Peter Boettke - Profile on Academia.edu (original) (raw)

Papers by Peter Boettke

The Journal of Markets and Morality, Aug 29, 2017

This article discusses the consequences of John Maynard Keynes for the science of political econo... more This article discusses the consequences of John Maynard Keynes for the science of political economy: the fields of economics, economic policy, and politics. It argues that the consequences of Keynes in all three fields were negative and resulted in a significant retrogression. For economics, a macroeconomic theory of an unstable capitalist economy supplanted the theory of the market process that concentrated on the individual actions of entrepreneurs and their effects on relative prices and production. For economic policy, activist tinkering on behalf of policy advisors replaced the theory of limited and hands-off governments. For politics, unrestricted politicians and continual deficits and inflation replaced restrained politicians who adhered to balanced budgets and sound money.

Social Science Research Network, 2012

represents another breakthrough work in her career, and the second volume in a multi-volume work ... more represents another breakthrough work in her career, and the second volume in a multi-volume work on the economic and intellectual history of western civilization. In a sense, the subtitle of the book explains well what this volume is all about--why economics can't explain the modern world. An important modifier would bemodern economics can't explain the modern worldbecause much of what McCloskey argues is the resurrection of an older argument that was associated with classical liberal political economists from Smith, Bastiat, Mises, Hayek and Friedman. Fundamentally, she reasserts the power of ideas to shape the world. McCloskey's narrative is simple and compelling --materialist stories (whether technological, genetic, or institutional) do not work; incentive based stories do not provide a complete picture of why some countries grew rich while others remained poor, let alone for the exact timing for the divergence in the wealth and poverty of nations with the Industrial Revolution in the 18 th and 19 th century. McCloskey proposes that incentive based explanations must reside within a broader narrative that addresses values and beliefs, as well as institutions, technologies, and material conditions. In doing so, McCloskey paves the way for a true behavioral approach to a political and economic inquiry into the nature and causes of the wealth of nations. JEL Codes: N00; O10; P10 A tide of opinion, once it flows strongly, tends to sweep over all obstacles, all contrary views. --Milton Friedman and Rose Friedman, Free to Choose (1980, 284) Deirdre McCloskey's Bourgeois Dignity (2010) critically engages the theoretical and historical literature on the rise of capitalism in the 18 th and 19 th centuries, and then traces out the implications of that argument for the 20 th and 21 st centuries. It is a breathtaking intellectual tour and its emphasis on the shift of rhetoric concerning the bourgeois,

Social Science Research Network, 2010

PLOS ONE, Jul 14, 2022

Economists well understand that the work of Friedrich Hayek contains important theoretical insigh... more Economists well understand that the work of Friedrich Hayek contains important theoretical insights. It is less often acknowledged that his work contains testable predictions about the nature of market processes. Vernon Smith termed the most important one the 'Hayek hypothesis': that gains from trade can be realized in the presence of diffuse, decentralized information, and in the absence of price-taking behavior and centralized market direction. Vernon Smith tested this prediction by surveying data on laboratory experimental markets and found strong support. We extend Smith's work first by showing how subsequent theoretical advances provide a theoretical foundation for the Hayek Hypothesis. We then test the hypothesis using recent field experimental market data. Using field experiments allows us to test several other predictions from Hayek, such as that market experience increases the realized gains from trade. Generally speaking, we find support for Hayek's theories.

The Review of Austrian Economics, Aug 13, 2011

James Scott has written a detailed ethnography on the lives of the peoples of upland Southeast As... more James Scott has written a detailed ethnography on the lives of the peoples of upland Southeast Asia who choose to escape oppressive government by living at the edge of their civilization. To the political economist the fascinating story told by Scott provides useful narratives in need of analytical exposition. There remains in this work a "plea for mechanism"; the mechanisms that enable social cooperation to emerge among individuals living outside the realm of state control. Social cooperation outside the formal rules of governance, nevertheless require "rules" of social intercourse, and techniques of "enforcement" to ensure the disciplining of opportunistic behavior.

