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Fiet, James O.
2023.
Informational Entrepreneurship in a World with Limited Insight.
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49.
Article contents
Political Economy and Enterprise
Published online by Cambridge University Press: 07 November 2014
Extract
There is much talk in our time about freedom and economists have not been silent on the subject. It is apparent that in discussing the meaning and conditions of freedom they are moving beyond the limits of economics “proper” into the realm of political economy, which as O. H. Taylor has recently pointed out “… involves the latter [economic science] plus all other social or human sciences, plus philosophical, ethical and political reflection, plus thoughtful study of human history.” And since freedom involves value judgments, “ … is itself an ethical category …,” economics, in so far as economists concern themselves with freedom, cannot be regarded as a neutral science. There are deep waters here, deeper than many of freedom's advocates seem to realize. It is argued in this paper that while many economists writing about freedom will pay lip-service to the ideal of political economy as described by Professor Taylor, the strong tendency to remain economic scientists in thought and method is likely to produce in the end a flabbier economics and very little new light on freedom.
An approach very common in economic literature is to identify extremes of (i) freedom in thought and behaviour and (ii) authoritarian control, and then to suggest some happy middle way, preferably one which combines the “best” features of each. Freedom is identified with change, uncertainty and “progress” (these somehow identified with competition in free markets) and its absence with concentrations of power which threaten essential liberties. The problem appears to be that of reconciling liberty with stability, freedom of competition with an unseemly demand for security. To make the best of both worlds there must be some planning for stability, but not too much planning because it is so debilitating. Extremes must be avoided, some compromise sought; it is as simple as that.
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- Information
- Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique , Volume 15 , Issue 3 , August 1949 , pp. 322 - 333
- Copyright
- Copyright © Canadian Political Science Association 1949
References
1 Taylor, O. H., “The Economics of a ‘Free’ Society” (Quarterly Journal of Economics, 11, 1948, p. 642).Google Scholar
2 Knight, Frank H., Freedom and Reform (New York, 1947), p. 13.Google Scholar
3 Simons, Henry C., Economic Policy for a Free Society (Chicago, 1948).Google Scholar See especially pp. 22, 32, 42, 69, 111, 152, 154, and 244.
4 Oakeshott, Michael, “The Political Economy of Freedom” (Cambridge Journal, 01, 1949, p. 217).Google Scholar “… the rule of law is the greatest single condition of our freedom, removing from us that great fear which has overshadowed so many communities, the fear of the power of our own government.”
5 See Hardy, Charles Oscar, “Liberalism in the Modern State: The Philosophy of Henry Simons” (Journal of Political Economy, 08, 1948).CrossRefGoogle Scholar
6 Quoted by SirHenderson, Hubert, “The Price System” (Economic Journal, 12, 1948, p. 471).Google Scholar
7 Robbins, Lionel, The Economic Problem in Peace and War (London, 1947). See especially pp. 1, 16, and 53.Google Scholar
8 Wright, David McCord, Democracy and Progress (New York, 1947). See pp. 37-8, 42, and 103 Google Scholar; also p. 218, “The orient had regulation, hierarchy, absolute power and a noncompetitive philosophy for a thousand years, but it has produced no such results as our two hundred years of competition” (italics mine); and pp. 126-7, “By seeing to it that there is always, on the average, enough smaller active and independent business, and enough inter-product competition to keep large scale business from becoming either stagnant or oppressive, and that there is sufficient frontier of unregimented change to give an outlet to the restless spirit of inquiry, we may hope to maintain an adequate transfer mechanism and an adequate spur toward overcoming restrictionism and thus keep our country free” (italics mine).
9 Simons, , Economic Policy for a Free Society, p. 146 Google Scholar, “… the old risks of investing in the wrong places—risks of demand changes, of technical obsolescence in plant facilities, and of guessing badly only because too many others guessed the same way.”
10 These are outlined in the next section of this paper.
11 See Aitken, Hugh, “The Analysis of Decisions” (Explorations in Entrepreneurial History, 02, 1949)Google Scholar for a note on the use of the concept of parameters of entrepreneurial action.
12 See Easterbrook, W. T., “The Climate of Enterprise” (Proceedings of the American Economic Association, 05, 1949).Google Scholar
13 Ibid.
14 This is very different from state activity designed to fill in gaps left by restrictionist policies an economy dominated by bureaucratic elements of the sort Simons inveighed against.
15 There is an odd timeliness about the present-day tendency to question once widely held beliefs concerning laissez-faire in fact and theory. Cf. Brebner, J. Bartlet, “Laissez Faire and State Intervention in Nineteenth Century Britain” (Tasks of Economic History, Supplement VIII, 1948, pp. 59–73 Google Scholar) and Hartz, Louis, Economic Policy and Democratic Thought (Cambridge, 1948).CrossRefGoogle Scholar
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