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Actions | Frith | I 99 Action/consciousness/Daniel Wegner/Frith: Thesis: we have no direct knowledge that we are the originators of our actions. >Knowledge, >Intentionality, >Intentions. I 100 E.g. There is a second test partner, who actually works with the experimental director, and who moves the mouse in a computer test almost in unison to you, but sometimes not, or with time delay. N.B.: then you will think you are the one who moves the mouse (or cursor). This is also true vice versa. I 102 Action/Frith: for example, a person on a treadmill should perform various responses to changes in the resistance or the speed increase, e.g. maintaining the energy, the tempo, etc. N.B.: the people changed their way of walking several seconds before they had noticed the change in the resistance of the treadmill! I 202 Originator/action/movement/foreign psychological/sovereignty/Frith: something that is as private as pain is the experience that we are the originators of our actions. >Authorship, >Libet experiment. Cause/effect/Frith: cause and effect are connected here to units, as, for exampe, color, form and movement are connected to form objects. Object/thing/Frith: thesis: the object arises from a combination of form, color and movement. I 252 Action/freedom/freedom of will/Frith: why does my brain make me feel like a free acting being? Thesis: it is beneficial for us to feel like free actors. Why this is the case, I can only answer very speculatively: I 253 It has to do with altruism. Altruism/Frith: altruism is one of the most difficult problems in evolutionary biology. J. B. S. Haldane: "I would sacrifice my life for two brothers or eight cousins." Def Dictator Game/Frith: e.g. a player gets a hundred dollars and can decide how much of it he/she gives to another player, which he/she does not know and of which he/she knows that this person will never meet him/her again. Most people give about $30. Def Ultimatum Game/Frith: here the other players can influence the result: if the one rejects the offer, both will leave with empty hands. If a player gives less than 30 dollars, he is usually punished by the other players. Thesis: we have a strong sense of fairness. >Fairness, >Ultimatum game. Def altruistic punishment/Frith: sometimes we even pay to punish someone else, e.g. free riders. With them we have no compassion. Our brain rewards us for the punishment of free riders. >Free rider. Def 2n level free rider/Frith: free riders are people who rely on others carrying out the punishment and never do it themselves. Freedom/freedom of will/Frith: freedom is a consequence of the fact that we are experiencing ourselves as free actors, that we also assume this of other people. >Intersubjectivity. Child: differs between intentional and unintentional action already at the age of three years. >Stages of development. |
Frith I Chris Frith Making up the Mind: How the Brain Creates Our Mental World, Hoboken/NJ 2007 German Edition: Wie unser Gehirn die Welt erschafft Heidelberg 2013 |
Consumption (Economics) | Economic Theories | Mause I 475f Consumption/Economic Theory: Consumption may appear as an individual act of buying. But consumption is actually a complex phenomenon of institutions, norms and actions (Haupt and Torp 2009) (1). Despite all the differences in detail, the interests and needs of consumers are also collective interests or group interests that can be distinguished from provider interests. Legislators can impose rules on companies to serve the interests of consumers. See consumer policy/economic theories. Asymmetry: the economic balance between supply and demand postulated in economic theory is not reflected in a political balance between suppliers and consumers. Although consumer interests are so important for the economic cycle, they are considered "weak interests". Reason: they are so general that everyone would benefit from a product improvement. This leads to the "free rider problem". (2) Free riders: People who do not contribute to the costs are not excluded from consumption in certain cases. >Social Goods (Public Goods). Consumer protection/consumer interests: this makes it so difficult to organise the interests of consumers as well as those of businesses.(3) >Neoclassical economics. 1. Haupt, Heinz-Gerhard, und Claudius Torp, Die Konsumgesellschaft in Deutschland 1890– 1990. Ein Handbuch. Frankfurt a. M. 2009. 2. Mancur Olson, The logic of collective action. Public goods and the theory of groups. Cambridge 2003. 3.Bernd Stauss, Verbraucherinteressen. Gegenstand, Legitimation und Organisation. Stuttgart 1980. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Contracts | Buchanan | Brocker I 568 Contracts/Constitution/Buchanan: Buchanan distinguishes between pre-constitutional and post-constitutional contracts: First of all, concluding a contract leads to a temporary stabilisation of natural inequality or to cost reduction through "disarmament" on all sides. (See Inequality/Buchanan, Law/Buchanan). Since this situation still tends to be unstable, the state is needed as guarantor of order or as an arbitrator. Post-Constitutional Contract: establishes a constitutional framework for a society that knows public goods as well as private ones. Unlike private goods, public goods are not divisible. Public goods: here there is the free rider problem: because of their publicity, the goods can also be used by those who do not pay for them. (See Social Goods). Wolfgang Kersting, „James M. Buchanan, Die Grenzen der Freiheit“ in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
EconBuchan I James M. Buchanan Politics as Public Choice Carmel, IN 2000 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 |
Democracy | Schumpeter | Brocker I 260 Democracy/Schumpeter: For Schumpeter, the defining feature of democracy consists in placing a "competition for political leadership" (1) at the centre of attention. The core idea is: similar to the way companies compete for the favour of consumers, Brocker I 261 politicians and parties are in competition for the favour of voters (2) - with the important difference that people are usually well informed in economic matters, but usually rationally ignorant in political matters (3). What both systems have in common is the striving for one's own individual advantage. Thesis: Modern democracy is a product of the capitalist process (4); however, two important prerequisites for the functioning of democracy in contemporary capitalism are no longer fulfilled: a) the ideal of the economical state (5) b) the basic social consensus.(6) Because of the expectation of large parts of the electorate to live at the expense of the state.(7) >Free riders, >State, >Economy, >Society. 1. Joseph A. Schumpeter, Capitalism, Socialism and Democracy, New York 1942. Dt.: Joseph A. Schumpeter, Kapitalismus, Sozialismus und Demokratie, Tübingen/Basel 2005 (zuerst: Bern 1946), p. 427. 2. Ibid p. 427-433 3. Ibid p. 407 – 420. 4. Ibid p. 471. 5. Ibid p.. 471f. 6. Ibid p. 473. 7. Ibid p. 472. Ingo Pies, „Joseph A. Schumpeter, Kapitalismus, Sozialismus und Demokratie (1942)“ in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018. Gaus I 148 Democracy/Schumpeter/Dryzek: The model of democracy most popular among comparative politics scholars, especially those in the burgeoning field of democratic transition and consolidation, expects far less from democracy than do the deliberative democrats. >Deliberative democracy This model is essentially that proposed long ago by Schumpeter (1942)(1): democracy is no more than competition among elites for popular approval that confers the right to rule. In the 1950s this idea became the foundation for 'empirical' theories of democracy happy with the generally apathetic role of the ignorant and potentially authoritarian masses (Berelson, 1952(2); Sartori, 1962(3)). Competition models of democracy: Such competitive elitist models have Gaus I 149 long been discredited among democratic theorists - not least those such as Dahl (1989)(4) who had earlier believed in them as both accurate descriptions of United States politics and desirable states of affairs. Yet they live on among transitologists and consolidologists, who see the hallmark of a consolidated democracy as a set of well-behaved parties representing material interests engaged in electoral competition regulated by constitutional rules (see, for example, Di Palma, 1990(5); Huntington, 1991(6); Mueller, 1996(7); Schedler, 1998(8)). The deliberative democrat's concern with authenticity is nowhere to be seen. Active citizens play no role in such models. 1. Schumpeter, Joseph A. (1942) Capitalism, Socialism, and Democracy. New York: Harper. 2. Berelson, Bernard (1952) 'Democratic theory and public opinion'. Public Opinion Quarterly, 16: 313—30. 3. Sartori, Giovanni (1962) Democratic Theory. Detroit: Wayne State Umversity Press. 4. Dahl, Robert A. (1989) Democracy and its Critics. New Haven, CT: Yale University Press. 5. Di Palma, Giuseppe (1990) To Craft Democracies. Berkeley, CA: University of California Press. 6. Huntington, Samuel (1991) The Third Wave. Norman, OK: University of Oklahoma Press. 7. Mueller, John (1996) 'Democracy, capitalism and the end of transition'. In Michael Mandelbaum, ed. Postcommunism: Four Perspectives. New York: Council on Foreign Relations. 8. Schedler, A. (1998) 'What is democratic consolidation?' Journal of Democracy, 9: 91-107. Dryzek, John S. 2004. „Democratic Political Theory“. In: Gaus, Gerald F. & Kukathas, Chandran 2004. Handbook of Political Theory. SAGE Publications |
