Economic rationalism is an Australian term in discussion of microeconomic policy, applicable to the economic policy of many governments around the world, in particular during the 1980s and 1990s. Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. ...

Near-equivalents include Thatcherism (UK), Rogernomics (NZ), and the Washington Consensus. To a large extent the term merely means economic liberalism, also called neoliberalism. However, the term was also 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'. Thatcherism is the system of political thought attributed to the governments of Margaret Thatcher, British Prime Minister from 1979 to 1990. ... The term Rogernomics, a portmanteau of Roger and economics, was created by analogy with Reaganomics to describe the economic policies followed by New Zealand Finance Minister Roger Douglas from his appointment in 1984. ... The Washington Consensus is a set of policies promulgated by many neoliberal economists as a formula for promoting economic growth in many parts of Latin America and other parts of the world by introducing various market-oriented economic reforms which are designed to make the target economy more like that... The liberal theory of economics is the theory of economics described by classical liberal authors such as Adam Smith or the French Physiocrats. ... For the school of international relations, see Neoliberalism (international relations). ... The Australian Labor Party or ALP is Australias oldest political party. ... Third way can refer to: The Third Way, an economic and political idea that positions itself between democratic socialism and laissez-faire capitalism, combining the ordoliberal social market with neo-liberalism. ...

The origins of the term are unclear. It was used by the social historians Weber and Tawney to describe the position of those Protestants who advocated the removal of medieval restraints on usury. However, it seems likely that it arose independently in Australia, and was derived from the phrase "economically rational", used as a favorable description of market-oriented economic policies. Its first appearances in print were in the early 1970s, under the Whitlam government, and it was almost invariably used in a favorable sense until the late 1980s. Weber is a surname of German origin, derived from the noun meaning weaver. The German pronunciation is ˈveˌbeʁ, while in English it is more likely to be pronounced ˈwɛˌbɚ or ˈweˌbɚ. In some cases, following migration to English-speaking countries, it has been anglicised to the English... Hon Gough Whitlam Edward Gough Whitlam (born July 11, 1916), Australian politician and 21st Prime Minister of Australia, was the only Australian Prime Minister to be dismissed by the Governor-General. ...

The now dominant negative use came into widespread use during the 1990 recession, and was popularised by a best-selling book Economic Rationalism in Canberra by Michael Pusey. Pusey can refer to: Edward Bouverie Pusey Stephen Pusey This is a disambiguation page — a navigational aid which lists pages that might otherwise share the same title. ...

Criticism of economic rationalism

The term "economic rationalism" is commonly used in criticism of free-market economic policies as amoral or asocial. In this context economic rationalism 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) In the politics of economics, the free market is a controversial rhetorical device used by political conservatives (generally in the United States and the United Kingdom) to promote the expansion of a European-based and controlled system of economic controls as market freedom —often associated with an agenda which claims...

The well-known statement Margaret Thatcher that "There is no such thing as society. There are individuals, and there are families" is often quoted in this context, though the interpretation of this statement is disputed. Margaret Hilda Thatcher, Baroness Thatcher, LG, OM, PC, FRS (born 13 October 1925) was Prime Minister of the United Kingdom from 1979 to 1990. ...

Support of economic rationalism

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, claiming that the term "economic rationalism" merely refers to rational policy formulation based on sound economic analysis, and does not preclude government intervention aimed at correcting market failure, income redistribution and so on. Market failure is a situation in which markets do not efficiently organize production or allocate goods and services to consumers (for example, a failure to allocate goods in a way some see as socially or morally preferable). ... Income redistribution or redistribution of wealth is a political policy usually promoted by members of the political left, and opposed by members of the political right. ...

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 Margaret Thatcher "there is no alternative" is frequently cited in this context.

See also

• Rational Man
• Supply-side economics
• libertarian

Homo economicus, or Economic man, is the concept in some economic theories of man as both rational and It is a term used for an approximation or model of Homo sapiens that acts to obtain the highest possible well-being for himself given available information about opportunities and other constraints... The neutrality of this article or section may be compromised by weasel words. Please see the relevant discussion on the talk page. ... See also Libertarianism and Libertarian Party Libertarian,is a term for person who has made a conscious and principled commitment, evidenced by a statement or Pledge, to forswear violating others rights and usually living in voluntary communities: thus in law no longer subject to government supervision. ...

Reference

1. Economic rationalism, by John Quiggin, Professor of Economics, James Cook University, Published as: Quiggin, J. (1997), 'Economic rationalism', Crossings, 2(1), 3-12.

1. http://www.publicbookshelf.com/public_html/Outline_of_Great_Books_Volume_I/economicr_cca.html