Coordination Problem

Bruce Caldwell talk at Ohio University on F. A. Hayek: Life and Legacy (March 2017)

|Peter Boettke|

Bruce Caldwell has spent the better part of 30 years studying as a historian of ideas the thought of F. A. Hayek, and more broadly the arc of his career as a way to understand the history of 20th century economic thought.

 

 I just sent in my own book -- F. A. Hayek: Economics, Political Economy, and Social Philosophy -- to the publishers.  In the process of researching and writing up this book, I worked with my wonderful graduate students to start collecting what I am calling a Living Bibliography of Works on Hayek and I hope you will consult this document and contribute to its ongoing evolution.

Interactive Teaching as Research Productive Teaching

|Peter Boettke|

This video clip is from the Special Collections Oral History of GMU.  It discusses Buchanan's approach to teaching, and his shift of focus from his journeyman years of teaching at Tenn and Florida State to his graduate course in Public Finance and Welfare Economics at UVA and his effort to involve the students in his research process.  Also note his discussion of the difference between Jacob Viner and T. W. Schultz in their approach to teaching.  Buchanan embraces the Schultz approach and rejects the Viner approach, and in my experience that is 100% accurate.

 

 I had the good fortune to have some great teachers of economics in my formative years -- as I discuss in Living Economics: Hans Sennholz, James Buchanan, Gordon Tullock, Robert Tollison, Kenneth Boulding, and Don Lavoie (to name only those who are unfortunately no longer with us).  They had different styles and methods of engagement.  I learned from all. But Buchanan and Lavoie had the deepest impact on me and my eventual professional path because of this issue of active engagement with their research program.  Sennholz changed my life trajectory, but Buchanan and Lavoie taught me how to pursue that new trajectory and give shape and meaning to it.  

This is all about learning, and life long learning at that.

Reconnecting Economics with Moral Sciences

|Peter Boettke|

INET and Michael Sandel will be starting a new video series on what money can and cannot buy, and in the process reconnect economics with moral philosophy.

 There is much to learn from his musings. But I believe he also has some serious blind spots.  Since I began my career focused on the history of ideas on socialism, and history of practice of socialism, these issues of what was science, and what was normative theorizing was critical to my enterprise.  See, e.g., this paper published with a certain sense of irony in Faith & Economics. But my own thinking on this can be seen in a series of essays throughout my career -- hopefully reflecting both coherence and growth -- can be found here, here and here.  Kaitlyn Woltz and I have recently contributed a paper to Mark White's Oxford Handbook on Economics & Ethics as well that should be published in the next year.  

Yes, Virginia, Economics is a Science, but Political Economy is an Art.  And the worldly philosophy is best practiced when we remember this, and practice our craft in the tradition of Adam Smith to John Stewart Mill.  Someday I am going to write a book dealing with the fate of moral philosophers in the age of economic scientism.

Art, Science and Political Economy*

|Peter Boettke|

John Neville Keynes (1852-1949), the father of John Maynard Keynes, famously divided economics into positive economics (study of what is), normative economics (study of what should be) and the "art of economics" (applied economics where the lessons of positive economics are utilized to address normative economics).  It is in the "art" that J. N. Keynes (and Marshall and Pigou) thought that the science of economics will bear fruit.

James M. Buchanan (1959) similarly argued that "positive economics" and "political economy" could be reconciled in a way that the zeal of the idealistic reformer could be satisfied while the discipline of the science was maintained.  Suggestions for change (what should be), Buchanan argued, would be limited to changes in the structural rules, and the suggested changes should be treated as hypotheses to be tested in the democratic process of collective decision making.  Buchanan's process is guided throughout by a true (not hypothetical) compensation principle and the ultimate test is agreement.  In making his argument, Buchanan was also affirming an important democratic principle -- we economists have no privileged position in the conversation with our fellow citizens.

Of course, this insistence on the democratic principle as a constraint separates Buchanan from others in this discussion of the science and art of economics and political economy.  Keynes, and more famously his son, held fast to the commitment that economics must bear fruit and provide "expert" advice on how to address social ills -- be that poverty, ignorance, and squalor, or instability, idleness and inequality.  Those trained in economics can design appropriate solutions to society's problems and fix the world in the service of democratic polities.  The "experts" can effectively govern over, not govern with, their fellow citizens.  This was, and remains, the "Harvey Road" presumption, or in the US the "K Street" presumption, that dominates progress thought.