EconSchum I Joseph A. Schumpeter The Theory of Economic Development An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle, Cambridge/MA 1934 German Edition: Theorie der wirtschaftlichen Entwicklung Leipzig 1912 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 Gaus I Gerald F. Gaus Chandran Kukathas Handbook of Political Theory London 2004 |
Economic Growth | Rothbard | Rothbard III 962 Economic Growth/Rothbard: The discussion is replete with comparisons of the higher rate of country X which "we" must hurriedly counter, etc. Amidst all the interest in growth, there are many grave problems (…) First and foremost is the simple query: "What is so good about growth?" Problem: The economists, discoursing scientifically about growth, have illegitimately smuggled an ethical judgment into their science - an ethical judgment that remains unanalyzed, as if it were self-evident. Ethics/justification/values: But why should growth be the highest value for which we can strive? What is the ethical justification? There is no doubt about the fact that growth, taken over as another dubious metaphor from biology, "sounds" good to most people, but this hardly constitutes an adequate ethical analysis. Free market/Rothbard: Many things are considered as good, but on the free market every man must choose between different quantities of them and the price for those forgone. Similarly, growth, (…) must be balanced and weighed against competing values. Given due consideration, growth would be considered by few people as the only absolute value. If it were, why stop at 5 percent or 8 percent growth per year? Why not 50 percent? Economics: It is completely illegitimate for the economist qua economist simply to endorse growth. What he can do is to contrast what growth means in various social conditions. In a free market, for example, every person chooses how much future growth he wants as compared to present consumption. Living standard: "Growth," i.e., a rise in future living standards, can be achieved (…) only in a few definable ways. Growth/Rothbard: Either more and better resources can be found, or more and better people can be born, or technology improved, or the capital goods structure must be lengthened and capital multiplied. Rothbard III 963 Saving/investment: In practice, since resources need capital to find and develop them, since technological improvement can be applied to production only via capital investment, since entrepreneurial skills act only through investments, and since an increased labor supply is relatively independent of short-run economic considerations and can backfire in Malthusian fashion by Iowering per capita output, the only viable way to growth is through increased saving and investment. Free market/decisions: On the free market, each individual decides how much he wants to save - to increase his future living standards - as against how much he wants to consume in the present. The net resultant of all these voluntary individual decisions is the nation's or world's rate of capital investment. The total is a reflection of the voluntary, free decisions of every consumer, of every person. Economics: The economist, therefore, has no business endorsing "growth" as an end; if he does so, he is injecting an unscientific, arbitrary value judgment, especially if he does not present an ethical theory in justification. Rothbard III 964 Coercion/saving: (…) in cases of coerced saving the saver reaps none of the benefit of his sacrifice, which is instead reaped by government offcials or other beneficiaries. Free market: This contrasts to the free market, where people save and invest precisely because they will reap some tangible and desired rewards. Free rider/coercion: In a regime of coerced growth, then, "society" cannot grow, and conditions are totally different from those of the free market. Indeed, what we have is a form of the "free rider" argument against the free market and for government; here the various "free riders" band together to force other People to be thrifty so that the former can benefit. >Free rider. Def Economic growth/Rothbard: Any proper definition must surely encompass an increase of economic means available for the satisfaction of people's ends - in short, increased satisfactions of people's wants, or as P.T. Bauer has put it, "an increase in the range of effective alternatives open to people." On such a definition, it is Clear that compulsory saving, with its imposed losses and restrictions on people's effective choices, cannot spur economic growth; and also that government "investment," With its neglect of voluntary private consumption as its goal, can hardly be said to add to people's alternatives. Quite the contrary.(1) Rothbard: Finally, the very term "growth" is an illegitimate import of a metaphor from biology into human action.(2) "Growth" and "rate of growth" connote some sort of automatic necessity or inevitability and have for many People a value-loaded connotation of something self-evidently desirable.(3) 1. P.T. Bauer, Economic Analysis and Policy in Underdeveloped Countries (Durham, N.C.: Duke University Press, 1957), pp. 113 ff. On Soviet economic growth Bauer and Yamey make this salutary comment: „The meaning of national income, industrial output and capital formation is also debatable in an economy when so large a part of output is not governed by consumers' choices in the market; the diffculties of interpretation are particularly obvious in connection With the huge capital expenditure undertaken by government without reference to the valuation of output by consumers.“ (Bauer and Yamey, Economics of Under-Developed Countries, p. 162). Also see Friedman, "Foreign Economic Aid," p. 510. 2. For a critique of various metaphors illegitimately and misleadingly imported from the natural sciences into economics, see Rothbard, "The Mantle of Science." 3. The presumably excessive growth of cancerous cells, for example, is generally overlooked. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
Environment | Economic Theories | Mause I 408 Environment/Economic Theories: from an economic and political science perspective, environmental goods have structural characteristics that include scarcity and characteristics of social goods (e.g. free rider problem). These structural features serve as a basis for the economic justification of state environmental policy. Problem: if environmental goods are to be managed via the market, this requires a) the existence of individual preferences for these goods and b) a functioning price mechanism in advance if a "market failure" is not to occur. Endress 2000, p. 16f. (1) >Emission permits, >Emission reduction credits, >Emission targets, >Emissions, >Emissions trading, >Climate change, >Climate damage, >Energy policy, >Clean Energy Standards, >Climate data, >Climate history, >Climate justice, >Climate periods, >Climate targets, >Climate impact research, >Carbon price, >Carbon price coordination, >Carbon price strategies, >Carbon tax, >Carbon tax strategies. 1. Alfred Endress, Umweltökonomie, Stuttgart 2000. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Environmental Policy | Economic Theories | Mause I 404/405 Environmental policy/Economic Theory: from the point of view of economic theory, a central regulation is only desirable in the case of spatially homogeneous environmental protection preferences, cross-border damage effects (regional spillover effects) or implementation-related cost degression effects. (1) Apart from that, a more regional structure is to be welcomed, as it not only offers the possibility of better implementation of the subsidiarity principle in the national distribution of competences (Döring and Voigt 2006, p. 206 (2)), but also the chance of increased federal competition in the field of environmental protection (Mammen 2007, p. 125 (3); Koch and Krohn 2006 (4). Vs: a fragmentation of environmental legislation could lead to a "race to the bottom" with a multitude of environmental standards (Benz et al. 2008 (5); Ingerowski 2006 (6)). Market forces can do little to mitigate environmental damage. >Environmental goods/Economic theories). The reason is the free rider problem. >Prisoner's Dilemma/Ostrom. Free riders: For example, if the installation of a catalytic converter costs 1,00.00 Euros and the individual benefit from clean air is evaluated at the same time at 1,500.00 Euros, then it is rational for the individual not to install the catalytic converter. This even applies if everyone else dispenses with installation. For society as a whole, this leads to the worst result. Therefore, in most cases, the state must intervene to contain environmental damage. (Nordhaus 1993, p. 18) (7), Hartwig 1992, p. 132) (8). >Externalities. Cf. >Emission permits, >Emission reduction credits, >Emission targets, >Emissions, >Emissions trading, >Climate change, >Climate damage, >Energy policy, >Clean Energy Standards, >Climate data, >Climate history, >Climate justice, >Climate periods, >Climate targets, >Climate impact research, >Carbon price, >Carbon price coordination, >Carbon price strategies, >Carbon tax, >Carbon tax strategies. 