One of the things that has frustrated me throughout my career as a political economist is the inability of people to incorporate into their thinking with respect to public policy some elementary principles of public choice.  We are so conditioned in the modern era to think in terms of ideal social planning schemes that even the most cynical of thinkers toward state-planning nevertheless commit the sin of pro-offering advice as if to a benevolent despot when advocating market-friendly programs

An omniscient, omnipotent, and benevolent social planner should never be invoked in discussions of public policy — even to figure out so-called “first best solutions” before proceeding to another round.  Institutions and the incentive structures and informational flows they provide can never be ignored in a proper economic analysis of the situation. To do so, is to commit the intellectual error that Friedman indicted Lerner with.  Those administrative costs must be part of the comparative institutional analysis from the start.  They are not footnotes, or afterthoughts, but a critical component to any economic analysis.

In my mind, this means efforts to assume away for sake of the analysis public choice issues in political decision making are intellectually illegitimate moves.  It doesn’t matter if we are talking about rent-controls, antitrust law, environmental regulations, trade legislation, fiscal policy, or monetary policy.  Robust political economy demands that from the first stage of analysis we confront the problems that the relaxation of the assumptions of omniscience, omnipotence and benevolence entail.  This is how we will strive to pursue the economic way of thinking persistently and consistently from our analysis of individual decision making to our understanding of the global economic system. ― Peter Boettke

Public Choice In A Nutshell

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