Classical Liberal Economists Research Articles

Cost-Benefit Analysis as a Failure to Learn from the Past

This short note argues that cost-benefit analysis (CBA), a tool employed by professional economists to evaluate the welfare consequences of public policies, embodies a variety of failures to heed the warnings of famous classical liberal economists. CBA attributes characteristics of individuals to society, fails to adequately account for the “unseen” consequences of policy, wipes out the future with a social discount rate as if “in the long run we are all dead,” and is an example of how the pursuit of mathematical logic can lead to failures of common sense. As a result of these problems, CBA offers a useful teaching device for students, demonstrating how even modern-day economists at the top of their profession continue to make basic errors pointed out by economists generations ago. CBA in this context is best thought of as a failure to learn from the past.

Evaluating Intervention-Crisis-Disintervention Cycles in Brazil, 1989-2019: An Exploratory Proposal

Classical liberal economists have proposed a theory of intervention-crisis-disintervention cycles that allow us to find the right moment to promote market liberalization. Our project seeks to understand the Brazilian cycle since its democratic opening in the 1980s as a way of enhancing the impact of free market policies. Following the Brazilian presidential elections of 2018, Brazil is entering, in our view, a new phase of disintervention. An appropriate framing of the issue is paramount for a successful design of strategies in the pursuit of sustainable long-term liberalization.

Democracy, Bureaucracy, and Hypocrisy Redux: A Search for Sympathy and Compassion

I Dwight Waldo's 1977 Royer lecture advances a cogent and concise statement concerning the fundamental essences of democracy and bureaucracy and, by so doing, demonstrates the intrinsic tensions that exist at the interface of these two concepts. As viewed by Waldo, the counterpolar forces that are generated by the juxtaposition of these two concepts give rise to a third, hypocrisy. Hypocrisy enters because the `dialectic' between democracy and bureaucracy offers extraordinary opportunities for confusion and self-delusion and invites self-serving opinions. After all, both democracy and bureaucracy are multifaceted and controversial. When both are studied together, the opportunities for confusion and delusion are multiplied, given the human capacity for irrationality and ego-serving views of the world (16). One reason for confusion and delusion is that the engines of democracy and bureaucracy run on different tracks, leaving from different stations and heading for different destinations. Sometimes they run parallel to each other, seemingly moving as one; more frequently, their tracks either diverge or converge, depending on the forces that are exerted on them at any given moment. When they do converge, the inevitable result is, as Waldo politely suggests, a dialectical happening, by which I assume he means a hell of a train wreck. Elsewhere in his writings, Waldo (1980, 45) reflects on these inevitable happenings and asks: Why would an instrument [bureaucracy] designed to be impersonal and calculating be expected to be effective in delivering sympathy and compassion? One cynical answer that immediately suggests itself is that such expectations are the nurturing catalysts of hypocrisy and that the methods of allocating political power in our systems of governance thrive on the exploitation of hypocrisy. But such an explanation is too glib, too superficial. More fundamentally, the answer may be found in the manner in which we have twisted democracy to fit the cardinal canons of management, which are embedded deeply in the bureaucratic systems. The result may be hypocrisy in an extreme form. Continuing in his Royer lecture, Waldo provides a brief survey of classical liberal economists, public choice economists, and contemporary liberals as examples of those who are in the vanguard of fostering hypocrisy in the most erudite manner. Waldo did not exempt from the charge of hypocrisy, indeed not. Again and again he caught himself in entertaining, according to circumstance, two opinions that cannot be reconciled, or defending a position that, objectively considered, is clearly in his own self-interest. Over time, certainly, he accepted then rejected various positions or solutions (Waldo 1977, 18). My purpose here is not to hold our profession's most distinguished sage accountable for thoughts and words recorded nearly 20 years ago. He may have changed his position on hypocrisy being the bad seed of the union between democracy and bureaucracy. I would hope not, though, because it seems to me that the predominant operational characteristic of the fusion of democracy and bureaucracy -- that which, in turn, defines our deeply ingrained paradigm of policy and administration in a democratic society -- is hypocrisy. II One logical way to begin is to consider the historical roots of the term hypocrisy. Based on its Greek origins, hypocrite connotes an actor, one who plays a part; who pretends by adopting an attitude that is at variance with his or her own convictions; who articulates one thing but, in fact, means something quite different. Just how well we fit into these parameters of hypocrisy can be judged by the manner in which we still embrace the democratic rhetoric of Jefferson while continuing to act in a pragmatic manner befitting Madison. Moreover, we, as a society, continue to sanctify the virtue of union -- unity through diversity -- but, by the same token, we are loath to forego rugged individualism as the categorical imperative of freedom. …