1. Klaus W. Zimmermann & Walter Kahlenborn, Umweltföderalismus. Einheit und Einheitlichkeit in Deutschland und Europa. Berlin 1994. 2.Thomas Döring & Stefan Voigt. 2006. Reforming federalism German style. Intereconomics 41: 201– 208. 3. Lars Mammen. 2007. Der neue Typus der konkurrierenden Gesetzgebung mit Abweichungsrecht. Die öffentliche Verwaltung 9: 376– 379. 4. Hans-Joachim Koch, &Susan Krohn. 2006. Umwelt in schlechter Verfassung? Der Umweltschutz nach der Föderalismusreform. Natur und Recht 28: 673– 680. https://link.springer.com/ article/10.1007%2Fs10357-006-1144-3 5. Arthur Benz, Arthur, Hans-Joachim Koch, André Suck & Anna Fizek, Verwaltungshandeln im Naturschutz: Herausforderungen und Folgen veränderter Rahmenbedingungen. Münster 2008.. 6. Jan B. Ingerowski, J2006. Die Föderalismusreform: Chance auf ein stringentes, an den aktuellen Herausforderungen des Umweltschutzes orientiertes Umweltrecht vertan. KGV-Rundbrief 3 + 4/ 2006. 7. William D. Nordhaus. 1993. Reflections on the economics of climate change. The Journal of Economic Perspectives 7: 11– 25. 8. Karl-Hans Hartwig, Umweltökonomie. In Vahlens Kompendium der Wirtschaftstheorie und Wirtschaftspolitik, Hrsg. Dieter Bender, Hartmut Berg, Dieter Cassel, Günter Gabisch, Karl-Hans Hartwig, Lothar Hübl, Dietmar Kath, Rolf Peffekoven, Jürgen Siebke, H. Jörg Thieme und Manfred Willms, Bd. 2, 5. Aufl., 122– 162. München 1992. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Ethics | Hume | Stegmüller IV 167 Ethics/Hume: thesis: no feature can be seen in the actions themselves, which would make it possible to distinguish whether they are justified or not. >Actions. Cf. >Ethics/Harman. Stegmüller: but one can even find prescriptive passages in Hume. IV 243 Ethics/morality/Hume: thesis: 1. Facing scarce resources, people must cooperate in order to survive. >Life. 2. HumeVsHobbes: all humans own sympathy - would everything be available in abundance, of course, respect to other people's property would be superfluous. >Sympathy/Hume, >Sympathy.- IV 245 The key driving force is self-interest. IV 247 Ethics/morality/Hume: e.g. the two rowers: 1. Pure coordination problem. 2. No one wants to make an effort. Stabilization of cooperation: 1. only artificial virtue is assumed, 2. there is no verbal communication and 3. only rational egoism. E.g. help at the harvest: the first helps the other. Then then there is a time lag: the second does not help the other -> free riders problem -> sanctions. IV 283 Reason/morals/ethics/Hume/Stegmüller: reason can never be the motive for or against an action. >Reason/Hume, >Actions, >Reasons. Passions and preferences are logically independent of conclusions. Yet, there are practical-rational preferences. Mackie: also dispassion does not allow a clear view on things. >Ethics/Mackie. --- Stuhlmann I 64 Ethics/Hume: at its reason moral statements are always required. >Morals. |
D. Hume I Gilles Delueze David Hume, Frankfurt 1997 (Frankreich 1953,1988) II Norbert Hoerster Hume: Existenz und Eigenschaften Gottes aus Speck(Hg) Grundprobleme der großen Philosophen der Neuzeit I Göttingen, 1997 Carnap V W. Stegmüller Rudolf Carnap und der Wiener Kreis In Hauptströmungen der Gegenwartsphilosophie Bd I, München 1987 St I W. Stegmüller Hauptströmungen der Gegenwartsphilosophie Bd I Stuttgart 1989 St II W. Stegmüller Hauptströmungen der Gegenwartsphilosophie Bd 2 Stuttgart 1987 St III W. Stegmüller Hauptströmungen der Gegenwartsphilosophie Bd 3 Stuttgart 1987 St IV W. Stegmüller Hauptströmungen der Gegenwartsphilosophie Bd 4 Stuttgart 1989 |
External Economies | Rothbard | Rothbard III 1038 External Economies/Rothbard: An important case of external benefits is "external economies," which could be reaped by investment in certain industries, but which would not accrue as profit to the entrepreneurs. >External benefit/Rothbard. There is no need to dwell on the lengthy discussion in the literature on the actual range of such external economies, although they are apparently negligible. Protective tariff/Pigou: The suggestion has been persistently advanced that the government subsidize these investments so that "society" can reap the external economies. Such is the Pigou argument for subsidizing external economies, as well as the old and still dominant "infant industries" argument for a protective tariff. Free market/RothbardVsPigou: The call for state subsidization of external economy investments amounts to a third line of attack on the free market, i.e., that B, the potential beneficiaries, beforced to subsidize the benefactors A, so that the latter will produce theformer's benefits. For the first and second attac see Free market/economic theories. This (…) line is the favorite argument of economists for such proposals as government-aided dams or reclamations (recipients taxed to pay for their benefits) or compulsory schooling (the taxpayers will eventually benefit from others' education), etc. The recipients are again bearing the onus of the policy; but here they are not criticized for free riding. They are now being "saved" from a situation in which they would not have obtained certain benefits. RothbardVs: Since they would not have paid for them, it is diffcult to understand exactly what they are being saved from. Costs: The third line of attack therefore agrees with the first that the free market does not, because of human selfishness, produce enough external-economy actions; but it joins the second line of attack in placing the cost of remedying the situation on the strangely unwilling recipients. Coercion: If this subsidy takes place, it is obvious that the recipients are no longer free riders: indeed, they are simply being coerced into buying benefits for which, acting by free choice, they would not have paid. Rothbard III 1039 RothbardVs: The absurdity of the third approach may be revealed by pondering the question: Who benefits from the suggested policy? The benefactor A receives a subsidy, it is true. But it is often doubtful if he benefits, since he would otherwise have acted and invested profitably in some other direction. The state has simply compensated him for losses which he would have received and has adjusted the proceeds so that he receives the equivalent of an opportunity forgone. Therefore A, if a business firm, does not benefit. As for the recipients, they are being forced by the state to pay for benefits that they otherwise would not have purchased. How can we say that they "benefit"? A standard reply is that the recipients "could not" have obtained the benefit even if they had wanted to buy it voluntarily. Secondly, there is no reason Why the prospective recipients could not have bought the benefit. In all cases a benefit produced can be sold on the market and earn its value product to consumers. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
Free Market | Economic Theories | Rothbard III 912 Free market/economic theories/Rothbard: There are many economists who regard the "free market" as only being free of triangular interference; such binary interference as taxation is not considered intervention in the purity of the "free market." For triangular interventions see >Price control/Rothbard, >Interventions/Rothbard. Chicago school/Knight/Rothbard: The economists of the Chicago School - headed by Frank H. Knight -- have been particularly adept at splitting man's economic activity and confining the "market" to a narrow compass. They can thus favor the "free market" (because they oppose such triangular interventions as price control), while advocating drastic binary interventions in taxes and subsidies to "redistribute" the income determined by that market. >Distribution/Rothbard, >Frank H. Knight, >Chicago School. RothbardVsChicago School: In short, the market is to be left "free" in one sphere, while being subject to perpetual harassment and reshuffling by outside coercion. This concept assumes that man is fragmented, that the "market man" is not concerned with what happens to himself as a "subject-to-government" man. Def Tax illusion/Rothbard: This is surely an impermissible myth, which we might call the "tax illusion" - the idea that people do not consider what they earn after taxes, but only before taxes. In short, if A earns $ 9,000 a year on the market, B $ 5,000, and C $ 1,000, and the government decides to keep redistributing the incomes so that each earns $ 5,000, the individuals, apprised of this, are not going to keep foolishly assuming that they are still earning what they did before. They are going to take the taxes and subsidies into account. >Government spending/Rothbard. Rothbard III 1035 Free market/Economic theories/Rothbard: There are two general lines of attack on the free market, using external benefits as the point of criticism. Taken together, these arguments against the market and for governmental intervention or enterprise cancel each other out, but each must, in all fairness, be examined separately. 