re: “Not if “persistent existence = efficiency” is viewed as a tautology, as mentioned before.”
From what I gather, you are referring to your own previous post:
Fine. So here’s your argument then.
(1) efficiency = persistence
(2) persistence
(3) therefore, efficiency
The logic is sound. But the truth of the premise cannot be granted. Like I said, persistence can occur for reasons OTHER THAN efficiency. This is true no matter how many times you repeat the assertion that persistence is synonymous with efficiency. Thus, your premise cannot stand, and neither therefore can your argument.
Hold on a minute, you say, there’s THIS: “Any persistent human institution (sex, marriage, private property, law, religion, government, respect, golden rule, etc.) must be “efficient” toward achieving some human actor’s ends.”
And of course this is true. SOME actors’ ends are achieved. Fine. All you’ve done is lower the bar for what constitutes “efficient”. This lower standard of efficiency is NOT in the same category of efficiency that StrangeLoop (and Mr. Stigler) is attemting to demonstrate. So, essentially, you’ve simply changed the subject.
Yes, X could persist to exist despite your subjective dislike of it, or despite your subjective belief that it is not “efficient” toward your ends. Yes, it could not persist to exist if all (or most) human actors shared your beliefs. And yet it does persist to exist which says something about where your beliefs are in relation to the realm of all human actors.
The only thing left to do, in this case, is to define “efficient”. StrangeLoop has specified that efficiency is to be understood as a measure of total inputs / total outputs. We know that the outputs in question consist of “psychic profit”, which may or may not include monetary gain. I see no reason to consider the inputs in question to be anything other than those considered in economics: land/labor/capital. Agree?
You’re oversimplifying the argument. You’re excluding the role of rational individuals who we assume are maximizing their benefits and minimizing their costs; that’s why persistence becomes crucial. This is, essentially, the same argument Austrians assume when they claim that economies, left alone, will become wealth-creating: individual agents will act self-interestedly and will minimize costs when doing so.
When you originally claimed that common law was a spontaneous order, you don’t think that such an adjudication process contradicts your current definitional limitations?
Before even Hayek and Mises, other thinkers were already considering the self-organizational properties of human communities, without such libertarian fault lines. Let me quote John Stuart Mill (who is comparing two philosophical camps, one of which represents thinking akin to Stigler), "To these stand opposed another kind of political reasoners, who are so far from assimilating a form of government to a machine, that they regard it as a sort of spontaneous product, and the science of government as a branch (so to speak) of natural history. According to them, forms of government are not a matter of choice. We must take them, in the main, as we find them. Governments cannot be constructed by premeditated design. They “are not made, but grow.” Our business with them, as with the other facts of the universe, is to acquaint ourselves with their natural properties, and adapt ourselves to them. The fundamental political institutions of a people are considered by this school as a sort of organic growth from the nature and life of that people: a product of their habits, instincts, and unconscious wants and desires, scarcely at all of their deliberate purposes. Their will has had no part in the matter but that of meeting the necessities of the moment by the contrivances of the moment, which contrivances, if in sufficient conformity to the national feelings and character, commonly last, and by successive aggregation constitute a polity, suited to the people who possess it, but which it would be vain to attempt to superduce upon any people whose nature and circumstances had not spontaneously evolved it.
[…]
They do not pretend that mankind have absolutely no range of choice as to the government they will live under, or that a consideration of the consequences which flow from different forms of polity is no element at all in deciding which of them should be preferred."
Same result. You just can’t get efficiency from persistence in 100% of cases—some, perhaps many cases of persistence will always be due to factors having nothing whatsoever to do with efficiency. But, perhaps we can move forward more readily by focusing elsewhere (see below).
Thanks. Common law seems to meet the criteria: unintended (i.e. built from the ground up, case by case); direct; individual.
"…if in sufficient conformity to the national feelings and character, commonly last…"
Here we can get closer to a definition of efficiency. This bolded statement seems to be your (and Stigler’s) definition of efficiency. Fair?
I don’t expect to convince people of what is “better” for them; I presume people are the ones most knowledgeable about their own interests.
If the costs of protectionist legislation are, according to libertarians, so abominable, then how come they’re so persistent? You can claim “education” is needed, but information is cheap, folks. For instance, people regularly consume cigarettes despite widespread efforts at “education”; I don’t care how many Truth commercials come out, an excise tax will more effectively shrink quantity demanded. Interest trumps mere words. If the benefit-cost calculations of rational individuals has made unlibertarian policies persistent, then perhaps your design plans are the ones that are foolhardy. To “educate” people about unrealized benefits of libertarianism would be redundant: if the benefits existed, people would have gravitated to those ends by now–just like Austrians claim about most other economic goods.
