The continuing financial collapse of 2008, which caused trillions of dollars of damages to most everyone but the Wall Street elites, will perhaps lead to some hesitation in the reflex to evoke the Wall Street model—if not to some more fundamental rethinking of the issues. Perhaps the Occupy Wall Street movements around the world are the beginning of such a rethinking. In any case, our purpose here is such a rethinking by going back to some of the basic principles that are supposed to be exemplified in a market economy.
Archives for Political economy
Free Cities: What could be wrong with that?
This post is an update of a previous post on The Charter Cities Debate and Democratic Theory. A new twist on Paul Romer’s idea of charter cities has come to my attention. It is promoted under the name of “free cities.” The home base seems to be the Free Cities Institute headquartered at the Francisco [...]
Fukuyama and Dahrendorf on Hayek
Frank Fukuyama’s recent review of Hayek’s Constitution of Liberty in the NYTimes has raised a ruckus in Hayekian circles. I review an older critique of Hayek by Ralf Dahrendorf and then lament the absence of the Hayekians in the great debate of the 1990s about socially engineering the transition from socialism to capitalism. Apparently the Hayekian strictures against utopian social engineering only applied to the transition in the opposite direction.
Inalienable Rights: Part III A Litmus Test for Liberalism
Surely it is not too much to ask a modern liberal theory of justice that it provide a coherent account of why some contracts, e.g., self-sale contract, should be deemed invalid and why the rights such contracts would legally alienate are inalienable. In that sense, the theory of inalienable rights provides a historical litmus test for liberalism.
Why was Slavery Wrong? Involuntariness or Treating Persons as Things?
“Involuntariness” is the usual answer. Indeed, classical liberalism takes the most basic framing of a social question as: “consent or coercion?” In this view, democracy is characterized as government “with the consent of the governed” so slavery and non-democratic government were both condemned for the lack of consent. This common condemnation of slavery on the [...]
The fatal flaw in finance theory: Capitalizing “goodwill”
The fatal flaw at the root of today’s post is really what might be called “the fundamental myth” about the current property system, namely that the market-contractual role of being the residual claimant in a productive opportunity is treated as a “property right” that is currently owned by some legal party (e.g., the corporation having the contractual role) and that may be bought and sold as well as capitalized into the party’s current valuation.
Development or just poverty reduction?
Many of the debates about foreign aid and development assistance seem to pivot on different visions of the goal: development or just poverty reduction.
Social Engineering vs. Pragmatism: Part I of Commentary on the Sarkozy-Stiglitz Commission
The point of this Part I commentary on the Sarkozy-Stiglitz Commission is to juxtapose the social engineering perspective implied in the whole exercise of trying to find a better index of “economic performance and social progress” to a more pragmatic perspective.