1) The first type of criticism is to attack A for not doing enoughfor B. The benefactor is, in effect, denounced for taking his own selfish interests exclusively into account, and thereby neglecting the potential indirect recipient waiting silently in the wings.(1) 2) The second line of attack is to denounce B for accepting a benefit without payingA in return. The recipient is denounced as an ingrate and a virtual thief for accepting the free gift. The free market, then, is accused of injustice and distortion by both groups of attackers: a) the first believes that the selfishness of man is such that A will not act enough in ways to benefit B; b) the second that B will receive too much "unearned increment" without paying for it. Rothbard: Either way, the call is for remedial state action; on the one hand, to use violence in order to force or induce A to act more in ways which will aid B; on the other, to force B to pay A for his gift. Ethics/economics/Rothbard: Generally, these ethical views are clothed in the "scientific" opinion that, in these cases, free-market action is no longer optimal, but should be brought back into optimality by corrective State action. Such a view completely misconceives the way in which economic science asserts that free-market action is ever optimal. Rothbard III 1036 RothbardVsInterventions: It is optimal, not from the standpoint of the personal ethical views of an economist, but from the standpoint of the free, voluntary actions of all participants and in satisfying the freely expressed needs of the consumers. Government interference, therefore, will necessarily and always move away from such an optimum. Rothbard: It is amusing that while each line of attack is quite widespread, each can be rather successfully rebutted by using the essence of the other attack! RothbardVs 1): Take, for example, the first - the attack on the benefactor. To denounce the benefactor and implicitly call for state punishment for insuffcient good deeds is to advance a moral claim by the recipient upon the benefactor. We do not intend to argue ultimate values (…). But it should be clearly understood that to adopt this position is to say that B is entitled peremptorily to call on A to do something to benefit him, and for which B does not pay anything in return. We do not have to go all the way with the second line of attack (on the "free rider"), but we can say perhaps that it is presumptuous of the free rider to assert his right to a post of majesty and command. For what the first line of attack asserts is the moral right of B to exact gifts from A, by force if necessary. >Free rider. RothbardVs 2): The second line of attack is of the opposite form - a denunciation of the recipient of the "gift." The recipient is denounced as a "free rider," as a man who wickedly enjoys the "unearned increment" of the productive actions of others. This, too, is a curious line of attack. It is an argument which has cogency only when directed against the first line of attack, i.e., against the free rider Who wants compulsoryfree rides. But here we have a situation where A's actions, taken purely because they benefit himself, also have the happy effect of benefiting someone else. Are we to be indignant because happiness is being diffused throughout society? Are we to be critical because more than one person benefits from someone's actions? Free rider: After all, the free rider did not ask for his ride. He received it, unasked, as a boon because A benefits from his own action. To adopt the second line of attack is to call in the gendarmes to apply punishment because too many People in the society are happy. In short, am I to be taxed for enjoying the view of my neighbor's well-kept garden? Rothbard III 1037 Georgism/Henry George: One striking instance of this second line of attack is the nub of the Henry Georgist position: an attack on the "unearned increment" derived from a rise in the capital values of ground land. The argument of the Georgists is that the landowner is not morally responsible for this rise, which comes about from events external to his landholding; yet he reaps the benefit. The landowner is therefore a free rider, and his "unearned increment" rightfully belongs to "society." Setting aside the problem of the reality of society and whether "it" can own anything, we have here a moral attack on a free-rider situation. >Henry George, >Georgism/Rothbard. RothbardVs: The diffculty with this argument is that it proves far too much. For which one of us would earn anything like our present real income were it not for external benefits that we derive from the actions of others? Specifically, the great modern accumulation of capital goods is an inheritance from all the net savings of our ancestors. Without them, we would, regardless of the quality of our own moral character, be living in a primitive jungle. 1. For some unexplained reason, the benefits worried over are only the indirect ones, where B benefits inadvertently from A's action. Direct gifts, or charity, where A simply donates money to B, are not attacked under the category of external benefit. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
Generational Justice | Rothbard | Rothbard III 499 Generational justice/Rothbard: (…) another (…) attack is the common one that the free market wastes resources, especially depletable resources. Future generations are allegedly robbed by the greed of the present. Such reasoning would lead to the paradoxical conclusion that none of the resource be consumed at all. For whenever, at any time, a man consumes a depletable resource (here we use “consumes” in a broader sense to include “uses up” in production), he is leaving less of a stock for himself or his descendants to draw upon. It is a fact of life that whenever any amount of a depletable resource is used up, less is left for the future, and therefore any such consumption could just as well be called “robbery of the future,” if one chooses to define robbery in such unusual terms.(1) Rothbard III 1037 Generational justice/Rothbard: The diffculty with this argument is that it proves far too much. For which one of us would earn anything like our present real income were it not for external benefits that we derive from the actions of others? >External benefit/Rothbard. Capital goods: Specifically, the great modern accumulation of capital goods is an inheritance from all the net savings of our ancestors. Without them, we would, regardless of the quality of our own moral character, be living in a primitive jungle. The inheritance of money capital from our ancestors is, of course, simply inheritance of shares in this capital structure. >Capital structure/Rothbard. Free rider: We are all, therefore, free riders on the past. We are also free riders on the present, because we benefit from the continuing investment of our fellow men and from their specialized skills on the market. Wages: Certainly the vast bulk of our wages, if they could be so imputed, would be due to this heritage on which we are free riders. Land: The landowner has no more of an unearned increment than any one of us. Taxation: Are all ofus to suffer confiscation, therefore, and to be taxed for our happiness? And who then is to receive the loot? Our dead ancestors, who were our benefactors in investing the capital?(2) 1. Unusual terms because robbery has been distinctively defined as seizure of someone else's property without his consent, not the use of one's own property. 2. There is justice as well as bluntness in Benjamin Tucker's criticism: "What gives value to land?" asks Rev. Hugh O. Pentecost [a Georgist]. And he answers: "The presence ofpopulation - the community. Then rent, or the value ofland, morally belongs to the community." What gives value to Mr. Pentecost's preaching? The presence of population - the community. Then Mr. Pentecost's salary, or the value of his preaching, morally belongs to the community. (B. Tucker, Instead of a Book. 2nd ed. New York: B.R. Tucker, 1897. Reprinted by Haskell House Publishers, 1969. p. 357) |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