Buchanan's negative reaction against this is evident from his first paper, where he challenges the idea of the "fisc" (1949) and it is obviously there in his Nobel lecture where he invokes Wicksell -- as he did throughout his career -- to argue that economists must cease proffering advice as if they were employed by a benevolent despot. (1987)  His argument has roots not only in Wicksell, but in Knight and Hayek.  Knight once states that when he hears an economist say "I want power to achieve X, Y, Z", he stops listening after the first 3 words because those are the only words you can believe.  Knight also repeatedly argued that appeals for expert rule where fundamentally non-democratic in nature.  Now imagine what a hard pill that was for Knight to swallow because he also believed economics was little more than applied common sense and that fellow citizens would see the points being made by sound economic theory if only they would open their eyes.  But even given this reality of a citizenship often composed of individuals suffering from ignorant prejudices, the economist has no privileged place in democratic deliberation.  He cannot impose his will on fellow citizens, he can only attempt to persuade them through thoughtful deliberation to see his point.  To Knight and Buchanan the idea of government by discourse is critical to understanding their system of thought.

From Hayek, on the other hand, Buchanan drew inspiration not only about the spontaneous ordering of affairs within a specified institutional framework, but the necessity of, and importance of, the institutional framework as a subject of serious study.  Buchanan called for a "genuine institutional economics".  "The standard procedure," Buchanan argued, "of assuming competitive order is not acceptable.  Appropriately thorough analysis would include an examination of the institutional structure itself in a predictive explanatory sense.  The economist should not be content with postulating models and then working within such models.  His task includes the derivation of the institutional order itself from the set of elementary behavioral hypotheses with which he commences." (1965, 5) In short, institutions matter.  And, for economic analysis to be meaningful, institutions must be endogenous to the analysis.

Buchanan differed in a serious way from Hayek in how he went about endogenizing institutions, and his various analytical moves effectively meant that constitutional craftsmanship for him would take on a sort of top-down character.  But a genuine institutional economics need not proceed in that fashion.  Elinor Ostrom's various studies of collective decision making and constitutional craftsmanship, for example, are more or less all bottom-up explanations.

The point I want to stress is a methodological and analytical one. If the "art" of economics and political economy is to be found in the rule-level of analysis -- as I believe it is -- then how best do we study the emergence of institutions and analyze the maintenance, and perhaps deterioration, of institutions using the tools of basic economic reasoning (positive economics)?  We cannot be content with what Barry Weingast has recently called the "neoclassical fallacy" where institutions are acknowledged but not analyzed.  Our goal must be, as Buchanan once put it, to use "the technical economic principles that one must understand in order to assess alternative arrangements for promoting peaceful cooperation and productive specialization among free men.  Yet political economists go further and frankly try to bring out into the open the philosophical issues that necessarily underlie all discussions of the appropriate functions of government and all proposed policy measures."

Thinking in our discipline cannot be done in splendid isolation.  This was a core motivating idea behind the Public Choice Society, and its predecessor The Committee on Non-Market Decision Making.  Vincent Ostrom used to suggest we needed a new science of politics, a new science of sociology, and a new science of economics so we can realize the "art and science of association" appropriate for a democratic society.  This necessitates a return in our teaching and our research to the modes of thinking and habits of thought one finds in moral philosophy and moral sciences from Adam Smith to John Stuart Mill.  During that period Philosophy, Politics, and Economics were blended seamlessly together, not just a smorgasbord of classes patched together to meet degree requirements. And, the empirical testing ground was to be found in history and anthropology and archeology, and not in data analysis per se.

We must be prepared today to wrestle with the same problems that Mises/Knight/Hayek faced and which Buchanan/Tullock/Ostrom faced -- the fate of moral philosophers in the age of economics scientism.  And, we must recognize that if we fail in this task, as Hayek warned in his Nobel lecture, we don't just condemn economics to intellectual bankruptcy, we actually commit ourselves to standing idly by as those self-anointed economic "experts" become potential tyrants over their fellow citizens and destroyers of civilization.

The stakes we might say are quite high.

 

-------------------

*Remarks read at the 2018 Public Choice Society meetings in Charleston, SC.  

