n this article Jasay discusses some of the implications of the recent referendum in Sweden which rejected the adoption of the Euro by Sweden, thus joining Denmark and the United Kingdom in staying outside of the Euro-zone. He is especially interested in the problem of fiscal "free-riding" by states which can now, under the Euro, expand their budget deficit with minimal direct cost to themselves but at the eventual cost of all members of the Euro-zone. The "free rider" problem is an issue Jasay takes up in some detail in the section "Addictive Redistribution" in his book The State
(Indianapolis: Liberty Fund, 1998), which is also available online at Econlib— http://www.econlib.org/library/LFBooks/Jasay/jsyStt.html
In forthcoming Reflections from Europe Jasay plans to discuss some implications of budget deficits and some likely effects of the new European constitution—two apparently unrelated questions which, as this month's article seeks to show, are in fact closely related.
David M. Hart
is Director of the Online Library of Liberty Project.
For more articles by David M. Hart, see the Archive.