On the Public Benefit of “Private Vices” or a View From the XVIII Century Through the Prism of a Dynamic Model of Economic Reproduction

The article presents the results of a study assessing the impact of economic freedom on economic growth and public welfare, which is based on a formalized theoretical representation of degrees of freedom in the form of a parabolic curve with an optimum and deviations from it. This notion of economic freedom echoes the vision of socially useful ‘private vices’ described in Bernard Mandeville’s “The Fable of the Bees”. The evaluation tool is a theoretical-analytical economic-mathematical model of economic reproduction, reflecting the dynamic process of production and distribution of a public product. Imitation of the development of the socio-economic system with different degrees of economic freedom and in conditions of institutional transformations leading to a change in the degree of freedom confirmed the expediency of striving for the optimum of freedom. At the same time, contradictions were revealed that arise in the simulated system due to the ambiguity of the interests of economic agents involved in the reproduction process. It also shows the contradictory nature of the institutional reforms themselves, which have far different consequences for different social strata with overall positive changes in the economy.