. On may add that the Swedish fiscal doctrine is a natural extension of the principles set forth by Wieser and Sax. The two Austrian political economists were responsible for resting the entire fiscal process on the platform of subjective valuation, thus making the theory of the public economy an integral part of political economy. To Sax, collective valuation had its full explanation in the general, that is, individual nature of value. In his characterization, both Robinson Crusoe as a single soul and an entire nation of a hundred million people would obey one and the same law in their economic transactions, that of subjective value.1 For, all goods, private or public, derived their value from whatever uses they were intended to serve. This is not to say that there exists a perfect parallel between the two categories of goods. In the public economy, due to the variability in personal wants and incomes, the same amounts of collective goods are valued differently. Alternatively, the same amounts of value are expressed in different quantities of collective goods. Wieser expands on Sax’s point: [E]very intending purchaser who goes on to the market calculates to himself, or ought to calculate, the money equivalent of the goods he wishes to buy, i.e., the sum of money whose value to him will equal the value of the goods, so that it is not economically permissible for him to go beyond it.