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2018 | OriginalPaper | Buchkapitel

2. What Should Economists Do Now?

verfasst von : Robert Sugden

Erschienen in: James M. Buchanan

Verlag: Springer International Publishing

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Abstract

This essay discusses the arguments in Buchanan’s 1964 paper, ‘What should economists do?’, in the light of recent developments in behavioural economics. Criticizing the preference-satisfaction criterion of neoclassical economics, Buchanan argues that the central concern of economics should be to design and maintain institutions that allow individuals as much opportunity as possible to make their own choices and to engage in voluntary cooperation. He worries that using preference rather than choice as the fundamental normative concept might license social planners (and economists who see themselves as their advisers) to set themselves up as the judges of what individuals ‘truly’ prefer. This is exactly what behavioural welfare economics is now doing by using the satisfaction of (supposed) latent preferences as its criterion. Following Buchanan, I propose an opportunity-based criterion and argue that the contractarian justification for this criterion is unaffected by behavioural findings.

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Vorheriges Kapitel Who Was James M. Buchanan and Why Is He Significant?

Nächstes Kapitel Starting from Where We Are: The Importance of the Status Quo in James Buchanan

The ideas in that paper appear in a more fully worked-out form in Sugden (1985).

I defend this view of Hume’s Treatise in Sugden (2006).

This work is brought together in Sugden (2018).

A similar thought is implicit in David Gauthier’s (1986, pp. 83–112) account of the market as a ‘morally free zone’. Gauthier’s contractarian theory treats a competitive market as morally equivalent to an archipelago of mutually isolated one-person island economies: ‘Each person is thus a Robinson Crusoe, even in the market’ (p. 91).

This is a conception of individual agency as a continuing locus of responsibility. I say more about this in Sugden (2004).

Approval of unilaterally self-imposed constraints is a recurring theme in Buchanan’s work, aligned with his advocacy of constitutional rules to restrict day-to-day political decision-making. His analysis of the ‘Samaritan’s dilemma’, for which the solution is a self-imposed rule against generosity to would-be ‘parasites’, is an example (Buchanan 1975a).

In fairness to Buchanan’s adversary, I should add that I was fortunate in being able to go one of the ‘new universities’ established in Britain in the 1960s on the recommendation of a committee chaired by the then Lord Robbins. My education there had all the properties that tend to foster self-creation.

Many of these effects were known, to psychologists and to some economists, long before the explosion of interest in behavioural economics. (For example, Wicksteed’s [1910] exposition of neoclassical economics includes psychologically acute discussions of many now-familiar ‘anomalies’.) What is new is the widespread recognition of the economic significance of these effects.

There is far too much evidence about these and other ‘anomalies’ for specific citations to be useful. A representative sample of this evidence is collected in Kahneman and Tversky (2000).

As far as I can recall, issues arising from behavioural economics did not feature in any of the many conferences at which Buchanan and I were co-participants. In his later years, I would have been reluctant to initiate discussion of topics on which I expected the two of us to have fundamental disagreements.

This paragraph contains sweeping claims that some behavioural economists might dispute. The evidence on which they are based is presented in Infante et al. (2016) and Sugden (2018).

Buchanan, J. (1954). Social Choice, Democracy, and Free Markets. Journal of Political Economy, 62, 114–123. Reprinted in Buchanan (1999).

Buchanan, J. (1964). What Should Economists Do? Southern Economic Journal, 30, 213–222. Page References to Reprint in Buchanan (1999).

Buchanan, J. (1975a). The Samaritan’s Dilemma. In E. Phelps (Ed.), Altruism, Morality and Economic Theory (pp. 71–85). New York: Russell Sage. Reprinted in Buchanan (1999).

Buchanan, J. (1975b). The Limits of Liberty: Between Anarchy and Leviathan. Chicago: University of Chicago Press.

Buchanan, J. (1979). Natural and Artifactual Man. In J. Buchanan (Ed.), What Should Economists Do? (pp. 93–112). Indianapolis, IN: Liberty Fund. Page References to Reprint in Buchanan (1999).

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Buchanan, J. (1986b). Better Than Plowing. Banco Nazionale del Lavoro Quarterly Review, 159, 359–375. Page References to Reprint in Buchanan (1999).

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Buchanan, J. (1999). The Collected Works of James M. Buchanan (Vol. 1). Indianapolis, IN: Liberty Fund.

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Hargreaves Heap, S. (2017). Behavioural Public Policy: The Constitutional Approach. Behavioural Public Policy, 1(2), 252–265. https://doi.org/10.1017/bpp.2016.8.CrossRef

Hume, D. (1739–1740/1978). A Treatise of Human Nature. Oxford: Oxford University Press.

Infante, G., Lecouteux, G., & Sugden, R. (2016). Preference Purification and the Inner Rational Agent: A Critique of the Conventional Wisdom of Behavioural Welfare Economics. Journal of Economic Methodology, 23, 1–25.CrossRef

Kahneman, D., & Tversky, A. (Eds.). (2000). Choices, Values, and Frames. Cambridge: Cambridge University Press and Russell Sage.

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Sugden, R. (2004). The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences. American Economic Review, 94, 1014–1033.CrossRef

Sugden, R. (2006). Hume’s Non-instrumental and Non-propositional Decision Theory. Economics and Philosophy, 22, 365–391.CrossRef

Sugden, R. (2018). The Community of Advantage: A Behavioural Economist’s Defence of the Market. Oxford: Oxford University Press.CrossRef

Sunstein, C., & Thaler, R. (2003). Libertarian Paternalism Is Not an Oxymoron. University of Chicago Law Review, 70, 1159–1202.CrossRef

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Wicksteed, P. (1910). The Common Sense of Political Economy. London: Macmillan.

Titel: What Should Economists Do Now?
verfasst von: Robert Sugden
Verlag: Springer International Publishing
Buch: James M. Buchanan
Print ISBN: 978-3-030-03079-7

Electronic ISBN: 978-3-030-03080-3

Copyright-Jahr: 2018
DOI: https://doi.org/10.1007/978-3-030-03080-3_2