RuEn

Journal section "Theoretical and methodological issues"

The Concept of Comprehensive Income in the Economic Theory of the State

Rubinstein A.Y.

Volume 14, Issue 3, 2021

Rubinstein A.Ya. The concept of comprehensive income in the economic theory of the state. Economic and Social Changes: Facts, Trends, Forecast, 2021, vol. 14, no. 3, pp. 34–53. DOI: 10.15838/esc.2021.3.75.2

DOI: 10.15838/esc.2021.3.75.2

Abstract   |   Authors   |   References
The article presents a concept of the comprehensive income of producers of patronized goods; the concept helped to determine the economic content of the term “budget subsidy”, which in the Russian tradition is unreasonably interpreted as gratuitous aid from a paternalistic state. We substantiate this concept and the economic meaning of budget subsidy on the basis of a modified model of the Wicksell–Lindahl equilibrium as applied to patronized goods, the distinctive feature of which consists in their ability to satisfy the interests of individuals and the government that acts on behalf of society. We prove that such a modification of the equilibrium model is based on the use of the marginal utility theory in relation to the key term in the theory of patronized goods: public interest that is not reduced to individual preferences. Such an interpretation required that the absolutization of the marginalist principle of subjectivism based on “methodological individualism” should be abandoned. The presence of a public interest that is not reduced to individual preferences, and therefore the presence of the social utility function of the paternalistic state, fundamentally changes the content of the equilibrium. This approach resulted in the development of the concept of comprehensive income, which is defined as the sum of income from market sales and budget subsidies, deflated by different price indices. In order to summarize components of comprehensive income, we present our own methodology for constructing a “composite price index”. The normative model for budget subsidy based on the assessment of the social utility of patronized goods is the most important practical result of our work. With regard to its normative nature, the article presents a theoretical substantiation of the three normative conditions and derives the corresponding equations for model calculations of the budget subsidy value, tested on the example of national and municipal theaters using actual departmental statistics for the period from 2009 to 2019

Keywords

productivity, subsidy, income, paternalistic state, patronized goods, “cost disease”, comprehensive income, social utility, composite index

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