Skip to main content Accessibility help
×
Home
Hostname: page-component-544b6db54f-kbvt8 Total loading time: 0.183 Render date: 2021-10-19T13:30:32.101Z Has data issue: true Feature Flags: { "shouldUseShareProductTool": true, "shouldUseHypothesis": true, "isUnsiloEnabled": true, "metricsAbstractViews": false, "figures": true, "newCiteModal": false, "newCitedByModal": true, "newEcommerce": true, "newUsageEvents": true }

Logic is a harsh mistress: welfare economics for economists

Published online by Cambridge University Press:  15 April 2019

Peter T. Leeson*
Affiliation:
George Mason University, Fairfax, VA, USA
*
*Corresponding author. Email: pleeson@gmu.edu

Abstract

Every economic explanation assumes maximization. How strange, then, that few economists accept one of maximization's most straightforward implications: every observed institution is efficient. My aim is to persuade economists of this fact and thus to dissuade them from making illogical claims about social welfare. To frame my argument, I consider the “property rights approach” to institutions developed by Yoram Barzel. I speculate that economists resist what maximization implies about institutional efficiency because they think that efficiency-always precludes them from improving the world, and hope of improving the world is what attracted them to economics in the first place. But, besides being inconsistent, resistance is unnecessary: efficiency-always does not preclude economists, or anyone else, from improving the world.

Type
Research Article
Copyright
Copyright © Millennium Economics Ltd 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alchian, A., Buchanan, J. M., Demsetz, H., Leijonhufvud, A., Lott, J. R., Sharpe, W. F. Jr. and Topel, R. H. (1996), ‘In Celebration of Armen Alchian's 80th Birthday: Living and Breathing Economics’, Economic Inquiry, 34: 412436.CrossRefGoogle Scholar
Allen, D. W. (1991), ‘What are Transaction Costs?Research in Law and Economics, 14: 118.CrossRefGoogle Scholar
Allen, D. W. (2015), ‘On Hodgson on Property Rights’, Journal of Institutional Economics, 11(4): 711717.CrossRefGoogle Scholar
Barzel, Y. (1997), Economic Analysis of Property Rights, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Barzel, Y. (2002), A Theory of the State: Economic Rights, Legal Rights, and the Scope of the State, Cambridge: Cambridge University Press.Google Scholar
Barzel, Y. (2015), ‘What are ‘Property Rights’, and Why Do They Matter? A Comment on Hodgson's Article’, Journal of Institutional Economics, 11(4): 719723.CrossRefGoogle Scholar
Becker, G. S. and Posner, R. A. (2004), ‘Suicide: An Economic Approach’, mimeo.Google Scholar
Cheung, S. N. S. (1969), The Theory of Share Tenancy, with Special Application to Asian Agriculture and the First Phase of Taiwan Land Reform, Chicago: University of Chicago Press.Google Scholar
Cheung, S. N. S. (1998), ‘The Transaction Costs Paradigm’, Economic Inquiry, 36(4): 514521.CrossRefGoogle Scholar
Cheung, S. N. S. (2005), Economic Explanation: Selected Essays of Steven N.S. Cheung, Hong Kong: Arcadian Press.Google Scholar
Demsetz, H. (1969), ‘Information and Efficiency: Another Viewpoint’, Journal of Law and Economics, 12(1): 122.CrossRefGoogle Scholar
Hodgson, G. M. (2015), ‘Much of the ‘Economics of Property Rights’ Devalues Property Rights and Legal Rights’, Journal of Institutional Economics, 11(4): 683709.CrossRefGoogle Scholar
Leeson, P. T. (2013), ‘Vermin Trials’, Journal of Law and Economics, 56(3): 811836.CrossRefGoogle Scholar
Leeson, P. T. (2014a), Anarchy Unbound: Why Self-Governance Works Better than You Think, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Leeson, P. T. (2014b), ‘Human Sacrifice’, Review of Behavioral Economics, 1: 137165.Google Scholar
Leeson, P. T. (2017), WTF?! An Economic Tour of the Weird, Stanford: Stanford University Press.Google Scholar
Leeson, P. T., Boettke, P. J. and Lemke, J. S. (2014), ‘Wife Sales’, Review of Behavioral Economics, 1(4): 349379.CrossRefGoogle Scholar
Piano, E. E. and Rouanet, L. (2018), ‘Economic Calculation and the Organization of Markets’, Review of Austrian Economics, available at https://doi.org/10.1007/s11138-018-0425-4 (accessed 5 March 2019).CrossRefGoogle Scholar
Staten, M. and Umbeck, J. (1989), ‘Economic Inefficiency: A Failure of Economists’, Journal of Economic Education, 16: 5772.CrossRefGoogle Scholar
Stigler, G. J. (1982), The Economist as Preacher, and Other Essays, Chicago: University of Chicago Press.Google Scholar
Stigler, G. J. (1992), ‘Law or Economics?Journal of Law and Economics, 35: 455468.CrossRefGoogle Scholar
Thaler, R. H. (1980), ‘Toward a Positive Theory of Consumer Choice’, Journal of Economic Behavior and Organization, 1: 3960.CrossRefGoogle Scholar
Weaver, R. M. (1948), Ideas Have Consequences, Chicago: University of Chicago Press.Google Scholar
12
Cited by

Send article to Kindle

To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Logic is a harsh mistress: welfare economics for economists
Available formats
×

Send article to Dropbox

To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

Logic is a harsh mistress: welfare economics for economists
Available formats
×

Send article to Google Drive

To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

Logic is a harsh mistress: welfare economics for economists
Available formats
×
×

Reply to: Submit a response

Please enter your response.

Your details

Please enter a valid email address.

Conflicting interests

Do you have any conflicting interests? *