Trade, Power, and Political Economy: Reason vs. Ideology in Edward Stringham’s Private Governance

Article

Abstract

In Private Governance: Creating Order in Economic and Social Life, Edward Stringham explains that private ordering is sufficient to secure full exploitation of gains from trade within a society. After describing the logic of Stringham’s claim on behalf of private ordering, the remainder of this essay examines an enigma that Stringham’s argument entails: private ordering is sufficient for social coordination and yet public ordering is ubiquitous. The exploitation of gains from trade might offer a useful ideology, but this provides but an incomplete basis for a theory of society. In this respect, societies are rife with antagonism and envy, though these often manifest themselves ideologically as claims about justice and fairness. Politics goes where the money is; private ordering reveals targets that public ordering subsequently exploits. The challenge for political economy is to integrate the autonomy of economizing action with the autonomy of political action, for these dual autonomies provide the crucible out of which emerges the material of political economy. Stringham has deepened our appreciation of what private governance can accomplish, but much unfinished analytical work confronts theorists of political economy.

Keywords

Externalities as profit opportunities Pretense of knowledge Crooked timber of humanity Prisoners’ dilemma mythology Power as mass phenomenon 

JEL classifications

B40 D60 D70 

References

  1. Boettke, P. J. (2001). Calculation and coordination. London: Routledge.CrossRefGoogle Scholar
  2. De Jouvenel, B. (1948). On power: It’s nature and the history of its growth. London: Hutchinson.Google Scholar
  3. Hayek, F.A. (1989 [1974]). The pretense of knowledge. American Economic Review 79: 3–7.Google Scholar
  4. Kahn, A. E. (1966). The tyranny of small decisions: Market failures, imperfections, and the limits of economics. Kyklos, 19, 23–47.CrossRefGoogle Scholar
  5. Knight, F. H. (1947). Freedom and reform: Essays in economics and social philosophy. New York: Harper & Row.Google Scholar
  6. Knight, F. H. (1960). Intelligence and democratic action. Cambridge: Harvard University Press.CrossRefGoogle Scholar
  7. Latour, B. (2005). Reassembling the social: An introduction to actor-network theory. Oxford: Oxford University Press.Google Scholar
  8. Lovejoy, A. O. (1961). Reflections on human nature. Baltimore: Johns Hopkins University Press.Google Scholar
  9. Pareto, V. (1909 [1971]). Manual of political economy. New York: Augustus M. Kelley.Google Scholar
  10. Pareto, V. (1915 [1935]). The mind and society: A treatise on general sociology. New York: Harcourt Brace.Google Scholar
  11. Patrick, M., & Wagner, R. E. (2015). From Mmixed economy to entangled political Eeconomy: A Paretian social-theoretic orientation. Public Choice, 164, 103–116.CrossRefGoogle Scholar
  12. Podemska-Mikluch, M., & Wagner, R. E. (2013). Dyads, triads, and the theory of exchange: Between liberty and coercion. Review of Austrian Economics, 26, 171–182.CrossRefGoogle Scholar
  13. Schmitt, C. (1996 [1932]). The concept of the political. Chicago: University of Chicago Press.Google Scholar
  14. Schoeck, H. (1969). Envy: A theory of social behavior. New York: Harcourt Brace.Google Scholar
  15. Storr, V. (2008). The market as a social space. Review of Austrian Economics, 21, 135–150.CrossRefGoogle Scholar
  16. Storr, V. (2013). Understanding the culture of markets. London: Routledge.Google Scholar
  17. Wagner, R. E. (2015). Welfare economics and second-best theory: Filling imaginary economic boxes. Cato Journal, 35, 133–146.Google Scholar
  18. Wagner, R. E. (2016). Politics as a peculiar business: Insights from a theory of entangled political economy. Cheltenham: Edward Elgar.CrossRefGoogle Scholar
  19. Warren, C. O. (1932). Congress as Santa Claus. Charlottesville: Michie.Google Scholar
  20. Watts, R. L., & Zimmerman, J. L. (1983). Agency problems, auditing, and the theory of the firm. Journal of Law and Economics, 26, 613–633.CrossRefGoogle Scholar
  21. Wieser, F. (1926). Das Gesetz der Macht. Vienna: Julius Springer.Google Scholar

Copyright information

© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.George Mason UniversityFairfaxUSA

Personalised recommendations