z1235, good points. I think where “whatever is, is efficient” becomes more than a tautology is in its deflationary power: if you believe your ideology is a more efficient alternative to what now exists, then it should already exist.
"bcylwutzht, you’re right to assert that I believe all social order is spontaneously-generated by rational individuals, insofar as it a self-organizing natural process.
However, I am not casting a normative judgment of “good” on such orders; rather, I am casting a descriptive light onto the circumstances (what exists is what exists because of individuals making efficient decisions)."
(1) rational behavior is efficient behavior
(2) social institutions are the result of rational behavior
(3) therefore, social institutions are efficient
Is this your argument?
Edit: Scratch all that. Please disregard. I’m going to reformulate my question.
If the government were as undesirable as you assert, than I would think there would be a social consensus of its heavy costs; you seem to think that only due to its might does it still reign, but if that were true, why are most preferences not aligned to your beliefs?
I agreed with this sentence at first, but now I’m not too sure. The way modern “people’s” governments are set up, there may be something psychologically baffeling and opaque about them to absolutley stimy most people’s assesment to make any form of actual cognitive assesment as to what is “good” and what is “not so good” to their needs.
I do not think one ought to look at what is “desirable” vs “non deseriable”, as people are schizophrenic, but rather something along the lines of how difficult is it to tell if an institution is providing “desirable” or “non desirable service” (is there a level of actual cognition to what is being said and done, and does the cognition matter) mixed with how easy it is for said intitution to be “self-serving” and getting away with it.
That said, I think you are right to point out that if the sh*t really hits the fan it does tend to show to some degree with the public. Even if people are non cognitive to what they actually want and what they say they want, one can tell there has been more civil unrrest in America this decade than the last decade (which was more stable and prosperous as a whole). There certainly are “indicators”, but once again spotting and deposing a King or overthrowing your city-states democratic legislation seems to be a bit of a different cognitive game (that is recogniton of one’s actual self interests) than concerning oneself with a statutory, bureaucratic EU or US Federal (or perhaps even state) people’s government.
"bcylwutzht, you’re right to assert that I believe all social order is spontaneously-generated by rational individuals, insofar as it a self-organizing natural process.
However, I am not casting a normative judgment of “good” on such orders; rather, I am casting a descriptive light onto the circumstances (what exists is what exists because of individuals making efficient decisions)."
For now, I’m leaving aside the idea of “efficiency”. I’ll turn to it next. First, I want to be clear on the following.
(1) individuals are rational
(2) therefore, individuals act to achieve ends
(edit: Indeed, for all intents and purposes, ALL individual action can be characterized as being rational…That is to say, whenever individual action is analyzed, it is fair to assume that the behavior is rational—in other words, that the behavior is a means to achieve some ultimate end, as subjectively determined by the acting individual.)
(3) social institutions are the result of individuals’ actions
(4) therefore, social institutions serve the ends of individuals
Temporarily leaving aside the idea of “efficiency”, is this a fair understanding of your argument?
this thread only reminds me that i should read more stigler. 
anyway, i think it is a very interesting idea. for a couple of reasons
first, it certainly seems like it serves as a good starting point for analyzing political change. for example, all the histories i’ve read of the french revolution (all 2 of them) have described the causes for the revolution in terms of the excesses of the monarchy. but, if you think about it, the royal family had always lived extravagant lifestyles at the expense of their subjects and they had not led to revolution before. what changed? i imagine stigler would argue that either the perceived costs of revolution fell or the perceived benefits of revolution increased such that keeping the monarchy was no longer efficient.
second, i think this does have implications for Austrian anarchists for exactly the reasons Strange Loop has outlined previously. though i am not sure why some posters are being so hostile towards that implication. although he is quoting the neoclassical stigler, he could just as well be quoting the austrian hayek–who also had a reverence for traditions and social institutions that had naturally “evolved” in a society and had persisted over time.
It’s still not more than a tautology, but don’t let that bother you. Tautologies can be revealing too (2+2=4). Whatever persists, is efficient, and whatever is purported to be efficient must necessarily first exist (and then persist). The proof of the pudding is in the eating. The proof of X’s “efficiency” is in its existence (persistence).
Seen this way, efficiency implies persistent existence and persistent existence implies efficiency. The tug of subjective valuations (likes, dislikes, and means expended toward various ends) of all market agents manifests itself as phenomena that exist (persist). Nazis existed but obviously were not “efficient” enough as they obviously didn’t persist (last long enough). To extend my previous analogy, those extreme farters were destroyed by the critical mass of others for whom the farter’s stench became too costly (“inefficient”) to bear.
Z.