Edward Elgar Publishing eBooks, Jun 26, 2015

Research examining the importance of path dependence and culture for institutions and development... more Research examining the importance of path dependence and culture for institutions and development tells us that "history matters," but not how history matters. To provide this missing "how," we provide a framework for understanding institutional "stickiness" based on the regression theorem. The regression theorem maintains that the stickiness, and therefore likely success, of any proposed institutional change is a function of that institution's status in relationship to indigenous agents in the previous time period. This framework for analyzing institutional stickiness creates the core of what we call the New Development Economics. Historical cases of postwar reconstruction and transition efforts provide evidence for our claim. Teeth-gritting humility, patience, curiosity and independent thinking are called for in learning how superior foreign technology works and how it can be improved. Without these conditions the technical assistance "does not take." The cut flowers wither and die because they have no roots. Paul Streeten (1995: 11-12) I

The Independent Review, 2014

The vision of the eighteenth--century philosophers which enabled them to describe a social order ... more The vision of the eighteenth--century philosophers which enabled them to describe a social order that did not require the centralized direction of man over man may yet stir excitement. Free relations among free man -this precept of ordered anarchy can emerge as principle when successfully renegotiated social contract puts "mine and thine" in a newly defined structural arrangement and when the Leviathan that threatens is placed within new limits. ----James Buchanan (1975, 227--28, emphasis original) In "The Soul of Classical Liberalism" (2000), James Buchanan argues that modern advocates of the liberal order must move beyond the mid--20 th century project of "saving the books" and "saving the ideas" and instead embrace the challenge of "saving the soul" of liberalism. His argument is fairly straightforward: the vast majority of modern defenders of classical liberalism are economists, and they base their defense on the logic and evidence that as scientific economists they work with. But these insights understandably do not translate easily into the popular imagination. The prospects for establishing a genuine liberal order, however, turn on capturing the intellectual imagination of a significant segment of the population. I am in complete agreement with Buchanan, and I myself had a similar experience that he had in experiencing a "mind--quake" when introduced to the vision of the spontaneous ordering of the free enterprise market economy as a student. Once that vision was in my head, in retrospect, it is hard to imagine any other path that I could have pursued professionally. However, like Buchanan, I do also wonder why

Social Science Research Network, 2009

Investigations of a society's competitiveness aim to trace the causal mechanisms behind patterns ... more Investigations of a society's competitiveness aim to trace the causal mechanisms behind patterns in wealth and poverty across societies. This paper argues that to be productive such investigations must be comparative, historical and political economic in nature. Comparative historical political economy is how social scientists generate useful knowledge about the wealth and poverty of nations. Our contribution is a methodology-or rather a collection of methodologies-for understanding national competitiveness and attempts to improve it: one focuses on political-economic analysis, another on historical analysis, and a third on comparative analysis.

The Review of Austrian Economics, Feb 20, 2018

In the late 1970s, James Buchanan argued that future progress in economics and political economy ... more In the late 1970s, James Buchanan argued that future progress in economics and political economy will come from the conciliation, not conflict, of the research traditions of property rights economics, law and economics, public choice economics, and market process economics. He also argued that this program would meet resistance from the orthodoxy, and that it will require acts of academic entrepreneurship and the establishment of various footholds throughout the academic world. In 1986, after receiving the Nobel Prize, Buchanan discussed how his recognition gave hope to those at the edge of the academic establishment, and how he hoped it would inspire them to appropriately challenge the orthodoxy. Public choice analysis has influenced economics, political science, law, and history. Institutes, centers, associations, outreach seminars, book series, and journals have all emerged over that 30 year period since Buchanan's Nobel Prize to encourage, support, and communicate research and education in the field of political economy proper throughout Europe, North America, Latin America, and Asia. In October 2016 the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at George Mason University celebrated Buchanan's achievement and the implications for the field of political economy with a collection of papers. Two of the papers presented as part of that celebration follow. Michael Munger discusses the three main foundations of Public Choice theory and develops Buchanan's theory of politics as exchange. David Schmidtz contends that James Buchanan's career offered a counter to the tendency of scholars to narrowly specialize by practicing moral philosophy as it had been done in the past. Buchanan's call for an integration of property rights, law and economics, public choice, and market process economics still requires intellectual entrepreneurs to act boldly to challenge the conventional wisdom methodologically, analytically, and socialphilosophically. Buchanan remains in my opinion the exemplary scholar in modern political economy. But one thing he never did was rest on his laurels. In fact, he

