Economic rationalism

Economic rationalism is an Australian term often used in the discussion of macroeconomic policy, applicable to the economic policy of many governments around the world, in particular during the 1980s and 1990s. Economic rationalists tend to favour economically liberal policies: deregulation, a free market economy, privatisation of state-owned industries, lower direct taxation and higher indirect taxation, and globalization. The term is most frequently used to describe advocates of market-oriented reform within the Australian Labor Party, whose position was closer to what has become known as the "Third Way". More conservative equivalents include Rogernomics (NZ), Thatcherism (UK) and Reaganomics (US).

Criticism

The term "economic rationalism" is commonly used in criticism of free-market economic policies as amoral or asocial. In this context, it may be summarised as "the view that commercial activity... represents a sphere of activity in which moral considerations, beyond the rule of business probity dictated by enlightened self-interest, have no role to play" (Quiggin 1997). The well-known statement of Margaret Thatcher, "There is no such thing as society. There are individuals, and there are families," is often quoted in that context, but the interpretation of that statement is disputed. ==Support==

Support

Supporters of economic rationalism have presented two kinds of responses to criticisms such as those quoted above. Some have denied that such criticisms are accurate and claim that the term refers only to rational policy formulation based on sound economic analysis, and it does not preclude government intervention aimed at income redistribution, correcting market failure, etc. Others have accepted the accuracy of the description but have argued that the adoption of radical free-market policies is both inevitable and desirable. Another statement by Thatcher, "there is no alternative", is frequently cited in that context. == See also ==

Source: Wikipedia ↗

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