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Interest Groups and the Impossibility of Democratic Socialism: Hayek, Jewkes, and the Arrow Theorem

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  • Makovi, Michael

Abstract

Andrei Shleifer and Robert W. Vishny (1994) have used Public Choice analysis to criticize market socialism. Peter J. Boettke (1995) and Peter T. Leeson and Boettke (2002) have argued that F. A. Hayek's Road to Serfdom (2007 [1944]) constituted a form of Public Choice analysis as well. Boettke and Leeson say that Hayek adumbrated a form of Arrow's Impossibility Theorem. This essay shows that Hayek was joined by John Jewkes in presaging a form of the Arrow theorem. In addition, this essay expands on the analysis by Boettke and Leeson, elucidating the broader implications which the Arrow theorem has for democratic socialism in particular. Democratic socialism is demonstrated to be impossible, in the sense that it cannot successfully accomplish the goals of its advocates. This is because the Arrow theorem implies that democratic political institutions are fundamentally incompatible with socialist economics.

Suggested Citation

  • Makovi, Michael, 2016. "Interest Groups and the Impossibility of Democratic Socialism: Hayek, Jewkes, and the Arrow Theorem," MPRA Paper 70173, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:70173
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    References listed on IDEAS

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    1. Farrant, Andrew & McPhail, Edward, 2009. "Hayek, Samuelson, and the logic of the mixed economy?," Journal of Economic Behavior & Organization, Elsevier, vol. 69(1), pages 5-16, January.
    2. John Jewkes, 1978. "A Return to Free Market Economics?," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-03542-7, July.
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    6. Makovi, Michael, 2016. "Labor Economics in a Planned Economy: F. A. Hayek and John Jewkes on the Impossibility of Democratic Socialism," MPRA Paper 70174, University Library of Munich, Germany.
    7. Ikeda, Sanford, 2003. "How Compatible Are Public Choice and Austrian Political Economy?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 16(1), pages 63-75, March.
    8. Hayek, F. A. & Caldwell, Bruce, 2007. "The Road to Serfdom," University of Chicago Press Economics Books, University of Chicago Press, number 9780226320540 edited by Caldwell, Bruce, Febrero.
    9. Makovi, Michael, 2016. "The Impossibility of Democratic Socialism: Two Conceptions of Democracy," MPRA Paper 70172, University Library of Munich, Germany.
    10. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
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    Cited by:

    1. Makovi, Michael, 2016. "Labor Economics in a Planned Economy: F. A. Hayek and John Jewkes on the Impossibility of Democratic Socialism," MPRA Paper 70174, University Library of Munich, Germany.
    2. Makovi, Michael, 2016. "The Impossibility of Democratic Socialism: Two Conceptions of Democracy," MPRA Paper 70172, University Library of Munich, Germany.
    3. Makovi, Michael, 2016. "The Freedom of the Prices: Hayek's Road to Serfdom Reassessed," MPRA Paper 72071, University Library of Munich, Germany.
    4. Makovi, Michael, 2016. "The Foreign Policy of a Democratic Socialist Regime: From Intervention to Protection to Warfare," MPRA Paper 70308, University Library of Munich, Germany.

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    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General
    • P50 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - General

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