Wicksell and the Scandinavian and public choice traditions Marianne Johnson Department of Economics, University of Wisconsin Oshkosh, Oshkosh, Wisconsin, USA Abstract Purpose – Wicksell’s contributions to welfare economics are viewed as largely aligned with Pareto efficiency and James Buchanan’s work in public choice. This conflicts with the Scandinavian representation of Wicksell as the forefather of the modern Swedish socialist economy. The purpose of this paper is to examine Wicksell’s approach to economics, particularly his understanding of “justice” as a way to understanding the evolution of two such divergent traditions. Design/methodology/approach – Original academic and popular press writings, as well as archival materials, are used to examine Wicksell’s economic philosophy and his position on key aspects of welfare economics, including the relative importance of allocation versus distribution in policy decision making. His influence on the American public choice tradition and Swedish welfare economics is examined. Findings – Both the public choice and Swedish welfare traditions based on Wicksell’s justice represent overly simplistic interpretations and fail to explain how Wicksell could have such a significant impact on the development of two such divergent approaches to public economics. Originality/value – Wicksell’s strong association with Pareto efficiency and the public choice school is unfortunate because de-emphasizes the importance Wicksell placed on distributional considerations and overly simplifies his use of the term “justice.” Similarly, the Swedish economists failed to appreciate efficiency arguments and chose instead to emphasize Wicksell’s distributional concerns. This paper sheds light on where the misapprehension arose and how it can be better understood. Keywords Economics, Wicksell, Justice, Distribution, Sweden, Public finance, United States of America, Scandinavia Paper type Research paper Introduction Knut Wicksell’s welfare economics was rooted in deeply held philosophical and ethical beliefs. A radical and progressive thinker, Wicksell did not confine his efforts to theoretical economics, but rather devoted significant time and effort to public lecturing and writing for the popular press, arguing that “I have always looked on the education of the Swedish people as my chief obligation” (Gardlund, 1996, p. 305). At a time, when Sweden had a limited franchise and was socially and religiously conservative, Wicksell championed the working classes, advocating reductions in the population growth rate, legalized contraception, expanded access to higher education, confiscation and redistribution of inheritances, extension of the franchise, and reform of the tax system, claiming that “the goal of economic activity must be the greatest possible social prosperity, individually and collectively” (Wicksell, 1958a [1904], p. 63, 1958b [1902]). Wicksell’s economic and social philosophy had a profound influence on the next generation of Swedish economists and can still be seen in the policies and institutions of the modern Swedish welfare state. This is perhaps why it seems so contradictory that The current issue and full text archive of this journal is available at www.emeraldinsight.com/0306-8293.htm JEL classification – B13, B31, B41 IJSE 38,7 584 International Journal of Social Economics Vol. 38 No. 7, 2011 pp. 584-594 q Emerald Group Publishing Limited 0306-8293 DOI 10.1108/03068291111139221