The Surveillance State is Developed Abroad But Perfected at Home

|Peter Boettke|

Randolph Bourne famously said "War is the health of the state."  He easily could have said, War is the Bringer of Tyranny.  We often hear that War and Military interventions is what protects us from Tyranny.  But if you look at the blow-back both in terms of enemy combatants AND in terms of the loss of our domestic liberties that are sacrificed both to fight the wars and with the traveling back home of practices learned overseas to keep populations under military control.  War, what is it good for, absolutely nothing -- is perhaps an even more poignant phrase than Bourne's famous words.

See the first video promotion of Chris Coyne and Abby Hall's Tyranny Comes Home.

What Could Possibly Go Wrong?

|Peter Boettke|

Watch this very important video lesson from Tyler Cowen on How the Fed Works.

 

 Now, go read Milton Friedman's 1947 review essay of Abba Lerner's The Economics of Control in the JPE.  Are the "administrative costs" being taken into account in this evolving Fed and the public policies chosen?  Those administrative costs include both incentive alignment issues and information processing issues, let alone more subtle issues having to do with knowledge and learning.  In short, any institutional regime that presupposes for its operation omniscient and benevolent public servants is going to have issues in practice.  As Friedman warned in Capitalism and Freedom, any institutional arrangement for monetary policy where a sincere error by a few can threaten the long-term performance, and perhaps even viability, of the economic system is perhaps an institutional arrangement we cannot afford.

So Cowen's depiction of how the Fed operates seems to nicely capture the way monetary policy was followed in the wake of the Great Recession, but I personally would always place in juxtaposition George Selgin's rather damning portrayal of Fed policy in "Operation Twist the Truth." All the parts Cowen describes are there, but the purpose and the consequences are interpreted in a more critical light.  Selgin's views in general can be found in his collection of articles Money: Free and Unfree. Roger Koppl's From Crisis to Confidence also provides an excellent primer on macroeconomics after the crisis, and one that takes seriously the problem of "expert failure", especially failure by an monopoly expert, which of course the Fed is institutionally established as in the realm of monetary policy. See Koppl's new book Expert Failure for a general discussion of these points of social epistemology and public policy.

Larry White, of course, has long asks us to consider whether our monetary policies are being pursued according to the Rule of Law, or by the Rule of Central Bankers?

Dan Smith and I have written about the evolving views of Hayek, Friedman and Buchanan on monetary policy because of their frustration to effectively bound the discretionary authority of the Fed.  Fed discretion, on the other hand, has continually meant historically that political influence impacts monetary policy in a counter-productive manner, as Dan and I also argue in a separate article.

The video is a great teaching tool, but the political economy question is whether such tools of monetary policy bring sound money to the economic system, or represent simply the latest evolution of the techniques for creating the illusion of prosperity in the short-run while distorting economic relations, and in fact, deforming the economic system in the long-run.  If you include in your analysis of "macroeconomic policy" also fiscal policy, then you get a sort of perfect storm that has bothered economists since the time of Adam Smith -- unsound money and irresponsible fiscal policy, which has been the hallmark of the government "juggling tricks" from ancient times to modern times.  Juggling is all well and good, but even master jugglers sometimes fail.

 Perhaps we better think hard about the downside risk of monetary mismanagement for the economic health of the economy when contemplating the evolving powers and responsibilities of the Fed and the central bankers we entrust with the system. 

You Just Lack Training ...

|Peter Boettke|

As a graduate student I took 2 PhD seminars with James Buchanan -- Philosophy and Economics, and Constitutional Economics.  In the Philosophy and Economics class he periodically would ask us very basic but technical questions about economic theory -- opportunity cost being a favorite, but sometimes he asked more specific questions about the models -- inframarginal, or increasing returns were particular topics of interest.  As I have said on several occasions, Buchanan was the opposite of Tullock in the classroom in my experience.  Tullock was intellectual jiu jitsu, where you are always on guard and he was always trying to knock you off balance.  Buchanan was a guiding hand that was trying to get you to think seriously about economics and the ethical/moral dimensions of political economy.  He would make even the most lost student seem to be a vital contributor to the ongoing conversation.  But, on these issues of the technical principles of economics if you goofed up, he didn't cut you to the ground like Tullock, though he would just utter something along the lines "It's not your fault, you just lack training."  Which I guess for a grad student is pretty damning, so you would run home or to the library and try to correct your misunderstanding.  Since he emphasized very subtle points in economic reasoning -- see for example Cost and Choice -- this was not an easy intellectual exercise, but one that took serious effort and contemplation.  I am still learning 30 years later when I think about the questions he asked us to think about in class and in our short essays.