Government Spending | Economic Theories | Mause I 276/277 Government Expenditure/Economic theories: Problems in determining optimal government spending arise in connection with public goods. Their value can hardly be determined, since there are an indefinite number of individuals who do not contribute to the costs (free rider problem). See Public Goods, especially Public Goods/Samuelson. For newer solutions Frey and Stutzer.(1) 1.Bruno S. Frey & Alois Stutzer. 2011. The use of happiness research for public policy. Social Choice and Welfare 38 (4): 659– 674. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Insurances | Barr | Gaus I 212 Insurance/welfare state/adverse selection/moral hazard/Barr/Moon: [in a welfare state] voluntary welfare provision may (...) be unable to cover everyone in a society. Many people in the heyday of mutual aid societies were not members, and non-members were often among the least advantaged, those without steady jobs and a secure place within the community. Adverse selection: organizations offering protection recognize that those most likely to need protection have Gaus I 213 the greatest incentive to seek it, and so to join a mutual aid society or to purchase insurance, while those facing the lowest risks have an incentive to stay out. As a result of this process of 'adverse selection' , risks tend to be spread over a smaller and smaller part of the population, and premiums must rise accordingly. This process of adverse selection can continue to the point where most of those in need of protection are unable to afford it, because premiums have to rise so high that all but the most vulnerable drop out. The welfare state can combat the problem of adverse selection by making membership compulsory: 'because low risks cannot opt out, it makes possible a pooling solution' (Barr, 1992(1): 755). >Adverse Selection. Moral hazard: adverse selection is reinforced by a second process or condition, called 'moral hazard'. People who are insured against a certain risk may be more willing to take chances than they would be in the absence of insurance. Knowing that if I get sick or injured, my medical bills will be covered, may make me more willing to engage in risky behaviour, such as downhill skiing. To the extent that this occurs, organizations may face higher claims, thereby forcing them to raise their charges, and discouraging others from purchasing protection. More obviously, unemployment insurance schemes are subject to moral hazard, for knowing that I will be covered in the event that I am unemployed, I have an incentive to quit (or arrange to be fired) and/or not to seek or accept employment. Of course, state schemes are subject to moral hazard as well, but the key point is that if the genuine risk of losing one's job is to be covered at all, it must be covered through a public programme (see Barr, 1998(2): 190—2). >Moral hazard, >Free riders. For all of these reasons organizations offering protection will try to limit use, to prevent too many high risk people from joining, and to charge them more in order to hang on to their other members. In the case of voluntary groups, such as neighbourhood-, work- or craft-based mutual aid societies, informal patterns of social surveillance and affinity may function to exclude outsiders and others who are thought to be especially likely to need benefits. Similarly, private firms may use various underwrit- ing mechanisms to screen out high risk individuals or groups. The overall result may well be that certain groups may receive no or inadequate coverage, and the cost of services may be much greater than they would be if they were provided through a compulsory plan that spread risks more widely and rationed services to avoid overuse.* * An example of how a system dominated by private provision both is more expensive, and provides protection to a smaller proportion of the population, may be medical care in the US. The US spends a far higher proportion of its GDP (12.9 percent in 1998 compared with Germany's 10.3 or the UK's 6.8) on medical care than other rich countries, but fails to provide coverage for over 20 percent of its population. Ironically, public provision of medical care in the US is larger than that of the UK (5.8 versus 5.7 percent of GDP), not even counting the implicit subsidy represented by the favourable tax treatment of employer-provided health insurance (OECD health statistics). 1. Barr, Nicholas (1992) 'Economic theory and the welfare state'. Journal of Economic Literature, 30 (2): 741-803. 2. Barr, Nicholas (1998) The Economics of the Welfare State, 3rd edn. Stanford, CA: Stanford University Press. Moon, J. Donald 2004. „The Political Theory of the Welfare State“. In: Gaus, Gerald F. & Kukathas, Chandran 2004. Handbook of Political Theory. SAGE Publications |
Gaus I Gerald F. Gaus Chandran Kukathas Handbook of Political Theory London 2004 |
Law | Rawls | I 135 Law/Rawls: a conception of law is a set of principles of general form and universal application, which must be publicly known as the last appeal in the order of conflicts of moral persons. >Conflicts, >Justice, >Judicial system, >Legislation. These conditions exclude dictatorship and free-rider problems. >Dictatorship, >Free riders. Justice: their principles, on the other hand, are determined by their special role and the object to which they are applied. >Justice/Rawls. Generality/general validity: however, principles do not exclude general egoism. >Generality, >General validity. |
Rawl I J. Rawls A Theory of Justice: Original Edition Oxford 2005 |
Market Failure | Economic Theories | Mause I 378 Market Failure/Economic Theories: Market failure exists (Fritsch 2014)(1) when goods are characterized by such strong positive externalities that they have the character of public goods (simultaneity of non-rivalry in consumption and the non-excludability of free riders), or cost structures are so strongly characterized by subadditivity that even the entire market volume can be provided by only one company at the lowest marginal costs (natural monopolies). >Externalities, >Social goods, >Free riders, >Moral hazard, >Subadditivity, >Marginal costs, >Natural monopolies. 1. Fritsch, Michael. 2014. Marktversagen und Wirtschaftspolitik, 9. Aufl. München 2014. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Marxism | Olson | Brocker I 483 Marxism/Collective Action/Olson: OlsonVsMarx/OlsonVsMarxism: Problem: Marxist class theory and the pluralistic view of representation of interests overlook the problem of collective action. >Collective action. Brocker I 484 Although the members of the respective classes have common interests, this does not mean that each individual would also be motivated to make their individual contribution. Free rider problem: if the individuals who form a class act rationally, there will be no class-oriented action". (1) This applies to workers who form trade unions to fight for wage increases. But it also applies to the class of workers as a whole, which has an interest in overcoming the division of society into classes. >Free rider, >Moral hazard. 1. Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, Cambridge, Mass. 1965. Dt.: Mancur Olson, Die Logik des kollektiven Handelns: Kollektivgüter und die Theorie der Gruppen, Tübingen 1998 (zuerst 1968), p. 104. Johannes Marx, „Mancur Olson, Die Logik des kollektiven Handelns“, in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
EconOlson I Mancur Olson The logic of collective action: Public goods and the theory of groups Cambridge 1965 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 |
Mechanism Design | Economic Theories | Parisi I 490 Mecanism design/economic theories/Güth: (…) there is a long tradition of using auctions (see Milgrom, 1989)(1), partly very delicate applications like auctions to “trade” slaves. For the German-speaking areas, (…) Gandenberger (1961)(2) who documents an impressive constancy in relying on the lowest bid price procurement auction. Whether as procurement auctions by which a buyer wants to contract with one of the potential suppliers or as sales auctions where a seller wants to find a buyer, the literature now offers a lot of auction theory (Wilson, 1985)(3), auction experiments (e.g. Kagel, 2016)(4), and related field studies (Milgrom, 1989(1)). The voluntary supply of public projects, most typically in the form of pure public goods (see, e.g., Ledyard, 1995) or common pool resources (Ostrom, Walker, and Gardner, 1992)(5), also has a long tradition of applications. Rather than as a problem of mechanism design, it is usually studied by social dilemma games where community members nevertheless manage to cooperate to some extent, for example, due to repeated interaction, or some other aspects of their social life like monitoring and punishing (those who “free-ride”). Especially, the group in Bloomington has done an immense amount of field research and has also run experiments to study voluntary provision of public projects (see Ostrom, 2015)(6). Mechanism design, however, has a more recent, already very successful history (the Nobel laureates in 2007, L. Hurwicz, E. S. Mascin, and R. B. Myerson, were awarded for their achievements in the theory Parisi I 491 of mechanism design). Hurwicz (1960(7), 1973(8)) introduced the notion of incentive compatible mechanisms which in the form of dominance solvability were applied by Groves and Ledyard (1977)(9) to voluntary public good provision. The Revelation Principle had been propagated by Myerson (1979,(10) 1981(11), 1982(12)); Baron and Myerson (1982)(13); Maskin (1999)(14); Dasgupta, Hammond, and Mascin (1979)(15); Meyerson and Sattertwaithe (1983)(16); and Wilson (1985)(3), where we exclude the exercises for “large economies” (e.g. Bierbrauer and Hellwig, 2011)(17). The Revelation Principle is now a standard tool of mechanism design theory (see the more recent contributions like Bergemann and Morris, 2005(18) and Jehiel and Moldovanu, 2001(19)). >Decision-making processes, >Auctions, >Cooperation. 1. Milgrom, P. (1989). “Auctions and Bidding: A Primer.” Journal of Economic Perspectives 3(3): 3–22. 2. Gandenberger, O. (1961). Die Ausschreibung. Heidelberg: Quelle and Meyer. 3. Wilson, R. (1985). “Incentive efficiency of double auctions.” Econometrica 53(5): 1101–1115. 