Masonomics

An interesting article from Arnold Kling on George Mason University (my alma mater) and economics...

In 1962, few people knew that the future of popular music was to be found in Liverpool, England and Hamburg, Germany. In the early 1970's, few people knew that the future of information processing was to be found at the Homebrew Computer Club. In 1993, few people knew that the future of online software was in Champaign-Urbana, Illinois. Years from now, perhaps people will be saying that something big got started recently at the George Mason University department of economics....

The excitement at Mason is in blogs and books. The three most well-known blogs are Marginal Revolution (Tyler Cowen and Alex Tabarrok), Econlib (Bryan Caplan and myself), and Cafe Hayek (Russ Roberts and Don Boudreaux). Robin Hanson (Overcoming Bias) is one of many other Mason faculty and graduate students who blog. This year, both Caplan and Cowen produced influential books, Myth of the Rational Voter and Discover Your Inner Economist, respectively.

Why do Masonomists blog so avidly? I think it is because there is a sense that we are onto something, and we want to ramp up the conversation among ourselves as well as communicate with a wider audience.

Lose the we

Most economists favor the free market, with reservations. Masonomics rejects the reservations. If John and Mary are free individuals, and John trades with Mary, then John and Mary both are better off. End of story.

Most other economists believe in the need for government intervention. Like many non-economists, they talk about government policy in terms of we. We must, we have to, we need, we should, etc.

Once upon a time, "We, the people" was the preamble to a charter that reminded those in government of the limitations on the power granted to them. In today's political discourse, "we" is more often the preamble to something like a call for an involuntary collective health system.

If you want to be a Masonomist, you have to lose the we. When people use we in today's politics, they are doing two things.

1. Appealing to a moral entity that stands apart from and above John, Mary, or any other individual

2. Treating government as the embodiment of that higher moral entity

You can be a Masonomist and believe (1). It is a good thing to have a conscience and moral standards. It is a good thing to engage in volunteer work, to form organizations that address the needs of others, and to act unselfishly toward family and others in your community.

Masonomists encourage our noble impulses. Tyler Cowen's book is a cross between a self-help manual and an essay on moral philosophy. In one section, he suggests ways that one can modify one's behavior in order to give enough to charity and to ensure that one's charitable contributions are made wisely.

However, Masonomics is unrelenting in its rejection of (2). For many years, George Mason has been the home of Public Choice Theory, which says that instead of imagining what a wise, omniscient, benevolent government might do, one should pay attention to how government operates in practice. Nobel Laureate James Buchanan, founder (with Gordon Tullock) of Public Choice, is the gray eminence of Masonomics.

In practice, the impetus for stopping John and Mary from trading typically comes not from a higher moral entity, but from Mary's competitor Sam. For example, Boudreaux has studied the history of anti-trust. In theory, anti-trust laws are designed to protect consumers from high-priced monopoly. In practice, anti-trust laws are used by competitors to punish low-price competition. For example, when Microsoft was hit with anti-trust action, the "crime" was giving away a web browser for free! You can learn more by listening to this conversation between Boudreaux and Roberts...