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From:
[log in to unmask] (Patrick Gunning)
Date:
Fri Mar 31 17:18:57 2006
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----------------- HES POSTING ----------------- 
 
In response to Daniel Bromley: 
 
Daniel, it seems to me that you would like to introduce norms and values into a system of
thought that does not have them, at least not in the ordinary sense of these terms. The
image of the "pure market economy" that I describe in my chapter is one in which the
rights to control all actions that have external effects are fully defined and protected.
These rights are exchangeable by law. In such an economy, the problem of greenhouse gasses
is not relevant unless the costs of making transactions are "high."
 
We use such an image as a starting point for building a much more complex image of a
system in which such rights are not or cannot be fully defined and enforced. Our ultimate
aim is to evaluate arguments for or against a policy intervention by considering its
effects in relation to the effects of non-intervention.
 
In building these images, we must make judgments about whether they are relevant to the
policy intervention the arguments for which we aim to evaluate. But these judgments are
not value judgments in the ordinary sense of the phrase.
 
To deny economics the use of such images is to deny economics the only means it has to
evaluate arguments for policies intended to deal with external effects. The alternative is
to make assertions without reasoning.
 
We can only consider the effects of intervention by comparing it with the alternative of
non-intervention. Modern societies are too complex and different to model in their
entirety. So we have no alternative but to resort to the simple image of a pure market
economy as a starting point. Admittedly, the image itself as well as comparisons that
employ this can be misused. But you are attacking the use of the image not its misuse.
Without the image, economists would have no place to start.
 
Of course, if you are writing only about that part of professional economics which is "a
contest in which language plays such a central role," I will agree. But that is not what I
was writing about. So perhaps we are not on the same wavelength.
 
Regarding labor, it seems to me that there are valid arguments _under particular
circumstances_ favoring a property system that permits both child labor and indentured
labor. But I am not aware of anyone who justifies employment of this kind _under all
circumstances_ on the basis of efficiency considerations.
 
Regarding the use of the term "free" to help describe the image of the pure market
economy, perhaps I should clarify by saying that I mean: "free under the law." I think
that the context of my previous post makes it clear that this is what I mean. I am not
referring to free in some other sense. The use of the term "free" in this context helps
distinguish the economist's image of the pure market economy from the real market
economies of the world which, as you point out, are full of legal interventions.
 
Pat Gunning 
 
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