4. Kagel, J. H. and Roth, A. E. (2016). The Handbook of Experimental Economics, Volume 2. Princeton, NJ: Princeton University Press. 5. Ostrom, E., J. Walker, and R. Gardner (1992). “Covenants with and without a Sword: Self-Governance is Possible.” American Political Science Review 86(2): 404–417. 6. Ostrom, E. (2015). Governing the Commons. Cambridge: Cambridge University Press. 7. Hurwicz, L. (1960). “Optimality and informational efficiency in resource allocation processes,” in K. J. Arrow, S. Karlin, and P. Suppes, eds., Mathematical Methods in Social Sciences, 27–46. Stanford, CA: Stanford University Press. 8. Hurwicz, L. (1973). “The design of mechanisms for resource allocation.” American Economic Review 63(2): 1–30. 9. Groves, T. and J. Ledyard (1977). “Optimal Allocation of Public Goods: A Solution to the ‘Free Rider’ Problem.” Econometrica 45(4): 783–809. 10. Myerson, R. B. (1979). “Incentive compatibility and the bargaining problem.” Econometrica 47(1): 61–73. 11. Myerson, R. B. (1981). “Optimal Auction Design.” Mathematics of Operations Research 6(1): 58–73. 12. Myerson, R. B. (1982). “Optimal coordination mechanisms in generalized principal–agent problems.” Journal of Mathematical Economics 10(1): 67–81. 13. Baron, D. P. and R. B. Myerson (1982). “Regulating a monopolist with unknown costs.” Econometrica: Journal of the Econometric Society 4: 911–930. 14. Maskin, E. S. (1999). “Nash equilibrium and welfare optimality.” Review of Economic Studies 66(1): 23–38. 15. Dasgupta, P. S., P. J. Hammond, and E. S. Mascin (1979). “The implementation of social choice rules: some general results on incentive compatibility.” Review of Economic Studies 46: 185–216. 16. Myerson, R. B. and M. A. Satterthwaite (1983). “Efficient mechanisms for bilateral trading.” Journal of Economic Theory 29(2): 265–281. 17. Bierbrauer, F. and M. Hellwig (2011). Mechanism Design and Voting for Public-Good Provision. Preprints of the Max Planck Institute for Research on Collective Goods Bonn 2011/31. 18. Bergemann, D. and S. Morris (2005). “Robust mechanism design.” Econometrica 73(6): 1771–1813. 19. Jehiel, P. and B. Moldovanu (2001). “Efficient design with interdependent valuations.” Econometrica 69(5): 1237–1259. Werner Güth. “Mechanism design and the law”. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University. |
Parisi I Francesco Parisi (Ed) The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017 |
Moral Hazard | Economic Theories | Mause I 540f Def Moral Hazard/Health Policy/Economic Theory: (moral hazard is usually translated as "moral temptation") It is about the fact that an opportunism for the use of contractual services arises after the conclusion of a contract. Health policy: Important work on ex post moral hazard behavior comes from Nyman (2004 (1), 2008(2)) and Zweifel and Manning (2000 (3)). Based on the microeconomic demand model, these studies show that the incentives for (insured) demanders change with the introduction of health insurance. As a result, the introduction or extension of insurance cover increases health expenditure ceteris paribus. For empirical results: Newhouse 1993 (4). The use of health services decreases when payments have to be made. (Brook et al. 2006).(5) >Free rider. 1. Nyman, John A. 2004. Is ‚Moral Hazard‘ inefficient? The policy implications of a new theory. Health Affairs 23( 5): 194– 199. 2. Nyman, John A. 2008. Health insurance theory: The case of the missing welfare gain. European Journal of Health Economics 9( 4): 369– 380. 3. Zweifel, Peter, und Willard G. Manning. Moral hazard and consumer incentives in health care. In Handbook of health economics, Hrsg. Anthony J. Culyer und Joseph P. Newhouse, Bd. 1, 409– 459. Amsterdam 2000. 4Newhouse, Joseph P. Free for all? Lessons from the RAND Health Insurance Experiment. Cambridge 1993 5. Brook, Robert H., Emmett B. Keeler, Kathleen N. Lohr, Joseph P. Newhouse, John E. Ware, William H. Rogers, Allyson Ross Davies, Cathy D. Sherbourne, George A. Goldberg, Patricia Camp, Caren Kamberg, Arleen Leibowitz, Joan Keesey und David Reboussin. 2006. The Health Insurance Experiment: A classic RAND study speaks to the current health care reform debate. Santa Monica: RAND Corporation. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Multinational Corporations | Saez | Saez I 115 Multinational Corporations/Saez/Zucman: Down the path of tax competition, tax injustice will prosper and inequality will keep rising. >Tax Competition/Saez/Zucman. Fortunately, there are other, equally feasible paths. Halting the spiral of tax competition is possible: it is anything but utopian to expect that big multinational corporations will pay a decent amount of tax soon. An effective action plan has four pillars: exemplarity; coordination; defensive measures; and sanctions against free riders. Def Exemplarity/Saez/Zucman: each country should police its own multinationals. The United States should make sure that US companies, if they don’t pay enough abroad, at least pay their dime in America. Example: Imagine that, by shifting intangibles and manipulating intragroup transactions, the Italian automaker Fiat had managed to make $1 billion in profits in Ireland—taxed at 5%—and $1 billion in Jersey, one of the Channel Islands—taxed at 0%. There’s a problem here: Fiat pays much less tax than it should; much less, in particular, than domestic Italian businesses. We call this a tax deficit. The good news is that nothing prevents Italy from curbing this deficit itself, by collecting the taxes that tax havens choose not to levy. Concretely, Rome could tax Fiat’s Irish income at 20%. It could tax its Jersey bounty at 25%. More generally, it could easily impose remedial taxes such that Fiat’s effective tax rate, in each of the countries where it operates, equals 25%. Such a reduction of Fiat’s tax deficit would not violate any international treaty. It does not require the cooperation of tax havens. Saez I 116 This seems like a mundane tax administration issue until you realize that, thanks to this rich new information source, it has never been easier for big countries to police their own multinationals. The United States, France, Italy: any country could ensure its corporate champions pay a minimum tax rate of say 25% wherever they operate. Policing multinational companies this way would bring large sums home. Saez I 117 Is it realistic to expect big countries to start policing their multinationals in the foreseeable future? Very much so, for it is in their interest. Unlike trade, tax Saez I 118 competition makes some countries win and others lose, and all large economies are in the losers’ camp. They have a clear incentive to stop this shell game. (...) small countries that apply tiny tax rates collect a lot of corporate income tax revenue as a fraction of their national income. (...) because almost all multinational companies are headquartered in large economies, lawmakers in Rome, Berlin, and Washington can whistle the end of the game by collecting remedial taxes on profits booked by their multinationals in low-tax countries.(1) Saez I 119 Problem: A mutually agreed minimum tax among G20 countries would not solve all the problems. Companies could still dodge taxes by moving their headquarters to tax havens. Saez/Zucman: (...) the danger is exaggerated. For all the talk about tax inversions, very few firms have moved their headquarters to tropical islands. Among the world’s two thousand largest companies, only eighteen are headquartered in Ireland, thirteen in Singapore, seven in Luxembourg, and four in Bermuda today.(2) Close to a thousand are headquartered in the United States and the European Union, while most of the others are to be found in China, Japan, South Korea, and other G20 countries. >Tax Evasion/Saez/Zucman. Saez I 125 Solution: With a high enough tax floor, the logic of international competition would be turned on its head. >Globalization/Saez/Zucman. 1. The 2018 US tax reform introduced an embryo of remedial taxation with its GILTI (“global intangible low-tax income”) provision. According to this rule, the foreign profits of US multinationals deemed abnormally high (that is, exceeding a 10% return on tangible capital) are taxed at a minimum tax rate of 10.5% in the United States. However this provision is insufficient for two key reasons: the 10.5% tax rate is too low, and the remedial tax does not apply on a country-by-country basis but on a consolidated basis (which means that a company that books profits in Bermuda but pays high enough taxes in Japan can avoid it). See Toder (2018) for more details: Toder, Eric. “Explaining the TCJA’s International Reforms.” Tax Policy Center, Urban Institute and Brookings Institution, February 2, 2018. 2. Forbes. “GLOBAL 2000: The World’s Largest Public Companies.” May 15, 2019. Available at www.forbes.com/global2000 |
