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Bloomington scholars are critical of the rather wide-spread “Model Platonism” of both Austrian and Chicago economists. Their empirical, B, perspective avoids the more extreme views of both Austrian “mindful economics,” A, and Chicago “mindless economics,” C. Yet the B is not a mere convex combination of A and C. It is rather a psychologically grounded empirical evidence-oriented approach that keeps clear of the non-empirical spirit of von Mises’ and Selten’s methodological dualism on one hand and the instrumentalist and behaviorist spirit of much of neo-classical economics on the other hand.

Prior to the first session I was asked about my view of rent seeking, mentioned in passing in the document of mine distributed earlier. I replied that my view had three parts. First, I agreed that rent seeking, however defined, was ubiquitous. Second, I argued that rent seeking is not bad per se. Third, I argued that I found particularly disgraceful treatments of the allocation of resources to efforts to change the law as bad rent seeking. Both this person and Jim Buchanan (later in the conference) insisted that rent seeking was objectionable when it involved a transfer without a gain in efficiency, i.e. the creation of something productive. I responded that this view substituted the analyst’s definition of productive for that of the economic agent – who obviously believed that hiring a lawyer, etc. to help bring about a potential change in the law was a desirable, hence productive, use of his or her resources. I further insisted that this definition, especially when it was used in a blanket, indiscriminate way, functioned to privilege existing law and those benefiting from existing law and to deny people access to their government, and that it did so by manipulating the definition of rent seeking to give effect to selective antecedent normative premises hidden within the use of the term “productive” (in at least one discussion the term “artificial” was used). I pointed to this as a problem in the use of language. Further aspects of the terminology of rent seeking will be dealt with below.

One important discussion comes under Knight’s heading of “Social Control.” To appreciate his argument, one has to understand that Knight’s social theory is developed within a tension between: (1) his knowledge that social control is both inevitable and necessary; and (2) his correlative desire for individual autonomy. One could add to that a hatred of social control, some of which is relevant. But what Knight dislikes is, first, selective elements of existing social control and, second, change of social control, e.g. change of the law by law, except for those changes of the law that remove the selective elements he dislikes; Knight is not opposed to all change of social control. In any event, the problem of social control is also for Knight (as it was for Vilfredo Pareto) the problems of social change and of the status of the status quo as well as of hierarchy.

This chapter uses the theory of complex systems as a conceptual lens through which to compare the work of Friedrich Hayek with that of Vincent and Elinor Ostrom. It is well known that, from the 1950s onwards, Hayek conceptualised the market as a complex adaptive system. It is argued in this chapter that, while the Ostroms began explicitly to describe polycentric systems as a class of complex adaptive system from the mid-to-late 1990s onwards, they had in fact developed an account of polycentricity as displaying most if not all of the hallmarks of organised complexity long before that time. The Ostromian and Hayekian approaches can thus be seen to share a good deal in common, with both portraying important aspects of society – the market economy in the case of Hayek, and public economies, legal and political systems, and environment resources in the case of the Ostroms – as complex rather than simple systems. Aside from helping to bring out this aspect of the Ostroms’ work, using the theory of complex systems as a framework for comparing the Hayekian and Ostromian approaches serves two other purposes. First, it can be used to show how one widely criticised aspect of Hayek’s theory of society as a complex system, namely his account of cultural evolution via group selection, can be strengthened by an appeal to the work of Elinor Ostrom. Second, it also helps to resolve a tension – ultimately acknowledged by the Ostroms themselves – between some of their explicit methodological pronouncements and the actual, substantive approach they adopted in their analysis of polycentric systems.

In almost all aspects of social life government intervention seems much more pervasive and intrusive today than ever before – at least in many of the Western countries. Governments seem year by year to consume still more resources and to regulate the details of the actions and interactions of their citizens still further.