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Logic is a harsh mistress: welfare economics for economists

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  • Leeson, Peter T.

Abstract

Every economic explanation assumes maximization. How strange, then, that few economists accept one of maximization's most straightforward implications: every observed institution is efficient. My aim is to persuade economists of this fact and thus to dissuade them from making illogical claims about social welfare. To frame my argument, I consider the “property rights approach” to institutions developed by Yoram Barzel. I speculate that economists resist what maximization implies about institutional efficiency because they think that efficiency-always precludes them from improving the world, and hope of improving the world is what attracted them to economics in the first place. But, besides being inconsistent, resistance is unnecessary: efficiency-always does not preclude economists, or anyone else, from improving the world.

Suggested Citation

  • Leeson, Peter T., 2020. "Logic is a harsh mistress: welfare economics for economists," Journal of Institutional Economics, Cambridge University Press, vol. 16(2), pages 145-150, April.
    • Handle: RePEc:cup:jinsec:v:16:y:2020:i:2:p:145-150_3
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    References listed on IDEAS

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    1. Leeson, Peter T. & Boettke, Peter J. & Lemke, Jayme S., 2014. "Wife Sales," Review of Behavioral Economics, now publishers, vol. 1(4), pages 349-379, December.
    2. Leeson, Peter T., 2014. "Human Sacrifice," Review of Behavioral Economics, now publishers, vol. 1(1-2), pages 137-165, January.
    3. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    4. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-468, October.
    5. Leeson,Peter T., 2014. "Anarchy Unbound," Cambridge Books, Cambridge University Press, number 9781107629707, January.
    6. Allen, Douglas W., 2015. "On Hodgson on property rights," Journal of Institutional Economics, Cambridge University Press, vol. 11(4), pages 711-717, December.
    7. Peter T. Leeson, 2013. "Vermin Trials," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 811-836.
    8. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    9. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
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