In the late 1950s, Richard Musgrave argued a state should intervene in the economy to do three things. First, the state has to use taxes and spending to stabilise the macroeconomy. You can’t do much if the amount you collect in taxes isn’t roughly in balance with how much you spend over the longer run. Secondly, the state should allocate resources the private sector can’t, to things like defence and vaccination. Thirdly, the state should redistribute resources from the rich to the poor, so that everyone can benefit. Ireland does resource allocation fairly well, although our experience with capital spending…
Charlie Kindleberger’s 1978 history book Manias, Panics, and Crashes acquired near-religious status with Wall Street traders after the global financial crisis.