I just returned from the Association of Private Enterprise Educators annual conference, I was part of a panel that discussed "Enduring Contributions of James M. Buchanan", and I presented a paper "James Buchanan and the Properly Trained Economist."  You can find the draft of this short essay below.

 

James Buchanan and the Properly Trained Economist

Peter J Boettke*

In his essay on “Economics and its Scientific Neighbors,” Buchanan argues that the properly trained economist must have the principles of the discipline always by their side. The task of the political economist is to use the technical principles to assess how alternative institutional arrangements encourage or hinder the ability of individuals to realize the gains from production specialization and peaceful social cooperation. "As a 'social' scientist,” Buchanan argued, “the primary function of the economist is to explain the workings of these institutions and to predict the effects of changes in their structures. As the interaction process that he examines becomes more complex, it is but natural that the task of the economic scientists becomes more intricate. But his central principle remains the same, and he can, through its use, unravel the most tangled sets of structural relationships among human beings” (1966 [2001]: 7).

Economics properly understood makes sense out the complex web of human relations that constitute reality. “The economist,” Buchanan continues, “is able to do this because he possesses this central principle – an underlying theory of human behavior. And because he does so, he qualifies as a scientist and his discipline as a science. What a science does, or should do, is simply to allow the average man, through professional specialization, to command the heights of genius. The basic tools are the simple principles, and these are chained forever to the properly disciplined professional. Without them, he is as a jibbering idiot, who makes only noise under an illusion of speech” (1966 [2001]: 7).

So, the first task of the properly trained economist is to avoid becoming a jibbering idiot. What might lead someone astray in the discipline of economics and lead us not to enlightenment, but to mistaking noise for sense? Buchanan’s consistent answer from the beginning of his career was a methodological one, and is best exemplified in “What Should Economists Do?” when he worries about the practice of nonsensical social science when the pure logic of choice and the allocation of resources is given the primary place in economics as opposed to exchange and the institutions within which exchange takes place.

As we have been processing the Buchanan archives at GMU, it has been fascinating to get a window into Buchanan’s world. This collection -- which now runs 192 linear feet -- reveals a surprising consistency in Buchanan’s writings and his academic entrepreneurship and his private correspondence.[1]. Critical to understanding Buchanan’s system is that he is a liberal political economist in the tradition of Hume-Smith and Knight-Mises-Hayek, he is a methodological individualist in the tradition of Knight-Mises, he is price theorist in the tradition of Marshall-Knight, and he is public finance theorist in the tradition of Wicksell. All these elements are wrapped up in his economics. Furthermore, he has a deep commitment to government through discourse, and perhaps an even deeper commitment to the relatively absolute absolute. No one individual or group of individual is privileged either by nature or in deliberation over others. No one, and no group, have unique access to TRUTH. In fact, any claim in politics to TRUTH leads to tyranny plain and simple. All we can have in politics is consensus, and since there is no unified scale of values for society as a whole, all we can ever reasonably expect to get a consensus over is not ends, but the acceptable range of means by which we each pursue our separate and often desperate ends and how we relate to one another in our efforts to pursue those ends.

In the late 1970s, all these issues are brought out I would argue in a exchange of letters with one of his former students -- Richard McKenzie. McKenzie had just recently published with Tullock, The New World of Economics, which is a relentless application of the economic way of thinking to all walks of life. He is also working on a paper dealing with the constitutional moment in the US, which challenges the public spirited interpretation and pursues instead a pure private interest explanation. This particular exchange of letters runs from May 29, 1979 to June 25, 1979 and consists of 2 letters from each party. McKenzie begins the conversation by asking for Buchanan’s reaction on his work on constitutions. He references Charles Beard’s economic interpretation of the constitution, and asks Buchanan the following: “I recognize that Beard may not be right in his analysis; but if he is, does my analysis follow?”