I already stated I don’t believe ideology makes people act against their own interests; rather, I believe ideologies are more often post-hoc rationalizations for self-interest (e.g., union egalitarianism is a front for higher wages and more benefits).
Rational ignorance is not problem unless normatively interpreted (information is still being sought and processed efficiently).
Collective action, if a problem (do Austrians believe so?) can’t be fully eradicated, and one could argue that governments are instantiated to remedy many of these sorts of problems.
And why should we care what you ‘believe’ if that’s contrary to what is logically necessary? ‘Own interests’ are not independent of people ideas, wishes and motivations. According to such a logic; no vegetarian would ever exist, because it often is more expensive. (Choose any other 'alternative lifestyle for which people endure certain costs.)
Well; it’s ‘rational’ for them to not seek to much information, because they can’t change the structure as such. It follows from that from their own individual point of view; it follows that a lot of action to change the world is costly and not effective. Yes, that’s true. But that’s just screwing up the concept of efficient mechanisms. The macro level is ‘efficient’ when it coordinates what people want. If a part of this macro-level is other people forcing decisions on others, than that part is not ‘efficient’ from all participants, even if they succumb to it. I know you have explained and explained that if people are robbed, it’s efficient, but that’s just saying: ‘whatever the fuck happens, we can call if efficient, because otherwise it wouldn’t happen’. You can do it: congratulations, you made the concept ‘efficiently’ completely irrelevant.
And of course: checking government is a collective action problem in and of itself and way harder than any other problem. (Empirical statement; not a priori true.)
Again: ‘let’s assume people don’t make mistakes, why do we have mistakes?’ People have mistaken believes about how the world works all the time; and make mistakes concerning costs and benefits and make mistakes concerning ‘everything’. Simply stating: well, everything is efficient, because otherwise it wouldn’t have been is just a (logical?) conclusion that follows from certain inapt concepts. Austrians should just ignore it - unless they can be explained in terms that really post a challenge (i.e. in Austrian terms). Than we can talk serious business. But I see no reason to accept this as any different as sheer nonsense. And I don’t mean this derogatory; I honestly don’t see the relevance of this idea expressed in these kinds of terms (‘well; everybody is rational and efficient in what they do’). I see a striking relevance with the perfect competition model. Assuming we have perfect competition, why don’t we have perfect competition?
Maybe I’ve missed a post - I obviously didn’t read through the whole thread - and I see that some people try to break down your ideas. And every one of those proves that you’re using holistic and irrelevant concepts for a analysis of the real world. But I’m perfectly willing to be challenged; but not in terms that are irrelevant in the world.
Again; the fundamental challenge: why isn’t this an example of ‘let’s assume people don’t make mistakes, why do they make mistakes?’ Why isn’t this an exposition of a real collective action problem that apparently hasn’t been solved so far? If saying ‘well, people making mistakes is efficient’, than that’s that. We can’t disprove government efficiency, because it’s efficient to make mistakes!
I don’t believe ideas are completely negligible, but I do consider them much less causally important than most (especially diehard ideologues, like libertarians or communists).
But, once again, I’ve never been convinced of vegetarianism; my assertion is that psychological temperaments (being more empathetic than others, perhaps) is more fundamental than the beliefs used to rationalize such dispositions.
Well; call what I called ‘ideology’ ‘psychological temperaments’ for all I care. The basic point is: people act upon ideas they have. And when these ideas from a personal point of view aren’t costly - ‘rational irrationality’ - they will have more of it. The democratic process works with these rational irrational ideas and produces the current government. Can you call that efficient? Well; according to some definitions it can. According to most standard definitions it isn’t.
‘We have a procedure that facilitates the enforcement of stupid ideas and that also facilitates the (wrong/stupid) idea that this procedure doesn’t have this problem and we can call it efficient, because it manages to reproduce the stupid ideas and doesn’t go away!’
Well; it is true: the democratic process is good in preserving itself. It’s efficient in thàt way. But from a macro point of view; if would be better if we had less of it.
You need to clarify your conception of efficiency.
Above, you’ve stated that efficiency is a measure of output relative to input. That is, a measure of psychic profit relative to input.
