Budgeting and Public Debt within a System of Cooperative Democracy

Abstract

This paper is the penultimate draft of the fourth of six chapters of a book titled Public Debt: An Illusion of Democratic Political Economy. This essay establishes an analytical benchmark of a democratic system in which political outcomes reflect genuine consensus among the participants. This benchmark traces to Antonio de Viti de Marco’s construction of contrasting models of democratic action. The theory of a wholly cooperative democratic regime provides a benchmark against which to examine actual democratic processes and arrangements. In this respect, and looking ahead, de Viti recognized that democratic regimes were not passive reflectors of individual preference orderings because they entailed relationships of domination-and-subordination.

Keywords: cooperative state as ideal type; government as low-cost borrower; public debt as shell game; problems of scale

JEL Classification: D72, E30, E62, H62