The Economic Role of the State

Co-edited with Peter Leeson

Cheltenham, UK: Edward Elgar Publishing, Inc. (2015)




The Economic Role of the State presents a comprehensive collection of seminal works from David Hume through to Barry Weingast. Including an original introduction, the volume covers the main theories and justifications for and against state intervention as they have developed over two centuries. It also incorporates an institutional approach to the role of the state in enforcing ‘the rules of the game’ of the economy as well as examining specific issues including market failure, rent-seeking and regulation. Economists and political scientists alike will find this to be the ideal guide to the classic and modern arguments surrounding the state’s role in the economy.


Purchase this book at

Table of Contents

Introduction Peter J. Boettke and Peter T. Leeson



1. David Hume (1985 [1777]), ‘Of the Independency of Parliament’, in Eugene F. Miller (ed.), Essays: Moral, Political, and Literary, Essay VI, Indianapolis, IN, USA: Liberty Fund, Inc., 42–46


2. David Hume (2000), ‘Of the Origin of Justice and Property’, ‘Of the Rules, Which Determine Property’ and ‘Of the Transference of Property By Consent’, in David Fate Norton and Mary J. Norton (eds), A Treatise of Human Nature, Book 3: Part 2: Section 2, Section 3 and Section 4, Oxford, UK and New York, NY, USA: Oxford University Press, 311–31


3. Adam Smith (1961 [1776]), ‘Of the Sources of the General or Public Revenue of the Society’, in Edwin Cannan (ed.), An Inquiry into the Nature and Causes of the Wealth Of Nations, Book V, Chapter II, London, UK: Methuen & Co. Ltd, 341–440


4. Frédéric Bastiat (1850 [2007]), The Law, Auburn, AL: Ludwig von Mises Institute, 1–55


5. Jean-Baptiste Say (2001 [1880]), ‘Of the Effect of Government Regulations Intended to Influence Production’, in A Treatise on Political Economy, Book I, Chapter XVII, Ontario, Canada: Batoche Books, [translated by C.R. Prinsep], 60–83


6. Simon Newcomb (1870), ‘The Let-Alone Principle’, North American Review, CCXXVI (226), January, 1–33


7. Herbert Spencer (1981 [1843]), ‘The Proper Sphere of Government’, in The Man Versus the State: With Six Essays on Government, Society, and Freedom, Indianapolis, IN, USA: Liberty Fund, Inc., 181–263



8. John Stuart Mill (1909 [1848]), ‘Of the Grounds and Limits of the Laisser-faire or Non-interference Principle’, in Principals of Political Economy with Some of Their Applications to Social Philosophy, Book IV, Chapter XI, London, UK: Longmans, Green and Co., 304–46


9. John Maynard Keynes (2012 [1926]), ‘The End of Laissez-Faire’, in Elizabeth Johnson and Donald Moggridge (eds), The Collected Writings of John Maynard Keynes. Volume IX: Essays in Persuasion, Cambridge, UK and New York, NY, USA: Cambridge University Press, 272–94


10. R.G. Tugwell (1932), ‘The Principle of Planning and the Institution of Laissez Faire’, American Economic Review, 22 (1), March, 75–92


11. J.E. Meade (1954), ‘External Economies and Diseconomies in a Competitive Situation’, Economic Journal, 62 (245), March, 54–67


12. Paul A. Samuelson (1954), ‘The Pure Theory of Public Expenditure’, Review of Economics and Statistics, 36 (4), November, 387–9


13. Francis M. Bator (1958), ‘The Anatomy of Market Failure’, Quarterly Journal of Economics, 72 (3), August, 351–79


14. George J. Stigler and Paul A. Samuelson (1963), ‘A Dialogue on the Proper Economic Role of the State’, Selected Papers No. 7, Graduate School of Business, University of Chicago, 3–39



15. Ludwig von Mises (2005), ‘Liberal Economic Policy’, Liberalism: The Classical Tradition, Chapter 2, Indianapolis, IN, USA: Liberty Fund, Inc., 37–75


16. Friedrich A. Hayek (1980), ‘Individualism: True and False’, in Individualism and Economic Order, Chapter I, Chicago, IL, USA and London, UK: University of Chicago Press, 1–32


17. R.H. Coase (1959), ‘The Federal Communications Commission’, Journal of Law and Economics, II, October, 1–40


18. R.H. Coase (1960), ‘The Problem of Social Cost’, Journal of Law and Economics, III, October, 1–44


19. Murray N. Rothbard (1974), ‘The Anatomy of the State’, in Egalitarianism as a Revolt Against Nature and Other Essays, Washington, DC, USA: Libertarian Review Press, 34–53


20. James M. Buchanan (1976), ‘The Justice of Natural Liberty’, Journal of Legal Studies, 5 (1), January, 1–16


21. Gordon Tullock (1967), ‘The Welfare Costs of Tariffs, Monopolies, and Theft’, Western Economic Journal, 5 (3), June, 224–32


22. Armen A. Alchian (2006), ‘Some Economics of Property Rights’, in The Collected Works of Armen A. Alchian, Volume 2: Property Rights and Economic Behavior, Part 1, Indianapolis, IN, USA: Liberty Fund, Inc., 52–67


23. Mancur Olson (1993), ‘Dictatorship, Democracy, and Development’, American Political Science Review, 87 (3), September, 567–76



24. David Friedman (1989), ‘What is Anarchy? What is Government?’, in The Machinery of Freedom: Guide to a Radical Capitalism, Chapter 28, New Rochelle, NY, USA: Arlington Publishers, 151–4


25. Jack Hirshleifer (1995), ‘Anarchy and its Breakdown’, Journal of Political Economy, 103 (1), February, 26–52


26. Avinash K. Dixit (2004), ‘Economics With and Without the Law’, in Lawlessness and Economics: Alternative Modes of Governance, Chapter 1, Princeton, NJ, USA and Oxford, UK: Princeton University Press, 1–23, references


27. James E. Rauch (2005), ‘Getting the Properties Right to Secure Property Rights: Dixit’s Lawlessness and Economics’, Journal of Economic Literature, XLIII (2), June, 480–7  


28. Timothy Frye and Andrei Shleifer (1997), ‘The Invisible Hand and the Grabbing Hand’, American Economic Review, 87 (2), May, 354–8  


29. Andrei Shleifer (2009), ‘The Age of Milton Friedman’, Journal of Economic Literature, XLVII (1), March, 123–35 


30. Daron Acemoglu and Simon Johnson (2005), ‘Unbundling Institutions’, Journal of Political Economy, 113 (5), October, 949–95  


31. Barry R. Weingast (1995), ‘The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development’, Journal of Law and Economic Organization, 11 (1), April, 1–31