Advances in Austrian Economics, Nov 30, 2016

Social Science Research Network, 2015

Journal of Global Initiatives: Policy, Pedagogy, Perspective, Jan 4, 2018

This paper explores the economics and politics of the tragic Soviet experiment with socialism. Be... more This paper explores the economics and politics of the tragic Soviet experiment with socialism. Beginning with the period of "War Communism" between 1917 and 1921, the Soviet government's attempt to implement socialism failed to achieve its stated objectives, namely to create social harmony, eliminate class struggle, and to unleash advanced material production. It attempted to achieve these ends by abolishing private property and market prices in the means of production, eliminating the incentives and information necessary to guide production in an efficient manner. The unintended political and economic results were disastrous, leading to tyranny, famine, and oppression. Failing to achieve its stated objectives, after 1921 the Soviet Communist regime continued to survive only by changing the meaning of socialism. De jure socialism in the Soviet Union continued to mean the abolition of private property and market competition of the means of production. However, de facto, this meant the monetization of political control over resources, via black market exchange, in a shortage economy, and competition for leadership in the Communist Party to control such resources. As a result, the Soviet political system failed to achieve the ideals of socialism on its own terms, not only because central planning eliminated the institutional conditions necessary to allocate resources productively, but also because central planning created the institutional conditions by which the worst men, those most able and willing to exercise force in a totalitarian environment, got to the top of the political hierarchy.

There is increasing focus, both in the policy and academic realms, on the entrepreneur as the dri... more There is increasing focus, both in the policy and academic realms, on the entrepreneur as the driver of economic change and growth. For policymakers, the focus on entrepreneurship has been a recent phenomenon. In 1998, for example, the Organization for Economic Cooperation and Development launched a program, Fostering Entrepreneurship, to better understand the role of entrepreneurs in the economy. 1 Along similar lines, governments throughout the world have launched various initiatives designed to promote entrepreneurship and economic growth. The importance of the entrepreneur in economic development has also been realized by key international aid organizations. The World Bank, the United States Agency for International Development (USAID), and the International Monetary Fund (IMF) have undertaken initiatives to understand and promote entrepreneurship in developing countries. Although many in the economics literature realize the importance of the entrepreneur, this topic has not received the widespread recognition that it deserves. This lack of focus results primarily from the fact that it is difficult to formally model and measure entrepreneurial behavior. Institutions are also often missing from formal models and their influence on economic decisions is often ignored. Economists associated with the Austrian school of economics, on the other hand, have long focused their attention on 7-2 the economic study of entrepreneurship and institutions, providing a robust literature emphasizing the importance of these areas. Institutions refer to the formal and informal rules governing human behavior and vary across time and space. In contrast to other schools of economic thought, the Austrians have not only realized the importance of institutions, but have attempted to provide a connection between an economic understanding of institutions, the market process, and entrepreneurship. This is an important connection because institutions create the rules of the game that influence the behaviors of private actors including entrepreneurs. Further, Austrians stress that entrepreneurship does not describe a distinct group of individuals, but rather, is an omnipresent aspect of human action. In fact, the entrepreneurial element in human action entails the discovery of new data and information; discovering anew each day not only the appropriate means, but also the ends that are to be pursued. Moreover, Austrian scholars show that the ability to spot changes in information is not limited to a selective group of agents--all agents posses the capacity to do so (see Chapter 1 in this volume). The recognition that the institutions in which economic agents (including entrepreneurs) operate in--political, legal, and cultural--directly influence their behavior and hence economic development is a recent development. Until very recently, as we will discuss in the next section, economists interested in growth and development had been largely influenced by the work of the economist John Maynard Keynes. Keynes's main work, The General Theory of Employment, Interest and Money, provided a critique of the classical model of self-regulating markets, a diagnosis of why the economies of Great

Social Science Research Network, Oct 7, 2007

Property rights are a key aspect of the rules governing economic interactions, providing individu... more Property rights are a key aspect of the rules governing economic interactions, providing individuals with dependable information and incentives. Well-defined and stable property rights encourage the effective use of existing scarce resources and also provide the incentive to innovate. In this context, we explore the impact of government takings on entrepreneurship and the market process. By changing the rules of the game, takings distorts the market process by shifting the opportunities and incentives facing entrepreneurs. The use of takings also introduces "regime uncertainty" whereby the predictability of the rules of the game is weakened. These costs of takings are typically overlooked because they involve unrealized entrepreneurial opportunities that cannot be captured in standard cost-benefit calculations.