But, you also seem to be satisfied with Z’s conception (to use as a ready illustration) of persistence being the necessary condition for proof of efficiency. Indeed, the J.S. Mill quote you provide above reinforces this type of conception—to wit:
"…The fundamental political institutions of a people are considered by this school as a sort of organic growth from the nature and life of that people: a product of their habits, instincts, and unconscious wants and desires, scarcely at all of their deliberate purposes. Their will has had no part in the matter but that of meeting the necessities of the moment by the contrivances of the moment,which contrivances, if in sufficient conformity to the national feelings and character, commonly last*, and by successive aggregation constitute a polity, suited to the people who possess it, but which it would be vain to attempt to superduce upon any people whose nature and circumstances had not spontaneously evolved it.*…"
No, he’s saying that redistributionist measures like tariffs exist because they are, in fact, more efficient, as revealed by the fact that no coalition of rational individuals has yet succeeded in repealing the tariff. If it were more efficient for the tariff not to exist, then its repeal could be accomplished at a profit. The same reasoning can then be applied to the entire public sector to argue that no one has managed to find a way to organize a social order sans a State… if people really wanted such a social order, then it could exist (profitably for all involved). Since it doesn’t exist, we must conclude that - for reasons perhaps unknowable - that the statist order is, in fact, more efficient than a non-state order.
I absolutely agree with the view that - at least in the short term - there is a certain inevitability to the statist order. However, I strongly disagree that we cannot conclude that this or that change in the social order would result in a material improvement in human welfare. David Friedman likes to point out that the Western legal order is about 1000 years behind the state of the art in law because of the de facto prohibition of the use of performance bonds to create self-enforcing contracts. More strongly, I think it is possible to conclude that the statist order is, all in all, a detriment to human welfare and that all but a few of us would be a lot better off without it (in the long run) than we are with it. We can conclude this at least as strongly as we can conclude that human society is better off without chattel slavery than it was with it.
Well; and this can be explained by the standard public choice arguments - including, but not limited too, rational ignorance, irrationality, etc.
But what’s saying goes beyond: ‘well no, rational ignorance is efficient too!’ But that’s completely ignoring the fact that the democratic process fosters irrationality and ignorance. Saying that ‘ignorance is rational’ is one thing; saying that a process is efficient that fosters ignorance and irrationality, and basically incentivizes ignorance and irrationality, which keeps the process in place is however a whole different ball game.
Promoting ignorance and irrationality as a process can’t be called ‘efficient’; only in a way that really undermines the concept of ‘efficient’ imo.
With such a criteria; you can’t criticize anything and thus loses the concept it’s feature as a concept that can distinguish between things, i.e. make it irrelevant.
I’m really being serious: with a concept like this, you are assuming (imo) ‘no mistakes’. And than he asks: why are there mistakes? It doesn’t make sense to even ask the question in such a case!
As I said before, efficiency is an ex post judgment. That people can be said to aim to increase efficiency does not mean they were successful in doing so. That’s the whole endeavor of praxeology: to determine what means are successful in achieving given ends. That people may be constantly striving to increase efficiency does not mean they are constantly successful.
If we can agree to the above - that efficieny is the evaluation of the means in achieving ends - then you can understand the danger in speaking as broadly as you are. bcyclwutztht seems to be making this point now, but you cannot look at the whole and conclude that, since the whole prospers, each component of the whole must positively contribute to its success. The fact that one institution or practice exists (be it the federal government or merely its sugar tariff) does not mean it is efficient, as it may persist despite its inefficiency. You’re assuming causation away; if it exists/persists, then the cause must be its efficiency. In reality, there may be inefficiencies that are forgiven or overlooked.
Even knowing what you know today, would you have still said in 1970 that the Soviet Union was efficient and Mises was wrong? Or would you agree with Mises that a socialist government could survive for some time due to previously accumulated capital and money prices formed elsewhere in the world? That the sugar tariff, or the US federal government in general, has persisted does not mean it is efficient, as it may simply survive on the efficiency of the private market in the US.
P.S. When Stigler said the sugar tariff had met the test of time, the Soviet Union had only recently collapsed, but it had still existed longer than the 1938 sugar quota.
P.P.S. It’s interesting that Neoclassical continues to make this argument, given his earlier support for game theory and the problems of collective action. So is there or is there not market failure, StrangeLoop? After all, something efficient can’t be considered a failure, right?
