Economics Dictionary of ArgumentsHome
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| Economy: Economy is the system of production, distribution, and consumption of goods and services within a society. It determines how resources are allocated and how goods and services are produced and distributed. See also Economics, Markets, Goods, Labour, Society._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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James M. Buchanan on Economy - Dictionary of Arguments
Boudreaux I 97/98 Economy/Buchanan/Boudreaux/Holcombe: Buchanan insisted that the focus of economic analysis should be on markets, that is, on institutions of exchange, rather than on resource allocation. Buchanan says of economists who “are wholly concerned with the allocation of scarce resources among competing ends or uses… that theirs is not legitimate activity for practitioners of economics, as I want to define the discipline” (Buchanan, 1964(1): 216). The reason Buchanan insisted on this distinction (…) is that to conceive of economic activity as an exercise in resource allocation is to unwittingly assume that society is rather like a giant sentient individual with preferences all its own. Given its preferences and its income, society has only one “correct” way to “choose” - that there is one optimal allocation of resources. >Group behavior/Buchanan. Society/Buchanan: But, (…) society is not a giant sentient individual with its own preferences and brain for choosing. Society is the complex interactions of many individuals each in pursuit of his or her own goals. >Society/Buchanan. Solution/Buchanan: An “economy,” Buchanan observed, is the name that we give to the on-going process of many different individuals (and other organizations, including households and firms) pursuing their own individually chosen goals but with no overarching shared goal such as “the goal of the national economy.“(2) Boudreaux I 100 The engineering perspective that Buchanan warned against leads to individuals and firms being seen as mere cogs in a great machine, as a means for helping the economy achieve some grand outcome. As a value judgment, Buchanan, working as he did in the individualist, classical-liberal tradition, rejected this understanding of individuals. In addition, as an objective matter of economic science, Buchanan pointed out that this engineering conception of the economy is simply incorrect. Because the economy isn’t a sentient creature with purposes, it has no goals that can be pursued and met. The economy is nothing more than that which emerges, undesigned and unintended, when countless sentient individuals, in pursuit of their own goals, exchange with each other. 1. Buchanan, James M. (1964). “What Should Economists Do?” Sothern Economic Journal (January). 2. Ibid._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconBuchan I James M. Buchanan Politics as Public Choice Carmel, IN 2000 Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 |
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