Classical political Economy

Encyclopedia of Political Theory

Classical Political Economy is characterized by the systemic study of economic forces. Primarily ... more Classical Political Economy is characterized by the systemic study of economic forces. Primarily concerned with the dynamics of economic growth, the classical economists sought to explain how and why wealth is created and destroyed. Their study found the role of institutions central in answering this question and as a result, stressed the importance of laissez-faire, free trade, and free competition. This entry reviews the history and basic elements of classical liberty political economy, some of the criticisms that have been raised, and the impact of classical political economy on economic policy.

Edward Elgar Publishing eBooks, Dec 29, 2017

Econ Journal Watch, 2004

BOOK REVIEWERS KNOW THAT IT IS A CHALLENGE TO REVIEW A collection of 12 separately-authored essay... more BOOK REVIEWERS KNOW THAT IT IS A CHALLENGE TO REVIEW A collection of 12 separately-authored essays. Here, we have been asked to read and comment briefly on the character of the 62 dense, technical articles in the six 2002 issues of the Journal of Development Economics (vols. 67, 68, and 69). Started in 1974, the journal is published by Elsevier and is conventionally regarded as one of the top field journals in development economics. There is no way to discuss more than a few in any detail. We have read the entire set, but we have not attempted to really master the material. We approached the material with critical priors that, to our mind, were essentially confirmed, but we try not to let our treatment become cavalier or dismissive. Unfortunately, it is perhaps inevitable that a brief and unfavorable gloss on the character of a set of 62 articles will come off as cavalier. Around the mid-20 th century, economics strived to develop, in the phraseology of Francis Bator, "institutionally antiseptic theory." The strong trend was toward ahistorical, acontextual, and uniformly mathematical

Polycentricity, Self-governance, and the Art & Science of Association

The Review of Austrian Economics, Jun 10, 2014

ABSTRACT When considered as a unified project, the Ostroms’ themes of polycentricity, self-govern... more ABSTRACT When considered as a unified project, the Ostroms’ themes of polycentricity, self-governance, and the art and science of association have strong intellectual roots and connections with Austrian economics. In this paper, we show the close relationship between the Ostroms and the Austrians. We then describe how contemporary Austrian economists can be inspired and can further the work of the Ostroms in the areas of civil societies and self-governing communities, the use of fieldwork and case studies, and public economies and coproduction. Although there are perceived tensions between the Ostroms and the Austrians, we contend that these can be reconciled and pursued as fruitful areas of research.

Efforts to export democracy and liberty through military intervention have often been ineffective... more Efforts to export democracy and liberty through military intervention have often been ineffective and have resulted in unintended and undesirable consequences. Countries are free because of belief systems, and institutions that follow from those beliefs, which support and reinforce political and economic freedom. Rational constructivist attempts at nation building are therefore likely to fail in places where there is no tradition of such beliefs and institutions. In this superb book Coyne argues that principled non-interventionism and free trade have historically had the greatest degree of success and should be our guiding policies today. The USA is currently embroiled in an incredibly costly effort to reconstruct Iraq into a viable democracy. Nobel Prize-winning economist Joseph Stiglitz has estimated that the cost of this effort will exceed $2 trillion. Yes, I did write trillion. Whatever our ultimate assessment of Stiglitz’s accounting of the monetary cost of the war, we have to ...

Expositions, 2019

Once man is conceived in the image of an artifact, who constructs himself through his own choices... more Once man is conceived in the image of an artifact, who constructs himself through his own choices, he sheds the animalistically determined path of existence laid out for him by the orthodox economists' model. A determined and programmed existence is replaced by the uncertain and exciting quest that life must be.