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Prisoner’s Dilemma | Ostrom | Mause I 157f Prisoner's Dilemma/Common Good/Common/Social Goods/Ostrom: the so-called "tragedy of the commons" (see Social Goods/Hardin) is often illustrated by the Prisoner's Dilemma, e.g. Ostrom. (1) For example, pasture and arable land used jointly by the farmers of a village. Options: a) "pure cooperation": restrictions of individual use to the level compatible with the collective optimisation (b) "pure defection": no restriction In this situation, each player, no matter how the rest of the villagers behave, will rationally prioritize their individual self-interests: On the one hand, everyone has the chance to reach their preferred situation by playing off their 'free rider strategy'. (...) So while the (weak) Pareto principle calls for cooperation, the principle of dominance urges every player to act against the common interest. In the end, everyone finds themselves in the worst collective situation. On the repetition of the Prisoner's Dilemma, see Prisoner's Dilemma/Fudenberg. 1. Elinor Ostrom, Governing the commons. The evolution of institutions for collective action. Cambridge: 1990, p. 3-5. |
EconOstr I Elinor Ostrom Governing the commons: The evolution of institutions for collective action Cambridge 1990 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Process Philosophy | Kanitscheider | II 175 Process philosophy/Whitehead/Kanitscheider: Attempt to establish a synthesis of science and religion. nothing is changed in the development of nature (Like deism). >Deism, >Religion, >Theology. II 176 The process philosophy works with the method of the double aspects. It does not doubt the continuity of development, it postulates an external and an internal aspect of nature God: source of novelty and order. Inwardly interwoven with the course of the world, he has a transcendent component, but with a part of his being he is an immanent part of the world. >Process/flux, >World, >Reality, >World/thinking, >Knowledge. II 176 KanitscheiderVsProcessPhilosophy/KanitscheiderVsWhitehead: The weakness lies in the double-aspect character: there is no possibility of testing the divine efficacy in the sequence of events. The explanatory power is zero. >Aspects, >Double Aspect Theory/Fechner. No iota changes if no transcendent causer is at work. Metaphysical "bandwagon effect" (free rider). >Metaphysics. ((s) The "influence on everything" can be cut away if it is uniform). Kanitscheider: The expression "influence on everything" can only be meant metaphorically. |
Kanitsch I B. Kanitscheider Kosmologie Stuttgart 1991 Kanitsch II B. Kanitscheider Im Innern der Natur Darmstadt 1996 |
Social Goods | Buchanan | Mause I 2767259 Social Goods/Tullock/Buchanan: Background problem: because of the unidentifiable number of free riders who do not pay anything for the benefit of the social good, its value cannot be determined. (See also VsSmauelson). Solution/Tullock/Buchanan: the ability to approve should not be applied to individual expenditure items but to the constitutional level. Question: how to design decision rules at the political level in such a way that undesirable and unfavourable results are largely excluded. (1) Buchanan: from this, a constitutional economics based on contract theory is developed.(2) >Constitutional economics as author, >About Constitutional Economics. 1. James M. Buchanan & Gordon Tullock. The calculus of consent. Logical foundations of constitutional democracy. Ann Arbor 1962. 2. James M. Buchanan. 1990. The domain of constitutional economics. Constitutional Political Economy 1 (1): 1– 18. |
EconBuchan I James M. Buchanan Politics as Public Choice Carmel, IN 2000 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Social Goods | Economic Theories | Mause I 275 Public goods/Economic theories: Problem: because of the free rider problem (the use of public goods by non-paying members) the value of public goods cannot be determined. >Public Goods/Samuelson. Solution: Suggestion: certain incentive mechanisms should encourage individuals to disclose their true willingness to pay. (Clarke 1971 (1), Groves & Loeb 1975 (2)) VsClarke/VsGrove/VsLoeb: Problem: 1. unwanted side effects due to the high complexity, 2. there are infinitely many Pareto optima, since the sum of the marginal willingness to pay depends on the distribution positions of the individuals in the society. Mause I 276 Public Goods/Economic theories: in a world of distorting taxes, the expenditure side cannot be viewed without the revenue side. The optimal supply of public goods then depends on which taxes can be used and to what extent these taxes lead to welfare losses due to their incentive-distorting effect. Solution/Browning/Dahlby: the marginal costs of public goods are multiplied by one that represents the marginal costs of public funds.(3)(4)(5) For counter arguments see >Public Goods/Kaplow. 1. Edward H. Clarke. 1971. Multipart pricing of public goods. Public Choice 11 (1): 17– 33. 2.Theodore Groves & Martin Loeb. 1975. Incentives and public inputs. Journal of Public Economics 4: 211– 226. 3. Edgar K. Browning, 1976. The marginal cost of public funds. Journal of Political Economy 84: 283– 298. 4. Bev Dahlby, 2008. The marginal cost of public funds: Theory and applications. Cambridge, MA 5. Charles L. Ballard & Don Fullerton. 1992. Distortionary taxes and the provision of public goods. Journal of Economic Perspectives 6( 3): 117– 131. |
Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Social Goods | Hirsch | Mause I 155 Social goods/common goods/Hirsch: The missing price mechanism is (...) being replaced by rationing according to the priority principle ("First come, first served"). The non-application of the exclusion principle makes a scarce resource a positional good (for this term Hirsch 1980(1)), which only provides benefit as long as one is the first (or one of the first) to use it; the (net) benefit, on the other hand, is zero if everyone has the good. >Benefit, >Utility, >Community, >Competition, >Moral hazard, >Free rider. 1. Fred Hirsch, Die sozialen Grenzen des Wachstums. Reinbek 1980. |
EconHirsch I Fred Hirsch Die sozialen Grenzen des Wachstums Reinbek 1980 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Social Goods | Lindahl | Mause I 276 Social Goods/Taxes/Lindahl: because of the principle of equivalence (which requires that every tax be legitimized by a benefit for the citizens on the expenditure side), Lindahl proposed individualized taxes as early as 1919, which are oriented towards the individual marginal benefit from the consumption of public goods. VsLindahl: Problem: then one comes back to the Samuelson condition and the problem that the value of the public property cannot be determined because of the undetermined number of free riders. See Social Goods/Samuelson. (See also VsSamuelson). Solutions: See Social Goods/Tullock, Social Goods/Buchanan. |
EconLind I Erik Lindahl Just Taxation - A Positive Solution in: R. A. Musgrave et al. (eds.), Classics in the Theory of Public Finance, International Economic Association 1958 German Edition: Die Gerechtigkeit der Besteuerung Lund 1919 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Social Goods | Rawls | I 92 Public goods/social goods/Rawls: primary social goods are rights and freedoms, opportunities and powers, income and prosperity. These goods are social because of their connection with the basic structure of a society; freedoms and powers are defined by the rules of the larger institutions; income distribution and prosperity are regulated by them. Rawls: The theory of common goods goes back to Aristotle and is shared by such diverse authors as Kant and Sidgwick. It is also controversial between utilitarianism and contract theory. >Contracts, >Contract theory, >Utilitarianism, >I. Kant, >H. Sidgwick. I 93 Goods/Rawls: a good is the fulfilment of a rational interest. We can assume that a rational individual has a plan that can fulfill different desires without mutual interference. Def rational plan/Rawls: be a plan that cannot be improved. I. e. there is no other plan that is preferred. >Planning. Def primary goods/Rawls: are those that all need, even if their plans differ. For example, intelligence, prosperity and opportunities are means of achieving goals that a person could not achieve by other means. In the initial state (of a society to be established), where people do not yet know what role they will play, these goods are what they know they are striving for. >Veil of ignorance. Problem: to create an index of available primary social and natural resources. Our principles, when processed in lexical order, help to do this. >Principles/Rawls. I 266 Public goods/Rawls: are above all indivisible and open to the public(1). If citizens want to benefit from this, it must be set up in such a way that everyone benefits to the same extent. National defense, for example. I 267 This means that public goods have to be steered by the political process and not by the market. Problems: special problems arise for public goods: 1. the free-rider problem(2): There is a temptation not to do one's own part of the duties, because this amount does not have a noticeable effect on the overall result. For the individual, the contribution of others always appears to have already been made. Therefore, the state must take over the regulation of the corresponding public goods(3). >Free riders. I 268 2. Characteristic of public goods: Externality. The production of these goods is also at the expense of those who never profit from them. Not all wishes are taken into account. For example, someone who gets vaccinated helps others as well as himself, even if he will never be exposed to this infection. >Externalities. For example, environmental damage is not normally regulated by the market. For example, raw materials may be produced at a much lower cost than their marginal social costs. Here there is a difference between private and social accounting that the market does not register. In this case, the indivisibility of public goods (e. g. infrastructure, freedoms, etc.) requires the state to take over the regulation. Problem: even in a society of fair people, the isolation of individual decisions does not lead to the fulfilment of the general interest. >Environmental damage. I 270 Economic form: the proportion of public goods in the economy as a whole is independent of the economic form - be it socialist or private - because the proportion of social resources spent on their production is independent of the question of the ownership of the means of production. >Socialism, >Capitalism. 