Capitalistic Competition as a Communicative Community - Why Politics Is Less “Deliberative” than Markets
AbstractDiscourse theorists such as Habermas tend to disregard the communicative character and discoursive power of market processes and at the same time overrate the ability of political deliberation to discover and implement social problem solutions. Mainstream economists have little to contribute to this debate since they regard both economic and political “markets” as simple instruments for the aggregation of given preferences. Hayek and other “Austrian” market process theorists, however, provide a rich theory that highlights the role of competition as a process of discovery, persuasion, experimentation and opinion formation. I use this analytical framework in order to show first that real market processes in many respects correspond to most ambitious claims of ideal deliberation such as “domination-free discourse” or “the unforced force of the better argument”. Next, I confront the deliberative ideal with predicaments of real political discourse, stressing opportunity costs (rational ignorance, shortage of attention, decision costs), asymmetric incompetence and the interventionist bias of political deliberation, and problems of “cheap talk” (preference falsification, opinion cascades, enclave deliberation). In order to make political discourse most effective within the limits described above, I argue in favour of privatisation, decentralisation and constitutionalisation as policy conclusions. I end with a summary comparison of economic and political competition as means to discover and disseminate local knowledge in society.
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Bibliographic InfoPaper provided by The Ratio Institute in its series Ratio Working Papers with number 49.
Length: 34 pages
Date of creation: 25 May 2004
Date of revision:
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discourse theory; market process theory; deliberative democracy; preference falsification; opinion formation; interventionism;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
- D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- P10 - Economic Systems - - Capitalist Systems - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-26 (All new papers)
- NEP-CDM-2004-05-26 (Collective Decision-Making)
- NEP-HPE-2004-05-26 (History & Philosophy of Economics)
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