CRISIS IN PUBLIC EXPENDITURE PLANNING*
| DOI | http://doi.org/10.1111/j.1467-9485.1980.tb00927.x |
| Author | LEO PLIATZKY |
| Date | 01 November 1980 |
| Published date | 01 November 1980 |
Scottrih
Journal
oJ
Polirical
Economy.
Vol.
27,
Nu
3,
November
1980
0
1980
Scottish
Economic
Society
0036
9292/80/001502ll7
1102.00
CRISIS IN PUBLIC EXPENDITURE
PLANNING*
SIR
LEO
PLIATZKY
It is a considerable distinction
to
be asked
to
give this talk today. It was
suggested to me that
I
should take some aspect of public expenditure as my
theme. It is now nearly three years since
I
was involved in that subject in the
Treasury and, though the Treasury remains my spiritual home,
I
now view
developments there from a safe distance. As
I
do
so,
I
am reminded irresistibly
of those lines in Lucretius’ great work on the nature of things which begin
:
Suave, mari magno turbantibus aequora ventis,
e terra magnum alterius spectare laborem.
How agreeable, he writes, when the winds are churning up the surface of the
great sea,
to
watch from dry land someone else’s exertions. Not, he says,
because one takes pleasure in anyone’s troubles, but because it is agreeable
to see what problems one is spared oneself.
I
should like to take this occasion to say something in retrospect about the
crisis in public expenditure which took place in
1975-76.
I
should like to
compare and contrast the situation then with the situation now, and to con-
sider whether or not public expenditure is in a state of crisis again and, if
so,
the nature of the crisis.
Decisions about public expenditure are of course essentially political.
But the sheer size of public expenditure makes it of great importance in the
economy. For that reason, if for no other, it would deserve the attention of
this Society and of economists generally.
In fact those who in the last few years have given the subject the most
sustained attention are the Friedmanite propagandists associated with the
Institute of Economic Affairs. Through their efforts, it is now clear, though
it is only gradually that
I
for my part have become aware of it, that an
intellectual counter-revolution took place, during their time out of office,
among the economic policy makers who are now in the government, a coup
as remarkable and important as the Keynesian palace revolution which
captured the Treasury during the last war and found expression in the
1944
White Paper
on
Employment Policy.
As
a result of this counter-revolution the White Paper commitment
to
maintain a high and stable level of employment, which had of course become
progressively more difficult to honour, has now lapsed, and public expendi-
ture is no longer seen as a principal instrument for generating a high level
of economic activity and employment.
*
Fifteenth Annual Lecture
of
the Scottish Economic Society delivered at the University
of
St
Andrews on
7
May
1980.
The Society acknowledges with gratitude the financial support
provided by Shell International for the Annual Lecture.
207
To continue reading
Request your trial