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Quotation of the Day…

… is from page 74 of my late Nobel laureate colleague Jim Buchanan’s pioneering February 1962 article in EconomicaPolitics, Policy, and the Pigovian Margins,” as this article is reprinted in volume 1 of The Collected Works of James M. Buchanan: The Logical Foundations of Constitutional Liberty:

The almost universal neglect of the imperfections that might arise from the political attempts at applying the economists’ efficiency criteria represents a serious deficiency in the work of welfare economists and economists generally. To shy away from considerations of the politically feasible has been deemed an admirable trait, but to refuse to exams the politically possible is incomplete scholarship.

DBx: This problem with economics scholarship hasn’t much improved over the course of the 58 years since Jim offered this well-deserved criticism of his fellow economists. The standards against which the performance of real-world markets is compared are unhelpfully unrealistic; the unwillingness to see the market as a process through which market ‘imperfections’ are discovered and dealt with creatively yet feasibly (if never ‘perfectly’) remains stubbornly entrenched; and the assumptions made about the knowledge possessed by, and about the incentives facing, political actors continue to be absurdly fantastical.


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