Buchanan’s response is harsh, but also framed with a self-effacing “quasi-serious” quip and informing McKenzie that he probably needs to be constrained as a scholar to keep his very good talents “from running to excess.” He informs McKenzie that he does not like his paper, and in fact considers his paper to be profoundly immoral as it violates the norms of the civic religion with the over-extension of the logic of economics. He then says that he “felt a bit the same way about some of your applications in “New World”.” There are limits to economics analysis, Buchanan insists, “beyond which it is inappropriate to do go, for to do so will undermine myths, sacrosanct objects, concepts, ideas, that have intrinsic value in their own rights.” Buchanan ends that paragraph by informing McKenzie that the mythology that the founders were disinterested public servants “has served us very well for two centuries, and, quite literally, I think it is a sin to destroy this mythology.”

The reason, the social order of the liberal society, its stability and its viability, is intimately connected to the maintenance of this civic religion. Destroy the civic religion, you destroy the social order. He ends his letter chiding McKenzie to be more reflective of his position, one that steers a path away from a strict interpretation of “New World” and more toward one that recognizes the ethical-moral cement of the social order.

McKenzie responds immediately, and says that while the comments from Buchanan were not totally unexpected, he pushes back or seeks to clarify his position, especially as it relates to The New World. He “defends” the extreme examples as a method to capture the imagination of the students, to shock them out of their complacency so they may see the power of the principle being illustrated. He ensures Buchanan that he is not completely serious in the choice of examples. And then he adds that he believes that students get this, but that perhaps some instructors don’t.

Buchanan’s response brings us back to our theme here. As he says to McKenzie in a letter of 25 June 1979, “I think that you can appreciate my own position, which places very heavy weight on ethical-moral constraints, and on noneconomic explanations generally. But yet you can also see the power of the simplistic economic explanation, and you, like me, recognize that these explanations are, after all, our own stock in trade.” But our discipline must resist the scientistic urge, “Our raison d’etre is not to act like, or to ape the scientists at all. And we would not like the world of the economic scientists at all.” Here Buchanan lays out his position, which has been developed throughout his writings, that our role as economists is “basically didactic”, this is not a preacher, but the teacher that cultivates in their students an appreciation and understanding of the spontaneous ordering of the market economy.

But once he makes this standard claim of his, Buchanan stresses that there are multiple windows into the world through which one can look, and that “we should all come to accept the fact that politics involves talking pure and simple”. Buchanan had with his own public choice analysis attempted to pierce the romantic veneer of modern democratic politics, but once the romance is no more, Buchanan fears that if we “become generally convinced that politics is pure transfer” then all that is left is fighting over each others’ shares.

            When Buchanan took up the task to describe what he and his colleagues were hoping to accomplish with the establishment of the Thomas Jefferson Center for Studies in Political Economy, he argued that the idea was to continue in the grand and honorable tradition of political economy, and that the task of the political economist was first and foremost to utilize the technical principles of economics that are necessary to access how alternative institutional arrangements enable or hinder the pursuit of individuals to pursue productive specialization and peaceful social cooperation. However, the second aspect of the task of political economy is to bring into the open the moral and philosophical investigations of the questions dealing with the scale and scope government in all deliberations concerning public policy.

            This remains the task of the properly trained economist. Others that fall short in this question, are not evil or dim, but they perhaps just “lack training.”

 

* University Professor of Economics & Philosophy, George Mason University, MSN 1A1, Fairfax, VA 22030 pboettke@gmu.edu

[1] See http://scrc.gmu.edu/finding_aids/buchanan.html

 

Costs, Benefits, and "Boomerang Effects" in Defense Economics

|Peter Boettke|

On April 4, 1967, Martin Luther King delivered one of his most important speeches at the Riverside Church in New York -- "Beyond Vietnam: A Time to Break Silence."  The speech was delivered exactly 1 year prior to King's assassination, and while it was universally panned at the time by the mainstream media such as NYT and Washington Post, many of his close associates remember it as perhaps his best speech.

King spoke out courageously about the hypocrisy and moral bankruptcy of "the most powerful nation of the world speaking of aggression as it drops thousands of bombs on a poor, weak nation more than eight hundred, or rather, eight thousand miles away from its shores."  But while King was giving "voice to the voiceless in Vietnam", he was also concerned with the erosion of morality at among our troops and thus at home. "We are adding cynicism to the process of death, for they must know after a short period there that none of the things we claim to be fighting for are really involved. Before long they must know that their government has sent them into a struggle among Vietnamese, and the more sophisticated surely realize that we are on the side of the wealthy, and the secure, while we create a hell for the poor."  In short, the bombs we were dropping over there, were shattering communities over here.