I think the problem most people around here have, is that such arguments are used to justify states in all their forms. What in fact Stiglers argument is merely that the current state is seen as efficient. Monarchy also was persistent over really long time, longer than any form of democratic government but is also declining, for example in Students example. Similarily were many developments of society widespread for very long time but declining today or in the past.
Stiglers argument is important since with his definition of efficiency, the perceived benefits and costs are relevant. It means if we believe that statelessness brings “truly more” efficiency people have to be educated about the “true” costs and benefits of states. Maybe that would bring minarchy, anarchy or just strengthen the current state, I do not know. But Stiglers point sure is interesting and important.
Amen!
Yup. I still think it’s fascinating.
For real! During the course of this discussion, I went ahead and ordered Stigler’s The Intellectual and the Marketplace and The Economist as Preacher, and Other Essays.
Yup.
Exactly.
bcylwutzht, I don’t see any immediate problems with your point-by-point breakdown of my argument.
You ask people what they want. They tell you they want more medical supplies, better quality treatment, innovative progress in medicine and care, etc…
From the perspective of those who are advocating statist policies who also want the above, we are claiming that they are inefficient. Their statist policies cannot attain their goals, and economics can demonstrate that they wind up worse off then before. So we have a reference point or a bar to measure our efficiency.
Now, if you want to argue that there are other goals in mind, i.e., less medical supplies, worst treatment and care, etc… then nobody here will argue that the State is inefficient.
But you can’t say that the state if efficient from the perspective of those who want MORE and BETTER because that is the state of affairs. Otherwise, why are you even studying economics. It’s pointless.
shrug
I still find it trivial.
Would you be saying this in 1940?
What is long enough? I don’t disagree that this tautology can be helpful, but I do have a problem with using the word efficient. If an institution has existed for a long time, then we should give it the benefit of the doubt. We should be careful in analyzing it, thinking about the benefit it has provided and not just the costs we associate with it. But that does not mean we should exonerate it, merely for existing. Efficiency means something, and that is more than simply existing.
Michael J Green, I think you’re right to question how long does it take for an institution to be plausibly considered efficient. I don’t have a clear answer for that.
More than all else, I believe Stigler’s critique should give pause to all social reformers: if your alternative has not been acted upon, then perhaps you should not so easily dismiss current social practices. Essentially, Stigler’s logic should compel us to all be more Burkean.
I’ll drink to that.
“bcylwutzht, I don’t see any immediate problems with your point-by-point breakdown of my argument.”
Cool. Again, for reference, here’s my breakdown of your argument:
(1) individuals are rational
(2) therefore, individuals act to achieve ends
(edit: Indeed, for all intents and purposes, ALL individual action can be characterized as being rational…That is to say, whenever individual action is analyzed, it is fair to assume that the behavior is rational—in other words, that the behavior is a means to achieve some ultimate end, as subjectively determined by the acting individual.)
(3) social institutions are the result of individuals’ actions
(4) therefore, social institutions serve the ends of individuals
Now, the notion of efficiency vis-a-vis’ this argument is (simply) thus: “Efficient” describes the successful achievement of an individual’s desired end. Period. Any action, process, or institution which successfully brings about the achievement of an individual’s end is characterized as “efficient”. In other words, successful achievement of an individual’s desired end is the sufficient condition for characterizing an action, process, or institution as being “efficient”.
In other words, “efficient” refers NOT, as one might presume at first pass, to the ratio of resource inputs vs. resource outputs in the process of achievement. “Efficiency” refers NOT to a quantitative measure of HOW MUCH output was achieved, nor of how much output was achieved relative to how much input was utilized.
Do I understand correctly your conception of “efficiency”, as you are using it with respect to social institutions and their role in the achievement of individuals’ ends?
No, I think that’s incorrect. The ratio does matter. Let me offer a quote I presented earlier.
First, I want to emphasize that methodological naturalism is a foundation of my worldview, so I found this comment agreeable.
Second, I do consider Hoppe’s idea of a “natural order” to beg the question: if his theory is so natural, then why have natural processes produced such a radically different social order?
That is, I believe, the crux of the argument I am presenting; as opposed to Burke, Hayek, Oakeshott and other skeptics of human reason, libertarian anarchists believe they can rationally re-structure society into a better shape, in accordance with their vision. But, perhaps, individuals acting rationally (maximizing benefits, minimizing costs) within social processes have created an emergent order (public sector included) that possesses an efficiency we could not deliberately design.
Cool. To be clear, the output that you (and Stigler, I presume) refer to vis-a’-vis social institutions and the achievement of individuals’ ends is something along the lines of “psychological profit”? (i.e. Not necessarily material gain).