Home' Policy Magazine : Policy Vol 33 - No 4 Contents 35
POLICY • Vol. 33 No. 4 • Summer 2017-2018
PETER J. BOETTKE
2003); T. Cowen, Creative Destruction: How Globalisation
is Changing the World’s Cultures (Princeton, NJ: Princeton
University Press, 2002).
12 D. Schmidtz, The Elements of Justice (Cambridge:
Cambridge University Press, 2006).
13 The work of my colleague Virgil Storr (2008) has
developed this core thesis of liberal political economy in
new and fascinating ways, and in the process drawing our
methodological and analytical attention to foundational
issues in the cultural science. V. H. Storr, ‘The Market
as a Social Space: On the Meaningful Extraeconomic
Conversations that can occur in Markets’, The Review of
Austrian Economics 21:2-3 (2008), 135-50. See also V. H.
Storr, Understanding the Culture of Markets, Foundations
of the Market Economy, edited by M. J. Rizzo and L. H.
White, vol. 31 (New York, NY: Routledge, 2012).
14 L. M. Mises, Liberalism (Irvington, NY: The Foundation
for Economic Education, ( 1985), 76
15 As above, 34.
16 Deirdre McCloskey, Bourgeois Virtues: Ethics for an Age of
Commerce (Chicago: University of Chicago Press, 2006);
Bourgeois Dignity: Why Economics Can’t Explain the Modern
World (Chicago: UCP, 2010) and Bourgeois Equality:
How Ideas, Not Capital or Institutions, Enriched the World
(Chicago: UCP, 2016).
17 See P. Boettke, Living Economics (Guatemala City,
Guatemala: Universidad Francisco Marroquin, 2012); P.
Boettke, S. Haeffele and V. Storr (eds), Mainline Economics:
Six Nobel Lectures in the Tradition of Adam Smith (Arlington,
VA: The Mercatus Center, 2016); and M. Mitchell and
P. Boettke, Applied Mainline Economics: Bridging the Gap
between Theory and Public Policy (Arlington, VA: The
Mercatus Center, 2017).
18 F.A. Hayek, ‘Individualism: True and False’, reprinted in
The Collected Works of F. A. Hayek, vol. 13 (Chicago, IL:
University of Chicago Press,  2010).
19 The liberal vision is often misunderstood even by extremely
intelligent folks such as Samuel Freedman (2001) and
Jeffrey Sachs (2012). Deirdre McCloskey has done great
work in trying to set the record on liberalism straight,
but all of us scholars within this tradition must take it
upon ourselves to ensure that liberalism is able to be
easily understood by folks such as Freedman and Sachs. S.
Freedman, ‘Illiberal Libertarians: Why Libertarianism is not
a Liberal View’, Philosophy and Public Affairs 30:2 (2001),
105-51 and J. Sachs, ‘Libertarian Illusions’, HuffPost (15
January 2012). For a critique of what I call the error of
‘litmus test’ libertarianism, see note 2.
20 V. Ostrom, The Intellectual Crisis of American Public
Administration (Tuscaloosa, AL: University of Alabama
Press,  1989).
21 D. Levy and S. Peart, Escape from Democracy (Cambridge:
Cambridge University Press, 2017).
22 Among contemporary liberal political economists
Christopher Coyne’s work on military affairs is in my
opinion the most insightful. C. Coyne, After War: The
Political Economy of Exporting Democracy (Palo Alto, CA:
Stanford University Press, 2008); C. Coyne, Doing Bad
By Doing Good: Why Humanitarian Action Fails (Palo
Alto, CA: Stanford University Press, 2013); C. Coyne
and A. Hall, Tyranny Comes Home: The Domestic Fate of
US Militarism (Palo Alto, CA: Stanford University Press,
23 The bumping into neighbours metaphor is from Schmidtz’s
brilliant The Elements of Justice (see note 12), as is the
essential issue of the right to say NO to offered terms of
24 James Buchanan has shown that the ‘general welfare’
approach to public policy is a nonsensical one throughout
his career, beginning in 1949 with his first critique of the
‘fiscal brain’. J. Buchanan, ‘The Pure Theory of Government
Finance’, Journal of Political Economy 57:6 (1949), 496-505.
25 F. A. Hayek, The Road to Serfdom (Chicago, IL: University
of Chicago Press, 1944), 101.
26 The troubling issues are the social ills that plague human
interactions, such as poverty, ignorance, squalor. But the
troubling issue in designing the framework is the potential
for the powerful to exert their influence over the powerless
and establish rules that provide them with a permanent
advantage. So both ‘within any system’ and ‘about any
system’ of governance we face trade-offs of eliciting
agreement and curbing political externalities. If our liberal
system of government is to institutionalise our basic human
equality in our ways of relating, then it must be designed
so that neither discrimination nor dominion is permitted.
Various classic works in the analytical tradition of political
economy from a liberal perspective have tackled different
aspects of these puzzles starting, of course, with F. A.
Hayek, The Constitution of Liberty (Chicago, IL: University
of Chicago Press, 1960); J. Buchanan and G. Tullock, The
Calculus of Consent: Logical Foundations of Constitutional
Democracy (Ann Arbor: University of Michigan Press,
1962); V. Ostrom, The Meaning of Democracy and the
Vulnerability of Democracies: A Response to Tocqueville’s
Challenge (Ann Arbor, MI: University of Michigan Press,
1997); and M. C. Munger, Choosing in Groups: Analytical
Politics Revisited (Cambridge: Cambridge University Press,
27 B. S. Frey, ‘A Utopia?: A Government without Territorial
Monopoly’, Journal of Institutional and Theoretical
Economics 157:1 (2001), 162-75.
28 E. Stringham, Private Governance: Creating Order in
Economic and Social Life (Oxford: Oxford University Press,
29 P. Leeson, Anarchy Unbound: Why Self-governance Works
Better than You Think (Cambridge: Cambridge University
30 See P. Boettke, ‘Pessimistically Optimistic’ for a discussion
of the interplay between Smithian and Schumpeterian
forces for optimism and the stupidity of the governmental
habit of obstructing the free flow of labour and capital and
stifling entrepreneurial creativity and initiative. P. Boettke,
‘Pessimistically Optimistic’, The Independent Review 20:3
31 J. Mokyr, A Culture of Growth: The Origins of the Modern
Economy (Princeton, NJ: Princeton University Press, 2016).
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