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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.

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  • 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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    1. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    2. Allen, Douglas W., 2015. "On Hodgson on property rights," Journal of Institutional Economics, Cambridge University Press, vol. 11(4), pages 711-717, December.
    3. 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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    5. Leeson, Peter T., 2014. "Human Sacrifice," Review of Behavioral Economics, now publishers, vol. 1(1-2), pages 137-165, January.
    6. Stigler, George J, 1992. "Law or Economics?," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 455-468, October.
    7. Leeson,Peter T., 2014. "Anarchy Unbound," Cambridge Books, Cambridge University Press, number 9781107629707.
    8. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law and Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
    9. Peter T. Leeson, 2013. "Vermin Trials," Journal of Law and Economics, University of Chicago Press, vol. 56(3), pages 811-836.
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    Cited by:

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    4. Frolov, Daniil, 2019. "From institutions to extitutions to the post-institutional theory of institutional anomalies," MPRA Paper 95960, University Library of Munich, Germany, revised 10 Sep 2019.
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    6. Murphy, Ryan H., 2020. "Economics is whatever the comparative advantage of economists is: a comment on Leeson (2020)," Journal of Institutional Economics, Cambridge University Press, vol. 16(4), pages 553-556, August.
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    9. Harris,Colin & Cai,Meina & Murtazashvili,Ilia & Murtazashvili,Jennifer Brick, 2020. "The Origins and Consequences of Property Rights," Cambridge Books, Cambridge University Press, number 9781108969055.
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    14. Ilia Murtazashvili, 2023. "Does capitalism have a future? A review essay of Peter Boettke’s The Struggle for a Better World and Daniel Bromley’s Possessive Individualism: A Crisis of Capitalism," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 36(4), pages 589-604, December.
    15. Mark Koyama, 2020. "A review essay on The European Guilds," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 33(1), pages 277-287, March.
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