Public Finance Essay

1377 WordsFeb 5, 20136 Pages
FACULTY OF BUSINESS ADMINISTRATION PUBLIC FINANCE: LEVEL 400 Lecture One What is Public Finance? Introduction “Public Finance is nothing else than a sophisticated discussion of the relationship between the individual and the state.” Vaclav Klaus, Former Czech Prime Minister. How should governments conduct their financial operations? What does government spend money on and how does it raise revenue? Government is a recent innovation, which evolved about 8,000 years ago when people developed agriculture and started to live in permanent settlements. The main reason why we have governments is that of achieving and guaranteeing a degree of social order that ensures the enjoyment of a maximum degree of physical security by members of that society. Politics gives rise to government. In other words, government is the result of politics. It is politics, which gave birth to government. Politics is a dirty game and a debasing profession. However, politics is feature that is common to every human society. Politics is an activity that cannot be avoided in any society. Politics is an activity that “arises from accepting the fact of simultaneous existence of different groups, hence different interests and different traditions within a territory ruled.” Bernard Crick “In Defence of Politics.” Harold Laswell said Politics is a “process of determining ‘who gets what, when and how’” Politics is unavoidable. We have it and take part in it because we need it. A Biblical Reference If you read I Samuel 8:11 -18, the people of Israel cried to Samuel to give them a king to rule or govern them like all other nations. Samuel did not want to do it, but the people persisted. Samuel had good reasons why he did not want a king and the people, also had good reasons why they should have a king like all other nations. “This will be the manner of the king that shall reign over you; he

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