Adam Smith (1723-1790) wasn't only the
father of laissez faire capitalism; he also had a
profound influence on the principles of sound
public finance especially as it referred to the
revenue raising powers and activities of
central government. He was an enemy of
monopoly and distorted competition in
markets and an advocate of free trade as long
as the UK's military position was unharmed.
In respect of taxation of he wrote in an era
where taxation of the population was
characterized as being regressive meaning
that larger shares of the income of poorer
people were taken as revenue by the state
than the shares of richer people's income.
He proposed that there should be a
proportional tax -- where everyone should
pay the same proportion of their income
to the state. In Smith's time this was
viewed as a radical way of helping the
poorer people in society. He did not
appear to advance support for a
progressive tax system (where richer
people pay a higher share of their income
to the state than poorer people) -- It is not
wholly clear why he did not openly
support a progressive approach but it can
be surmised that if marginal tax rates
were constantly escalating and especially
at lower levels of income, this would act
as a disincentive for workers to offer more
hours of work to their employer.
Jean Bodin, (born 1530, Angers,
Francedied June 1596, Laon),
French political philosopher whose
exposition of the principles of stable
government was widely influential in
Europe at a time when medieval
systems were giving way to
centralized states. He is widely
credited with introducing the
concept of sovereignty into legal and
political thought.

His contribution to public finance was

that, he posited three principles of
finance:
a. To follow a wise method in raising
revenues.
b. To expand them with prudence.
c. To save a part for possible future
needs.

Thomas Hobbes, (born April 5, 1588,

Westport, Wiltshire, England
died December 4, 1679, Hardwick
Hall, Derbyshire), English philosopher,
scientist, and historian, best known for
his political philosophy, especially
as articulated in his
masterpiece Leviathan (1651). Hobbes
viewed government primarily as a
device for ensuring collective security.

His contribution to public finance was

that, he formulated the exchange
theory of public finance. He also
declares that dependence on the
domain was futile.
 An Italian-born French civil engineer and
economist. He was born in Fossano, Italy then
under the rule of Napoleon Bonaparte. At the
age of ten he immigrated to France with his
family where he studied in Versailles winning
a Physics prize at graduation. He then studied in
the cole Polytechnique as a civil engineer. He
gradually took on more responsibility in various
regional posts. He received a Lgion d'honneur
in 1843 for his work on the French road system,
and shortly after moved to Paris. He also studied
flood management in 1848 and supervised the
construction of the Paris sewer system. He died
in Paris.

Engineering questions led to his interest in economics, a subject in which he was self-taught. His
1844 article was concerned with deciding the optimum toll for a bridge. It was here that he
introduced his curve of diminishing marginal utility. As the quantity of a good consumed rises,
the marginal utility of the good declines for the user. So the lower the toll (lower marginal
utility), the more people who would use the bridge (higher consumption). Conversely as the
quantity rises (people allowed on the bridge), the willingness of a person to pay for that good
(the price) declines.

French economist Leon Walras developed the idea of

marginal utility and is thus considered one of the
founders of the marginal revolution. But Walrass
biggest contribution was in what is now called general
equilibrium theory. Before Walras, economists had
made little attempt to show how a whole economy with
many goods fits together and reaches an equilibrium.
Walrass goal was to do this. He did not succeed, but he
took some major first steps. First, he built a system of
simultaneous equations to describe his hypothetical
economy, a tremendous task, and then showed that
because the number of equations equaled the number
of unknowns, the system could be solved to give the
equilibrium prices and quantities of commodities. The
demonstration that price and quantity were uniquely
determined for each commodity is considered one of
Walrass greatest contributions to economic science.
 A British economist, a successful businessman,
financier, and speculator, and amassed a
considerable fortune. He is credited with
systematizing economics in the nineteenth
century, and was one of the most influential of the
classical economists. Despite his relatively short
career, Ricardo's work in economics was
foundational to many later developments in the
field. Both those who favored his laissez-faire
capitalism, and those who opposed it, drew on his
work despite their abstract formulation.
- His law of rent was probably Ricardo's most
notable and influential discovery. It was based
on the observation that the differing fertility of
land yielded unequal profits compared to the
capital and labor applied to it. His other great
contribution, the law of comparative cost, or
comparative advantage, demonstrated the
benefits of international specialization of the
commodity composition of international trade.

An Italian economist, sociologist, and philosopher.

He was born on July 15, 1848, in Paris, France. His
father was an Italian civil engineer and his mother
was French. Trained in engineering, Pareto applied
mathematical tools to economic analyses. While
he was not effective in promoting his findings
during his lifetime, moving on to sociological
theorizing, Pareto's work, particularly what was
later referred to as the 80-20 principlethat 80
percent of the wealth belongs to 20 percent of the
populationhas been applied, and found useful,
in numerous economic and management
situations. Pareto's recognition that human
society cannot be understood thoroughly through
economic analyses alone, since human beings are
not motivated by logic and reason alone but
rather base decisions on emotional factors
inspired the development of the "behavioralist"
school of economic thought.
 A Filipina politician who was the 11th President of
the Philippines, the first woman to hold that office
and the first female president in Asia. Aquino was
the most prominent figure of the 1986 People
Power Revolution, which toppled the 21-year
authoritarian rule of President Ferdinand E. Marcos
and restored democracy to the Philippines. She was
named Time magazine's "Woman of the Year" in
1986. Prior to this, she had not held any other
elective office.
- Sought to bring back fiscal discipline in order as it aimed
to trim down the government's budget deficit that
ballooned during Marcos' term through privatization of
bad government assets and deregulation of many vital
industries. It was also during Aquino's time that vital
economic laws such as the Built-Operate-Transfer Law,
Foreign Investments Act and the Consumer Protection
and Welfare Act were enacted.
- Promulgated two landmark legal codes, namely, the
Family Code of 1987, which reformed the civil law on
family relations, and the Administrative Code of 1987,
which reorganized the structure of the executive branch
of government and to enact local taxation measures and
assured them of a share in the national revenue.

