A ordem das regras na economia e os limites do intervencionismo
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A Ordem das Regras na Economia e os Limites do Intervencionismo. Dr. Antony Mueller Professor de Economia, UCS antonymueller@yahoo.com. Laws vs. Rules. Laws in the sense of legal laws are made and imposed (e.g. military draft) Laws in science are held to be immutable

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A Ordem das Regras na Economia e os Limites do Intervencionismo

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A Ordem das Regras na Economia e os Limites do Intervencionismo

Dr. Antony Mueller

Professor de Economia, UCS


Laws vs. Rules

  • Laws in the sense of legal laws are made and imposed (e.g. military draft)

  • Laws in science are held to be immutable

  • Rules emerge spontaneously

  • Rules are evolutionary

  • Order of rules can be seen as a complex of unintended consequences of human action (result of human action but not of human design: money, language, trade, markets, the Internet)

Order vs. System

  • “System” in terms of its “structure” is conceived as static

  • Order is conceived as something that has emerged and is evolving

  • Order implies high degrees of freedom for its variables

  • Human action as the singular element of the economic order: perception, interaction, correction

Order vs. Organization

  • Organizations are based on command structures – hierarchical (including paternalistic)

  • Organizations have specific aims (e.g. profit for a company)

  • Order has no specific aim. Rules emerge and evolve for the benefit of the individual or the group (e.g. language, money)

  • Rules of organization are often explicit; rules of order mostly implicit (firm - market)

The concept of order in economic theory

  • Aristotle: cosmos and taxis

  • Saint Thomas: natural law – positive law

  • Quesnay: ordre positif – ordre naturel

  • Adam Smith: natural order (invisible hand)

  • Carl Menger: economic institutions as unintended and unplanned consequences of human action

  • Ludwig von Mises: regression theorem of the value of money

  • Friedrich Hayek: constitutional economics

  • Walter Eucken: theory of ordo-economics

Organizational view of economics

  • Mercantilists (treasury wealth)

  • Socialists (expropriation)

  • War economics (WWI, WWII, Cold War)

  • Modern Interventionists (social justice, market imperfections)

  • Stabilizers (modern macroeconomics)

  • Development Strategists (Myrdal, CEPAL)

Epistemological Aspects: Positivism old and new

  • Positivism (Auguste Comte: savoir pour prevoir et prevoir pour pouvoir)

  • Control theory (Paul Samuelson)

  • Economy as object of organization (Central planning – War Economics)

  • Control of human action (Behaviorism)

  • Economics as a (failed) predictive science

  • Limits of the economics of control (“Thinking men cannot be ruled”)

Epistemological Aspects: Complexity

  • Economic Phenomena as Complex Phenomena

  • Limits to prognosis (unstable relations)

  • Pattern predictions (QTM)

  • Explanation of the Principles (e.g. price ceilings)

  • Evolutionary Falsification (theory and history)

  • The economic problem as a co-ordination problem (no equilibrium)

  • Conceit of Knowledge (Hayek)

Types of economics

  • Situational economics (game theory, economic information theory, experimental economics, psychological economics)

  • Homo oeconomicus models

  • Market behavior models

  • Macroeconomics

  • Institutional Economics

  • Constitutional (or Ordo-) Economics (Hayek/Eucken)

Smith-Ricardo-Marx Tradition

  • Individual wealth – wealth of nations

  • Productivity – Division of Labor – Markets – Prices and Money (Smith)

  • “Classes” and “countries” as economic agents (Ricardo)

  • Objective Theory of Value

  • Development Laws (Marx/Malthus)

  • Supremacy of the State

Smith-Mill-Menger Tradition

  • Productivity – Division of Labor – Markets – Prices and Money (Smith)

  • Private Property (Mill)

  • Subjective (marginal) Valuation (Menger)

  • Economic Calculation (Mises)

  • Dispersion of Knowledge (Hayek)

Constitutive Principles

  • Abstract “Rule of Law”

  • Subsidiarity Principle

  • Definite Property Rights

  • Free Markets (limited regulation)

  • Strict Profit-Loss-Rules (economic calculation)

  • Transparency and Accountability (corporate and governmental governance)

  • Monetary Order (different from mere “price stability”)

  • Free money and banking (Hayek/Rothbard/White)

Regulative Principles

  • Constancy of economic policy

  • Unity of economic policy

  • Order criteria of intervention

  • Minimal Taxation

  • Limited Government Activity

  • Prudential Supervision of Competition

  • Incentive-oriented social security systems

Research Focus

  • Strong limited State vs. Weak unlimited Government

  • Evolutionary Order vs. Social Engineering

  • Pattern Prediction vs. Specific (quantitative) Prognosis

  • Explanation of the principle vs. Econometric Modeling

  • Complexity Models vs. Reductionist Models

  • Analysis in Categories of “Order” vs. “Systems-” and “Organization”-Categories

Conclusion: The Limits of Interventionism

  • Absence of the preconditions for effective intervention:

    • Knowledge Problem (economic knowledge as largely tacit, specific, dispersed, individual, subjective)

    • Prognosis Problem (lack of quantitative laws)

    • Control Problem (volitional freedom in human action)

    • Value Problem (subjective-individual vs. objective-collective)

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