Oh I Hate The Game, If The Game is Public Choice

There is a piece at Free Exchange entitled ‘Don’t Hate the Player, Hate The Game’ that talks about the contributions of James Buchanan, who died recently. Now, Buchanan was a very influential person to a couple of people who I myself find influential, namely Jack Wiseman and Karen Vaughn. From what I read, Wiseman was a close friend and colleague of Buchanan who often cited Buchanan and Vaughn cites Buchanan often, especially when talking about subjectivist economics. Nevertheless, I do not share the same appreciation as they do. I think Public Choice is one of the worst things Austrians could endorse, and this is certainly the case in the GMU program. For a critique that I find valid of Public Choice from an Austrian perspective go here .

The main core of the argument is stated here:

Implicit in the assertion that “politics without romance is impossible” is the assumption of public ignorance. The public does not understand the niceties of politics. This is all the more amazing upon observing how emotionally involved people become in something (presidential elections) while remaining so woefully ignorant of it — and even ignorant of their own ignorance! Voters actually think that they are making the right choice; in most cases they are convinced of it. But the truth is that voters typically do not know what is going on. (They know the color of Mrs. Obama’s dress, but are ignorant of the minute details of Mr. Obama’s policy proposals.) And it is funny to hear commenators on the news repeatedly lament that other commentators are not sticking to the issues, issues that people want to hear! I would be willing to bet that if popular news outlets began discussing the “issues” in great detail, the people’s interest in politics, and their participation in it, would quickly end.
But what makes Austrians think that this ignorance stops with voters? This ignorance cuts both ways. Politicians cannot know the effects of any political exchange (vote trading). Public Choice Theory relies on the principle of omniscience for its validity… Austrians are doing great injustice to Hayek and Mises in believing that politicians can accomplish whatever they want by acting in their own self-interest. The effects of any action in politics are terribly complicated, and its unintended consequences too numerous to assess and evaluate intelligently.

Damn, maybe it is true that libertarians are just lazy Marxists. It is a shame to see that Austrians are so quick to accept arguments about those damn bureaucrats in government ruining the lives of many because they only look after their own self interests. This gives the Austrian school the incentive of arguing that a market process is purely a ‘private’ activity with the interventions of government ruining the end result of these private actions, or that capitalism without the help of the state is somehow consistent, and is something that the public can benefit from. Underlining all this is the belief that neoclassical economics is essentially right but all it needs is a bit of Austrian tweaking, a view that Karen Vaughn tried to get us to stop using in exchange for a more Lachmannian view of trying to make Austrian economics a true school of the heterodoxy.( And Austrians wonder why others call them neoclassicals).

I used to believe in these type of arguments, but now I laugh at myself for ever thinking such a thing. Don’t get me wrong, there may be reasons for a smaller government than what others envision (and this can be something worth defending with the opposition happy to debate), but this is certainly not the way to justify so called free market economics

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8 responses to “Oh I Hate The Game, If The Game is Public Choice

  1. I remember reading a journal article on this topic. New Political Economy, Scientism and Knowledge: A Critique from a Hayekian Perspective, and a Proposal for an Extension of the Research Agenda by Jan Schnellenbach. I couldn’t find a free link but if you want to read it I will upload it to the website that you get when you click my name.(download is the small downwards arrow to the right of the screen clicking the name of the file is just to view)

    If she is right public choice may be salvaged. After all the invisible hand metaphor even in Smith was not just for good outcomes. Ignorant political actors may after all be led as if by an invisible hand to act as if they were following their own self interests.

    • The problem still remains the same about Public Choice. Plus, a further problem being of that (neoclassical) interpretation of the invisible hand. I do not believe there is this this tendency in the market, so I do not see reason to believe this tendency exists in the political world.

  2. The issue of the Invisible Hand in Adam Smith’s writing is something that Gavin Kennedy has dealt with extensively, so I’ll leave it at that.

    As for the issue of the Public Choice School…Dr. Michael Emmett Brady has criticised the late James Buchanan’s Democracy in Deficit: The Political Legacy of Lord Keynes before over Amazon.com. Please see the following links.

    http://www.amazon.com/review/RF8TA4EVAPYAQ/

    http://www.amazon.com/review/R163XIB3OP7PS3/

    http://www.amazon.com/review/R3HQR9YIFJDTDP

    As for the website with the Austrian critique that you linked to…

    That website was run by a James F. Mueller, A.K.A. “Lachmanniac”. This Lachmanniac character was apparently interested in Economics before he decided to move on into the field of Law. However, he and Dr. Michael Emmett Brady did engage in correspondence over Amazon.com before Lachmanniac decided to move on in his interests. You might find a few of the following links interesting, Isaac.

    http://www.amazon.com/review/R2NFJ3ZX01DQ0M

    http://www.amazon.com/review/R1S4VWTIJF8J6O

  3. You’d find the work of Jeffrey Friedman really interesting. Given that I know “Austrian Omnibus” has cited the journal Critical Review, I think he gets his views from J. Friedman.

    • Overall I do like Friedman and his journal, some very interesting debates there (my favorite debate being between Horwitz and Hill), nevertheless, I do agree with the critics that say that speculation was a big problem. The purpose of loaning credit via banking institutions and the stock market (at least here in the US) was to encourage productive business activity. The origins of these institutions in the US come from the economic influence of Alexander Hamilton and Isaac Roosevelt. The fact that regulators do not understand this point is partly what makes these regulators and policy makers ignorant. The other part is on the issue that the mainstream all use Bayesian foundations which are flawed foundations in analyzing the real world (something that radical subjectivist Jack Wiseman used to emphasize).

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