My colleague Chris Coyne (along with Abby Hall) has developed the "boomerang effect" to explain how foreign interventionism results in a loss of domestic liberties.  They develop the thesis in their vitally important new book, Tyranny Comes Home.

I have a lot to say about this book.  But for this post, I just want to stress that Coyne and Hall's work in defense economics challenges not just the "defense brain", but the nature of the cost/benefit calculus that supposedly decision makers engage in when deciding to intervene abroad.  They should include in the calculation the full costs of the military action, and that includes also the costs associated with this boomerang effect.  Once we include the full costs in the decision calculus, the case for restraint becomes even stronger.  Just consider the current predicament over the past 17 years.

 

 On this day, as we remember the life of Martin Luther King, let's remember the power in his voice on this issue and both the social scientific analysis of boomerang effects and the the moral erosion of war.  Quoting the Buddhist leaders in Vietnam, King stated: 

Each day the war goes on the hatred increased in the hearts of the Vietnamese and in the hearts of those of humanitarian instinct. The Americans are forcing even their friends into becoming their enemies. It is curious that the Americans, who calculate so carefully on the possibilities of military victory, do not realize that in the process they are incurring deep psychological and political defeat. The image of America will never again be the image of revolution, freedom, and democracy, but the image of violence and militarism.

How true, how sad.

Just a click away

|Peter Boettke|

I have a strange relationship with technology.  I purchase a lot of gadgets, but I don't really know how to use them.  In fact, I probably use them more inappropriately than the average, and then I complain that they don't help me become more productive.  One of my former PhD students Dan D'Amico loved to make fun of me in these situations and just say "User Error".  Pete Leeson and Chris Coyne could give you quite a chuckle by telling you stories of my Palm Pilot with its portable keyboard. And Rosemary, my lovely wife, can certainly make you laugh with stories of my "Power Paragraphs" rather than Power Points.

I have multiple laptops, and e-readers, and I have a large library of iBooks, Kindle and Google Books, but I prefer physical books.  Starting a year ago, I began writing out my talks rather than preparing Power Points, and this year I am not even typing up those talks but writing them first out long-hand with a felt pen and pads of paper.  I write in books, I have post-it notes in books, slips of paper and notes that I take.  I have gone back to a technology I employed when I was 19 and first reading seriously, and I think I am better for it.  But others will ultimately be the judge of all that in how they perceive my talks and my papers that get published based on these academic scribbles.

But I remain in awe of technology, I just learned from my grad students about the income potential that some academic peddlers of lectures have realized on You Tube.  How did I miss that? Heck, I bet folks might have paid to watch me try to work with that Palm Pilot and keyboard with color commentary from Coyne and Leeson!  Still, this led me to clicking around the web earlier this week and low and behold I found amazing intellectual material. Not just current podcasts -- many of which I listen to faithfully already such as EconTalk -- but older shows that have now been uploaded, such as Bryan Magee's "Great Philosophers".  I know the web has numerous content, but I couldn't help thinking that the sort of ideas that I care about are under-represented in a serious way.  There are lots of talks and shows that touch on aspects, but we could do much better and especially in raising the intellectual bar.

Earlier this week I posted a conversation with Magee and Herbert Marcuse about the Frankfurt School of social theory.  It reminded me so much of endless conversations I had with Don Lavoie, Steve Horwitz and especially Dave Prychitko and it made me wish that we have more recordings of Don.  But there isn't enough content about Hayek or Buchanan or Ostrom; not enough content concerning Kirzner and Lachmman content is non-existent.

Still, just a click away and you can experience some of the best minds discuss fascinating ideas.  For example, watch this lecture from Paul Seabright on the second edition of his wonderful book, In the Company of Strangers.

 

 

When I was a teenager one of my favorite Rolling Stones songs was Gimme Shelter -- you know "War, children, it's just a shot away.. It's just a shot away ..War, children, it's just a shot away ..
It's just a shot away."  That song was a warning about the fragility of our human existence.  But the world of knowledge -- the best antidote to the madness of inhumanity -- is just a click away. And that is pretty amazing -- even with "User Error" I can benefit from that and do.