A Filipino politician who was President of the

Philippines from 1965 to 1986. Economic performance
during the Marcos era was strong at times, but when
looked at over his whole regime, it was not
characterized by strong economic growth. Penn World
Tables report real growth in GDP per capita averaged
3.5% from 1951 to 1965, while under the Marcos
regime (1966 to 1986), annual average growth was
only 1.4%. To help finance a number of economic
development projects, such as infrastructure, the
Marcos government engaged in borrowing money.
Foreign capital was invited to invest in certain
industrial projects. They were offered incentives
including tax exemption privileges and the privilege of
bringing out their profits in foreign currencies. One of
the most important economic programs in the 1980s
was the Kilusang Kabuhayan at Kaunlaran (Movement
for Livelihood and Progress). This program was started
in September 1981. Its aim was to promote the
economic development of the barangays by
encouraging the barangay residents to engage in their
own livelihood projects. The government's efforts
resulted in the increase of the nation's economic
growth rate to an average of six percent to seven
percent from 1970 to 1980.
 A Canadian-born professor of economics and Nobel
Laureate. Vickrey was awarded the 1996 Nobel
Memorial Prize in Economic Sciences with James
Mirrlees for their research into the economic theory
of incentives under asymmetric information,
becoming the only Nobel laureate born in British
Columbia. One of the most important economic
principles is that incentives affect peoples behavior.
It is also true that government officials virtually never
know as much about the people their policies affect
as the people affected know about themselves. In
economics, the fancy term for this fact is
asymmetric information. How, then, does a
government that is conscious of its ignorance set up
incentives so that people will act in ways that are
useful, not only to themselves but also to others?
William Vickrey spent his career studying this issue,
in areas ranging from income taxation to auction
design to subway fares and highway tolls. In the
process, he made some striking discoveries. Vickrey
also did early work in the theory of sealed-bid
auctions. He showed that a second-price auction,
whereby the highest bidder gets the item but pays
only the price bid by the second-highest bidder,
causes the good to be allocated to the person who
values it most.

A British economist and winner of the 1977 Nobel

Memorial Prize in Economic Sciences jointly with the
Swedish economist Bertil Ohlin for their
"pathbreaking contribution to the theory of
international trade and international capital
movements." Meade was brought up in the city of
Bath, Somerset in south-west England. The basic
assumptions for J.E.Meade's model are as follows:
(1) The economy in question is a closed economy
with no relationship with the outside world. (2) There
is no government activity involving taxation and
expenditure. (3) Perfect competition exists in the
market. (4) Constant returns to scale prevails in the
economy. (5) There are only two commodities-
consumption good and a capital good. (6) There is
full employment of land, labour and machinery. (7)
All machinery are alike and the ratio of labour to
machinery can be easily varied, hence there is
perfect malleability of machinery. (8) There is perfect
substitutability between capital goods, consumption
goods and any given stock of machines, no matter
how old or new they are, a certain percentage gets
replaced every year. Meade calls this phenomenon
the assumption of depreciation by evaporation.
An American economist of German heritage who
has been called the father of modern public
finance. His most cited work is The Theory of Public
Finance (1959), described as "the first English-
language treatise in the field." and "a major
contribution to public finance thought." Mr. Musgrave
had a different view, his wife said. He saw the
government as having an important economic role
and developed a theory on the way taxes and other
factors interact in areas where goods and services
roads, schools, courts and national defense, for
example were best provided by the government.
In essence, Mr. Musgraves theory broke down
governmental economic activity into three parts: the
allocation of resources; the distribution of goods and
services; and the stabilization of the broader
economy. The theory paid particular attention to the
process of determining what people want and need
in the absence of a pricing system.

Edgeworth was an Irish economist (1845-1926),

professor of Political Economy at the University of
Oxford, whose most important contributions to
economic science were statistical in nature, primarily
in the area of index numbers, highlighting also the
mathematical apparatus needed for the drawing of
indifference curves and the contract curve, from the
first analysis of W.S. Jevons. Although it would be
Vilfredo Pareto, in 1906, who would draw an
indifference map, as we know the representation of
various indifference curves nowadays. Edgeworth
designed what is now known as an Edgeworth box,
which basically allows us to compare two
mathematical functions represented as curves using
the same axis. In 1894, Edgeworth published a
diagram in Theory of International Values
explaining the terms of trade from a geometrical
perspective, basing this article on J. S. Mills work
on trade and his theory on reciprocal demand.
Irving Fisher was an American economist (1867-
1947), professor of Political Economy at Yale
University, known for his contributions to quantitative
economics (works such as The Nature of Capital
and Income, 1906, and The Purchasing Power of
Money, 1911) and especially the development of
index numbers. He also addressed interest rates, in
his opinion governed by two interacting forces: the
impatience of individuals in terms of exchanging
future income for current income, and the principle
of yield paid by doing so. In his Appreciation and
interest, 1896, Fisher showed the relation between
the nominal interest rate (i), the real interest rate (r)
and inflation () using an equation, known
nowadays as the Fisher equation:
ir+

Pigou was a British economist (1877-1959), disciple

of Alfred Marshall, whom he succeeded as a
professor at Cambridge. Pigou is remembered
above all as a precursor of welfare economics, for
his books Wealth and Welfare, 1912, and The
Economics of Welfare, 1920, in which he used
measures of national income and its distribution in
order to understand how wealth and welfare are
related. He is also remembered for making a
distinction between different degrees of price
discrimination.