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

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.

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Notes

  1. 1.

    While the private-public disjunction is in common use, the object of any social science is social interactions and relationships. The distinction between private and public has nothing to do with the distinction between a solitary Crusoe and interaction among a set of Crusoes. It rather concerns different ways of constituting social interactions and relationships. As Virgil Storr (2008, 2013) explains, what is commonly described as the market is not something truly private but rather is a social and cultural space. With private ordering social configurations are generated through agreement among willing participants. With public ordering some people are able to force other people to participate within those configurations.

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Correspondence to Richard Wagner.

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A review essay inspired by Edward Peter Stringham, Private Governance: Creating Order in Economic and Social Life. New York: Oxford University Press, 2015, pp. 296, $45.

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Wagner, R. Trade, Power, and Political Economy: Reason vs. Ideology in Edward Stringham’s Private Governance . Rev Austrian Econ 31, 245–255 (2018). https://doi.org/10.1007/s11138-017-0385-0

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Keywords

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

JEL classifications

  • B40
  • D60
  • D70