A Tale As Old As Time

|Peter Boettke|

The Epic of Gilgamesh is an ancient poem from Mesopotamia, and it tells the story of Gilgamesh, the King of Uruk.  In the story Uruk is well protected from external evaders and the city itself appears prosperous.  In many ways, Gilgamesh is a good King. But his all powerful status, also means that he isn't such a good King, for his abuses his power. He takes the sons of the citizens of Uruk and puts them to work as slave workers in the city, or sends them off to war, and he takes the citizens daughters to either work as servants, or to satisfy his desires. So the people of Uruk appeal to god to protect them from this tyrannical abuse of power.  So the gods send them Enkidu as a countervailing force to Gilgamesh's unchecked power.

The story dates from somewhere around 2100 BC and is regarded as one of the, if not the, oldest surviving works of literature.  And its story is about unchecked power, and the need for countervailing forces to keep power in check.

The Old Testament has a related story.

1 Samuel 8 New American Standard Bible (NASB)

Israel Demands a King

8 And it came about when Samuel was old that he appointed his sons judges over Israel. ² Now the name of his firstborn was Joel, and the name of his second, Abijah; they were judging in Beersheba. ³ His sons, however, did not walk in his ways, but turned aside after dishonest gain and took bribes and perverted justice.

⁴ Then all the elders of Israel gathered together and came to Samuel at Ramah;⁵ and they said to him, “Behold, you have grown old, and your sons do not walk in your ways. Now appoint a king for us to judge us like all the nations.” ⁶ But the thing was ^[a]displeasing in the sight of Samuel when they said, “Give us a king to judge us.” And Samuel prayed to the Lord. ⁷ The Lord said to Samuel, “Listen to the voice of the people in regard to all that they say to you, for they have not rejected you, but they have rejected Me from being king over them. ⁸ Like all the deeds which they have done since the day that I brought them up from Egypt even to this day—in that they have forsaken Me and served other gods—so they are doing to you also. ⁹ Now then, listen to their voice; however, you shall solemnly ^[b]warn them and tell them of the ^[c]procedure of the king who will reign over them.”

Warning concerning a King

¹⁰ So Samuel spoke all the words of the Lord to the people who had asked of him a king. ¹¹ He said, “This will be the ^[d]procedure of the king who will reign over you: he will take your sons and place them for himself in his chariots and among his horsemen and they will run before his chariots. ¹² He will appoint for himself commanders of thousands and of fifties, and some to ^[e]do his plowing and to reap his harvest and to make his weapons of war and equipment for his chariots. ¹³ He will also take your daughters for perfumers and cooks and bakers. ¹⁴ He will take the best of your fields and your vineyards and your olive groves and give them to his servants. ¹⁵ He will take a tenth of your seed and of your vineyards and give to his officers and to his servants. ¹⁶ He will also take your male servants and your female servants and your best young men and your donkeys and ^[f]use them for his work. ¹⁷ He will take a tenth of your flocks, and you yourselves will become his servants. ¹⁸ Then you will cry out in that day because of your king whom you have chosen for yourselves, but the Lord will not answer you in that day.”

¹⁹ Nevertheless, the people refused to listen to the voice of Samuel, and they said, “No, but there shall be a king over us, ²⁰ that we also may be like all the nations, that our king may judge us and go out before us and fight our battles.” ²¹ Now after Samuel had heard all the words of the people, he repeated them in the Lord’shearing. ²² The Lord said to Samuel, “Listen to their voice and ^[g]appoint them a king.” So Samuel said to the men of Israel, “Go every man to his city.”

So, we have ancient poems, and biblical narratives that warn us about the abuse of power by those place in positions of authority and privilege.  It is a tale as old as time.

And, it is a tale not lost on the great classical economists such as Adam Smith and David Hume, and of course it was a theme that ran throughout the modern political economy project of F. A. Hayek and James M. Buchanan.  Perhaps the Epic of Gilgamesh and the Old Testament should be required reading for all PhD students in economics prior to enrolling and studying the mechanics of microeconomics and macroeconomics so they can appreciate the tensions and paradoxes involved in the institutional infrastructure within which economic life is played out.