Comments (10)

• Niccolò

  I'm surprised no one has commented this article, it's really very good and useful when combating Chicago-Keynesians (also know as Monetarists or Friedmanites) who refer to things like education and health care as positive externalities.

  Published: June 23, 2007 7:52 PM

• TGGP

  This article seems to be saying "The New (Public Choice) Institutionalism of Buchanan and Tullock is wrong, the Old (False Consciousness) Institutionalism is right!" and condemning Public Choice (possibly the most inherently libertarian variety of economics) theorists for not being stridently libertarian enough. I think Bryan Caplan's theories of "rational irrationality" are far more credible.

  Near the end of this piece Dilorenzo calls a coming-together of Austrian and Public Choice theory. Some GMU-Austrians have done likewise here.

  Did Milton Friedman actually say education was a public good or had positive externalities (I believe Caplan has said education correlates with libertarian views and therefore is a public good)? I recall him saying he wanted to abolish public education, but thought vouchers were the most achievable option at this point.

  Published: June 23, 2007 8:29 PM

• Anthony

  "(I believe Caplan has said education correlates with libertarian views and therefore is a public good)"

  Could you elaborate on this? Caplan is an anarcho-capitalist, so I doubt he is too friendly to public goods theory.

  Published: June 23, 2007 10:47 PM

• Anthony

  "(I believe Caplan has said education correlates with libertarian views and therefore is a public good)"

  Could you elaborate on this? Caplan is an anarcho-capitalist, so I doubt he is too friendly to public goods theory.

  Published: June 23, 2007 10:47 PM

• Anthony

  "(I believe Caplan has said education correlates with libertarian views and therefore is a public good)"

  Could you elaborate on this? Caplan is an anarcho-capitalist, so I doubt he is too friendly to public goods theory.

  Published: June 23, 2007 10:47 PM

• Richard Garner

  "Public Good's theory" is not something that anarcho-capitalists need to be hostile to. The "private action will undersupply public goods compared to government action theory" is. There is good theoretical and empirical evidence that private action is not impeded by public good problems. At the same time, good government is a public good, so the statist argument necessarily implies that good government will be undersupplied, and bad government, which is more of a private good, will be oversupplied.

  Published: June 24, 2007 6:19 AM

• Paul Marks

  As the author of the article would agree, one of the basic principles of "public choice" is mistaken.

  This is the matter of treating a poltician trying to maximize votes (and campaign conributions to get votes, and of course as direct income via having family members working on his or her staff) as a simliar thing to a businessman trying maximize profits.

  The businessman is selling goods and services, the politician is selling regulations and spending programs. The one is engaged in voluntary trade, the other in ordering people about by the threat of violence (the regulations) and stealing money (the taxes that pay for the spending programs).

  The two types of conduct are not the same, they are not even the same sort of thing.

  As a matter of fact one can even make a pro politiican point against Public Choice, this is that not all politicians are just interested in getting votes and campaign contributions.

  As foolishly innocent as it may sound, many politicians (however mistaken they may be) actually argue, some of the time, for certain policies because they believe them to right - not because they believe they will attract votes or campaign contributions.

  
  

  Published: June 24, 2007 3:01 PM

• Brent

  I agree with you, Paul.

  The problem I have with public choice is that it treats all politicians the same and, in the spirit of the neoclassical fallacy, attempts to model behavior on objective criterion.

  Politicians do things because they want to do things and it is a mistake to believe you can objectively measure the benefits politicians derive from achieving their goals. For instance, sometimes politicians do things to look good and get votes and praise in the media, sometimes politicians do things to get interest group funding for their campaigns, sometimes politicians do things to gain personal wealth or wealth for friends and relatives, and other times politicians do things because of their ideological beliefs.

  I agree with DiLorenzo that political entrepreneurship is the key thing to look at, but politicians sometimes decide to use up their profits/political capital for consumptive purposives, so to speak, by engaging in behavior that is not looked favorably upon by their constitutents.
  

  Published: June 24, 2007 4:38 PM

• TGGP

  Imagine there are two competing businessmen. One acts to maximize profits. The other does not. Normal economic theory says that the former will tend to outcompete and crowd out the latter. Imagine there are two competing politicians. One acts to maximize his probability of winning the election. The other does not. Who is more likely to win? This does not mean that the politician is a cynic who doesn't actually believe his policies help, because true believers actually have an advantage in being convincing to the public. Try to think like an evolutionary biologist. They also study willfully acting things, but the don't get as distracted as many austro-libertarians do.

  Richard Garner comes pretty close to making the same point as Caplan. The government has grabbed education for itself, made economic literacy a public good because of voting, and undersupplies that literacy while oversupplying indoctrination.

  Published: June 25, 2007 12:28 AM

• N. Joseph Potts

  The applicability of the "bureaucracy as lobby" reasoning in this post to the global-warming initiative is rather stark.

  Of course, its applicability to the founding purposes and activities of the FDA is equally stark.

  Published: June 29, 2007 9:07 PM