Bonus Quotation of the Day…

by Don Boudreaux on July 10, 2017

in Economics, Reality Is Not Optional

… is from pages xi – xii of Geoffrey Brennan’s “Foreword” to volume 15 of my late colleague Jim Buchanan‘s Collected Works (Externalities and Public Expenditure Theory [2001]) (original emphases):

What should governments do?  And the answer to that question revolves around what is necessary for government action – namely, some element of market failure.  As Buchanan himself and a subsequent generation of public choice scholars have been at pains to emphasize, a necessary condition is not a sufficient condition.  Indeed, the corresponding analysis of political failure has been one of the important motivating elements in public choice scholarship.

DBx: To be clear, the motive of public-choice scholars is not to find political failure; rather, it is to correct the still-prevalent tendency of people – including most economists and other social scientists – to compare actual market outcomes with idealized government outcomes.  Such a comparison, of course, in addition to being unscientific, is wholly useless as a guide for policy.  Imagined ideals always outperform actual realities.

The strange fact is that if an economist (or anyone else) ever insisted that the imperfect realities of actual government operations be compared only with imagined ideal markets – and then policy decisions be made on the basis of the outcomes of these comparisons – that person would correctly be ridiculed as an unscientific ideologue.  And yet when the comparisons are reversed – when the imperfect realities of actual markets are compared to imagined ideal government operations – few people outside of the public-choice school blink an eye.  And then when public-choice scholars blink their eyes at such misleading comparisons, they are accused of being ideological hacks!  Quite stunning, really.

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