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I have been asked to explore how James Buchanan’s work on public finance and constitutional political economy might have emerged out of themes present in Frank Knight’s oeuvre…
Abstract
I have been asked to explore how James Buchanan’s work on public finance and constitutional political economy might have emerged out of themes present in Frank Knight’s oeuvre, especially his Risk Uncertainty, and Profit. Buchanan’s body of work has inspired the development of a style of political economy sometimes described as Virginia or Constitutional Political Economy to distinguish it from the Chicago Political Economy with which George Stigler is associated, and with Stigler and Buchanan both being students of Knight. While Buchanan, unlike Stigler, did not write his dissertation under Knight’s supervision, this is a minor distinction because Buchanan regarded Knight as his de facto supervisor even though Roy Blough was his de jure supervisor. The author explains how Knight’s scholarly oeuvre can in large measure be detected in Buchanan’s effort to fashion an alternative approach to public finance and to articulate the field of study now called constitutional political economy.
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In Democracy in Chains, Nancy MacLean draws attention to the influence that James M. Buchanan’s work has had on the political economic discourse of the past half century. Buchanan…
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In Democracy in Chains, Nancy MacLean draws attention to the influence that James M. Buchanan’s work has had on the political economic discourse of the past half century. Buchanan and his collaborators in the Virginia Political Economy tradition have provided intellectual firepower for efforts to delegitimize democratically sanctioned policies aimed at alleviating the dysfunctional consequences of market activity. While MacLean’s account contains some well-documented inaccuracies, her characterization of Buchanan’s agenda is broadly accurate. This chapter assesses Buchanan’s economics in light of the themes raised by MacLean. His work, we shall argue, is a modern manifestation of what Marx termed “vulgar economy,” that is, ruling-class ideology posing as science.
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Alexander Salter and Glenn Furton
The purpose of this paper is to integrate classical elite theory into theories of constitutional bargains.
Abstract
Purpose
The purpose of this paper is to integrate classical elite theory into theories of constitutional bargains.
Design/methodology/approach
Qualitative methods/surveys/case studies.
Findings
Open-ended constitutional entrepreneurship cannot be forestalled. Constitutional entrepreneurs will almost always be social elites.
Research limitations/implications
The research yields a toolkit for analysing constitutional bargains. It needs to be used in historical settings to acquire greater empirical content. Need to be applied to concrete historical cases to do economic history. Right now it is still only institutionally contingent theory.
Practical implications
Formal constitutions do not, and cannot, bind. Informal constitutions can, but they are continually evolving due to elite pressure group behaviors.
Social implications
Liberalism needs another method to institutionalize itself!
Originality/value
Open-ended nature of constitutional bargaining overlooked in orthodox institutional entrepreneurship/constitutional economics literature.
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Alexander W. Salter and Abigail R. Hall
This paper applies the logic of economic calculation to the actions of autocrats. We model autocrats as stationary bandits who use profit-and-loss calculations to select…
Abstract
This paper applies the logic of economic calculation to the actions of autocrats. We model autocrats as stationary bandits who use profit-and-loss calculations to select institutions that maximize their extraction rents. We find in many cases autocrats achieve rent maximization through creating and protecting private property rights. This in turn yields high levels of production, with expropriation kept low enough to incentivize continued high production. Importantly, while this leads to increasing quantities of available goods and services over time, it does not lead to true development; that is, the coordination of consumer demand with producer supply through directing resources to their highest-valued uses. We apply our model to the authoritarian governments of Singapore and the United Arab Emirates, showing how they function as quasi-corporate governance organizations in the business of maximizing appropriable rents.
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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…
Abstract
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.
This is a, somewhat indirect, rejoinder to Boettke (2019, this volume, Chapter 1). Doing Austrian economics is low prestige: Austrian economics does not get published in…
Abstract
This is a, somewhat indirect, rejoinder to Boettke (2019, this volume, Chapter 1). Doing Austrian economics is low prestige: Austrian economics does not get published in high-prestige journals and Austrian economists are not employed by top universities. And yet, up until World War II Austrian economics was an important part of the international economics community. The author argues that Austrian economists made several theoretical innovations that could have placed them at the frontier of research in economics, and present a brief counterfactual history of a thriving Austrian economics based on those innovations. However, the actual history of the Austrian School is quite different. A particularly decisive factor that has made Austrian economics a fringe movement was the rejection of formal methods in theory and empirics. The author argues that Austrian economics is basically dying out as a voice in the conversation of modern economists.
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What is behavioral economics? This chapter explores a mismatch between what is included in the field of behavioral economics and some of the most visible Austrian critiques of…
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What is behavioral economics? This chapter explores a mismatch between what is included in the field of behavioral economics and some of the most visible Austrian critiques of behavioral economics. While paternalism, nudging, and a focus on irrationalities and biases are a big part of modern behavioral economics, the portrayal of the field of behavioral economics as being focused predominately upon those areas leaves a swath of low-hanging fruit that would be beneficial for Austrian scholars to consume and use in their own work.
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In his incisive analysis of academic tribalism, Stephen Balch (2004) argues that schools of thought can be catalysts or barriers to disciplinary inquiry, depending on the…
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In his incisive analysis of academic tribalism, Stephen Balch (2004) argues that schools of thought can be catalysts or barriers to disciplinary inquiry, depending on the institutional setting. He cites physics, chemistry, and mathematics as fields in which competing schools of thought generally enhance the marketplace of ideas by increasing the scope and value of intellectual exchange (ibid., p. 2). Balch deems these disciplines “collegial” because, though “rivalries exist among hypotheses and investigators, there is general agreement on the means of resolving them and a strong sense of shared intellectual mission” which enable “internalized checks” to “keep things on the straight and narrow” (ibid., p. 4). By contrast, Balch describes the social sciences and humanities as “adversarial disciplines” in which paradigmatic rivalries “shade into enmities, bear heavily on methods of verification as well as the substance of disputes, involve judgments of value as well as of fact, often reveal an absence of shared mission, and produce results whose employment outside academe is very frequently polemical” (ibid., p. 4). In these contexts, schools become impediments to “serious academic discourse about the human condition” (ibid., p. 2) as the collegial ideal of a “free and open marketplace of ideas” (ibid., p. 1) gives way to balkanized disciplines “divided into enduring factions whose partisans frequently treat their opponents more as foes than colleagues” (ibid., p. 4).