Wednesday, August 8, 2012

Rephrasing the point

Commenter liberty makes a counter-argument with important points that I agree completely with about the difference between planning rules of the game and planning decisions on a day-to-day basis (the constitutional phase vs. the policy phase).

I am concerned that she put this as a counter-argument, because this was actually the distinction I was trying to get across in my update. This is James Buchanan's crucial point and this is exactly my point. It's plauisble to change the rules of the game, but that is largely not what is being proposed (if it were I wouldn't have nearly as much issue with it).

So I posed it this way to liberty, and I thought I'd share it as its own post:

"Can you name me an economics department in this country whose "thinkers in studies" (on the basis of an academic literature) advocate a more radical break - not just with the existing rules of the game (that would be plausible) - but with actual existing policy decisions - than George Mason University's economics department?

I can think of perhaps one, and it's located a ways south of GMU

Most other departments have economists who see the value in a constitutional order that presumes liberty, decentralizes power, separate powers, limits powers, and enshrines democracy and the rule of law. These other departments don't always like policy that is made but they see the body of policy that is produced by this good set of constitutional rules as being generally good (because we have good rules). To the extent that they critique policy, it's usually in the form of pointing out flaws and tweaking. You rarely see economics departments with big plans to change the order that has evolved under the constituional constraints we have in place according to a different blueprint that they dreamed up in their studies.

George Mason University and Auburn University are more unique on this point. They are very different. You have a lot of professors in these departments that have a lot of really big ideas not just about changing the constitutional rules of the game, but about how they could come up with better policy decisions based on certain common libertarian formulas.

This is why I spend so much time on the ides of people in these departments, because I am of the opinion that the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. Despite protests to the contrary, there are an awful lot of designs coming out of GMU and Auburn.

If it were all constitutional assertions or all tweaks of an evolved order, I might feel differently (and yes, the cut-off on the latter is a little subjective I know - but isn't everything in economics?). But that's generally not what you get.


  1. Some thoughts. Not sure whether I believe it, but here I go. Meta-games are generally not considered that important in and of themselves. The Constitution isn't important because of what it says, but rather because of the sets of policies and governmental actions that result from the institutions setup by the Constitution. So how can you pick rules of the game? You have to start with the outcome you're looking for and work backwards to the rules of the game that produce the outcome you're looking for. So in that sense, what the people at GMU do is an essential part of the meta-game. They need to figure out what radical policy changes they want to see so that they can then back-track and figure out the rules of the game that will bring about these outcomes. I'm not sure that's distinguishable from just wanting to change the policy without changing the rules of the game. (generally a pipe dream)

  2. The problem with Hayeks appeals to spontaneous/emergent order is that they are too vague. At some level anything can be justified by calling it a spontaneous order. Buchanan calls Hayek "too mystical" about it, I agree.

    More detailed ideas an better classification is needed. There is some literature that attempts this, with varying degrees of success.


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