Goethe on Demonic Fiscal Policy

Abstract

Very few readers of J. W. von Goethe's Faust have recognized that he is making a moral claim which was a commonplace among the British classical economics. The British classical economists raised a fundamentally moral objection to the public debt. It was, they said, a way of making destructive policies seem less onerous. This moral criticism of public debt has been made now and again in modern economics; nonetheless, this point has gone largely unremarked in later moral discussions. To some extent this is an unescapable consequence of intellectual specialization: how many moralists of stature have worried about an appropriate fiscal policy? Moreover, when moralists do turn their attention to problems in which economists are interested, their contributions all too often suffer from elementary, but fatal, technical defects.