1. See J. M. Buchanan, The Demand and Supply of Public Goods, Chicago, 1968, ch. IX. 2. Buchanan, ch. V; Mancur Olson, The Logic of Collective Action, Cambridge, MA, 1965, ch. I, II. 3. See W.J. Baumol, Welfare Economics and the Theory of the State, London, 1952, ch. I, VII-IX, XII. |
Rawl I J. Rawls A Theory of Justice: Original Edition Oxford 2005 |
Social Goods | Samuelson | Mause I 274f Social Goods/Samuelson: Social Goods are Characterized 1. By non-rivalry: e.g. national defence: its quality is independent of how many individuals it benefits. Unlike on the market for private goods (see Markets/Economic Theories) the sum of all individuals with a marginal willingness to pay, who consume the nonrival goods together must be added up in the case of nonrivalising goods. 2. By non-exclusion: even non-paying members can consume public goods. (free rider problem). Solution/Samuelson: Assuming there were only two goods (a social and a private one); if now the appreciation for the jointly consumed good is equated with the marginal social costs of providing this good, the Samuelson condition is obtained. VsSamuelson: Problem: the Samuelson condition is virtually useless because the concrete values it should be fed with cannot be determined. ((s) Reason: the number of free riders is undetermined). See also Social Goods/Economic Theories. |
EconSamu I Paul A. Samuelson The foundations of economic analysis Cambridge 1947 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Social Goods | Tullock | Mause I 276 Social Goods/Tullock/Buchanan: Background problem: because of the unidentifiable number of free riders who do not pay anything for the benefit of the social good, its value cannot be determined. (See also VsSmauelson). Solution/Tullock/Buchanan: the ability to approve should not be applied to individual expenditure items but to the constitutional level. Question: how to design decision rules at the political level in such a way that undesirable and unfavourable results are largely excluded. (1) Buchanan: from this, a constitutional economics based on contract theory is developed. (2) 1. James M. Buchanan & Gordon Tullock. The calculus of consent. Logical foundations of constitutional democracy. Ann Arbor 1962. 2. James M. Buchanan. 1990. The domain of constitutional economics. Constitutional Political Economy 1 (1): 1– 18. |
EconTull I Gordon Tullock Arthur Seldon Gordon L. Brady, Government failure: A primer in public choice Washington 2002 Mause I Karsten Mause Christian Müller Klaus Schubert, Politik und Wirtschaft: Ein integratives Kompendium Wiesbaden 2018 |
Trade Unions | Olson | Brocker I 482 Trade Unions/Olson: Why do some unions grow while others do not? Some unions grow for the status of a compulsory union to get their membership problem under control. This status is linked to the consequence that non-members are banned from working in areas covered by unions. However, not all unions succeed in this. Alternatively, other unions also provide positive selective incentives, e.g. various types of insurance for members. (1) I 483 Olson: "There is a contradiction between the very low level of trade union participation and the overwhelming support of workers for measures that force them to support a trade union" (2). Each group member wants all other group members to be unionized, and at the same time it is rational for individuals not to be members themselves or to stay away from trade union events. Because of the non-excludability (see Social Goods/Olson), the successes of the trade unions do not represent a reason or occasion for engagement for the individual. Brocker I 484 Classes/trade unions/Olson: Although the members of the respective classes have common interests, this does not mean that each individual would also be motivated to make their individual contribution. Free rider problem: if the individuals who form a class act rationally, there will be no class-oriented action". (3) This applies to workers who form trade unions to fight for wage increases. But it also applies to the class of workers as a whole, which has an interest in overcoming the division of society into classes. See Marxism/Olson. 1. Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups, Cambridge, Mass. 1965. Dt.: Mancur Olson, Die Logik des kollektiven Handelns: Kollektivgüter und die Theorie der Gruppen, Tübingen 1998 (zuerst 1968)., S. 71. 2. Ibid. p. 85 3. Ibid. p. 104 Johannes Marx, „Mancur Olson, Die Logik des kollektiven Handelns“, in: Manfred Brocker (Hg.) Geschichte des politischen Denkens. Das 20. Jahrhundert. Frankfurt/M. 2018 |
EconOlson I Mancur Olson The logic of collective action: Public goods and the theory of groups Cambridge 1965 Brocker I Manfred Brocker Geschichte des politischen Denkens. Das 20. Jahrhundert Frankfurt/M. 2018 |
Wikipedia | Shirky | I 109 Wikipedia/Shirky: Larry Sanger's and Jimmy Wales' original Nupedia was meant to feature volunteer experts who would write articles in their spare time and manage the entire project. --- I 110 In the months following the announcement of the project, most of the energy was used to set up an advisory board and to set guidelines for publication. A minimum standard of quality was supposed to be established, but the pace of development was extremely slow. Articles remained unfinished. --- I 111 Wiki/Solution: the solution were wikis; the first wiki was created in 1995 by Ward Cunningham. Collaboration/New Media/CunninghamVsNupedia: most complex collaboration tools shared the tasks of writing and publishing. Cunningham, on the other hand, assumed that people who work together trust each other. Then you need less formal management. Wikipedia originated from Nupedia after a friend Sanger told about Wikis. These were then installed and the "Chief Editor" Sanger became the "Chief-Organizer": ((s) Everyone who took part became an editor.) --- I 113 The Wikipedia project became Wikipedia.org to demonstrate its non-profit status. --- I 116 Shirky: although Wikis are suitable for writing different types of text, the early Wikipedia was influenced by rhetorical models of existing encyclopedias. This helped to coordinate the users. Topicality: within minutes of the 2005 London Underground bombing, a Wikipedia article appeared about it. --- I 118 Collaboration: none of the contributors to an article must be an expert on the selected topic. There is a group of people who are not strictly managed. Everyone can contribute something, such as a source on the subject he or she has found. The individual contributions can be minimal. This working method also takes into account the fact that the circumstances discussed in the article may change over time. --- I 119 Quality: in order for an article to be better, the good changes must simply outweigh the bad ones. Instead of filtering before publishing, Wikipedia assumes that new errors appear to be less frequent than corrections of existing errors. This assumption turned out to be correct. On average, the articles become better over time. --- I 121 A bad article can be an impulse to make a very good article out of it. (See Software/Shirky). --- I 130 Transaction costs/Wikipedia/Shirky: the way Wikipedia is organised reduces both: the overhead costs of the organisation (management) and the lack of incentives to participate. --- I 135 Vandalism: why is there hardly any vandalism on Wikipedia? Why are there no free riders? Solution: the format of the wiki starts working together after the first release, not before. All editing operations are always provisional and will be corrected. Deleting can also be undone. M. Wattenberg and B. Viega have observed edits of Wikipedia articles about the Islam and abortions. There were complete solutions that were restored in less than two minutes. (1) 1. Martin Wattenberg and Fernanda B. Viégas’s work on visualizing the history of Wikipedia edits, “History Flow,” is at www.research.ibm.com/visual/projects/history_flow/. |
Shirky I Clay Shirky Here Comes Everybody: The Power of Organizing Without Organizations New York 2009 |
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