The 'New Class': Analysis of the Concept, the Hypothesis and the Idea as a Research Tool

A bstract . The concept of the 'New Class' often is invoked to explain not only why the capitalist countries of the West are drifting leftwards into socialism but also why socialist nations of East Europe have totalitarian governments, tolerate gross economic inefficiencies, and exploit their workers. Certain critical issues underlying such an approach that are relevant to political economists , especially those interested in the changing boundary between the public and private sectors of the economy , are examined. The concept is found to rely on hypotheses which are not (easily) testable and the argument for its existence to be based on premises that are dubious. Special attention is given to hypotheses in public finance employing the concept in an attempt to explain increasing public expenditures ; these are found wanting.