The science of economics is born out of the puzzle that the coordination of economic activities presents to our imagination. The solution to that puzzle is the entrepreneurial market process. Israel Kirzner has argued that the market economy operates with ruthless efficiency to coordinate economic activities and realize the gains from social cooperation under the division of labor because of the institutional framework within which it operates, namely private property rights.
James Buchanan argued that the role of the political economist is to “stress the technical economic principles that one must understand in order to assess alternative arrangements for promoting peaceful cooperation and productive specialization among free men.” Although Buchanan is never mentioned in Mass Flourishing, Edmund Phelps, a Nobel laureate in economics, embraces this role of the political economist in analyzing the positive and normative implications of modern economic growth that began in the West during the early nineteenth century.
This paper examines how pre-disaster systems of self-governance aid in post-disaster community recovery. Our analysis focuses on the Mary Queen of Vietnam (MQVN) community and Gentilly, examines the effectiveness of their systems of self-governance prior to Hurricane Katrina and explores the role these systems played in promoting community recovery after the disaster.
Mired in the imaginary world of long run equilibrium, mainstream neoclassical economics is oblivious to the obstacles that stand in the way of successful social cooperation. Its arid mathematical models, engaged in an in-depth analysis of a world where the economic problem has already been successfully resolved, simply assume away the problems that any economy faces in achieving an optimal coordination of means and ends.
In the developing world, kidnapping is relatively common, and a market for kidnap insurance has arisen in response. We provide a model that allows us to analyze how kidnap insurance affects the interaction between the kidnapper and the victim’s family when both are self-interested and have complete knowledge.
The Genesis and Ethos of the Market asserts that virtue is not inconsistent with economic liberty. This raises the question about the relationship between virtue and economic liberty addressed in the “Civil Economy” tradition of the Neapolitan Enlightenment.
Even notable free market scholars in the 20th Century lamented the inescapable decline in intimate social relations that would emerge from the wide-scale adoption of an extended market order. This paper challenges this view that markets erode social relations by challenging the concept that the usage of money or barter are the logical distinction between the intimate and extended order, and then by offering the framework of exit, voice, and loyalty as an improved distinction between the intimate and extended order.
Before the advent of workplace safety regulations, factories with poor working conditions were often economic springboards of prosperity in the developed world. This lesson is vitally important for activists who want to improve the lives of sweatshop workers in developing countries today.
The new paternalists advocate using excise taxes to discourage “undesirable” behavior and to offset costs imposed on third parties. But using tax policy to socially engineer behavior gives rise to another social pathology: wasteful political entrepreneurship.
Mercatus PhD Fellow Vipin Veetil, along with Akshaya Vijayalakshmi and Srikanth Viswanathan, address Amartya Sen's criticism of cash-transfer programs such as education vouchers in the Wall Street Journal.
When most people think of prison gangs, they think of chaotic bands of violent, racist thugs. Few people think of gangs as sophisticated organizations (often with elaborate written constitutions) that regulate the prison black market, adjudicate conflicts, and strategically balance the competing demands of inmates, gang members, and correctional officers.