Adam G. Martin

Error is Obvious, Coordination is the Puzzle

G.K. Chesterton describes original sin as “the only part of Christian theology which can really be proved.” He goes on to mock those who deny its existence while clinging to a belief in God: If it be true (as it certainly is) that a man can feel exquisite happiness in skinning a cat, then the religious philosopher can only draw one of two deductions. He must either deny the existence of God, as all atheists do; or he must deny the present union between God and man, as all Christians do. The new theologians seem to think it a highly rationalistic solution to deny the cat. (Chesterton 1908, Ch. II) Chesterton’s argument is straightforward: given the obvious reality of evil in human affairs, the reasonable conclusion must be either that there is no supreme good (such as God) or that man is somehow separated from it. He claims that the new theology of his day is confused, positing a perfect good but denying what would explain the manifest gap between our experience and that ideal. The two intellectually serious alternatives, he argues, are atheism on the one hand or a theism that acknowledges sin on the other.

Rational choice without closure: the microfoundations of virtuous cycles and vicious circles

Economic stories with a rational choice structure usually entail closure or equilibrium. This paper argues that Knightian uncertainty and Kirznerian alertness allow economists to construct plausible accounts of open-ended processes such as virtuous cycles and vicious circles without abandoning the centrality of instrumental rationality. The basic form of such stories is explored and two example cases are put forward.

Regime Uncertainty and the Great Recession: A Market Process Approach

Regime uncertainty offers a compelling explanation for the slow recovery from the Great Recession in the United States. Market process theory provides a valuable theoretical framework for elaborating and extending the concept of uncertainty in order to generate new insights. One such insight is the asymmetric effect that episodes of regime uncertainty have on small and medium enterprises, which recovered more slowly from the Great Recession.

The Catallactic Point of View

Richard Wagners Mind, Society, and Human Action is an important contribution to our understanding of both economic science and real-world economies. This essay presents a diagrammatical schema for communicating Wagners vision of social processes and contrasting it with other approaches.

Spillovers from Voice and Exit

My use of voice or exit can have spillover effects on you. I argue that voice behaves in important respects like a positional good. Positional goods have value only relative to the goods that others possess. Acquiring positional goods imposes negative externalities on others who lose status. Voice grants a form of influence that is relative rather than absolute, and can give rise to a winner-take-all distribution of influence. The more effective your voice, the less effective mine. Exit, by contrast, has properties in common with a network good. A network good is valuable to the extent that other individuals possess the same good. Possession of the good thus generates positive externalities. Exit operates like a network good, generating direct and indirect spillovers that create benefits even for those who do not possess the capacity to exit.

Poverty Alleviation as an Economic Problem

Lionel Robbins famously distinguishes between technological problems, in which variable means confront a given end, and economic problems, in which given means are allocated across competing ends. This essay explores the implications of this distinction for poverty alleviation. We argue that there are three key dimensions to the economic problem: exchange, coordination, and governance. We then make a case that poverty alleviation is more like an economic problem than a technological one, an economic problem with a small ‘e.’ We survey empirical evidence from economics, anthropology, and sociology indicating that poverty is not a simple lack of objectively identifiable resources but rather a multidimensional and socially embedded phenomenon. Understanding what poverty alleviation would even look like requires thinking through problems of exchange, coordination, and governance.

The Substance of Entrepreneurship and the Entrepreneurship of Substances

Purpose - – The purpose of this paper is to clarify the distinctions and complementary of William Baumol and Israel Kirzner’s classifications of and insights into entrepreneurship, and thus providing a more complete taxonomy of the substance of entrepreneurial activity. This paper also attempts to clarify distinctions between unproductive and destructive entrepreneurship. Design/methodology/approach - – This paper illustrates a more complete taxonomy of the substance of entrepreneurial activity by examining entrepreneurial innovation in drug markets both legal and illegal, identifying cases of productive, unproductive, superfluous, erroneous, destructive, and protective entrepreneurship. Findings - – This paper finds that the classifications of entrepreneurship (productive, superfluous, unproductive, erroneous, protective and destructive) put forth by Baumol, Kirzner, and the institutional entrepreneurship literature are complementary. While Baumol seeks to explain the disequilibrating tendencies of entrepreneurship, Kirzner seeks to explain the equilibrating tendencies of entrepreneurship within the institutional context. Originality/value - – This paper utilizes case studies from legal and illegal drug markets to uniquely and better explain the six cases of entrepreneurship. This paper also contributes to the literature by clearly articulating the complementarity of Baumolian and Kirznerian entrepreneurship.

Taking the 'G' Out of BIG: A Comparative Political Economy Perspective on Basic Income

Libertarians are surprisingly comfortable with basic income guarantees and related proposals. The classic statement is Milton Friedman’s “negative income tax” proposal from Capitalism and Freedom (1962). In Friedman’s scheme, individuals earning an income beneath a certain threshold receive the difference between their income and that threshold rather than paying taxes. A basic income guarantee (BIG) differs only in that it pays an amount equal to that threshold to everyone regardless of income up front, balancing the outlay through taxes afterwards. Charles Murray (2006, 2008) has defended it as a potential compromise between libertarians and liberals as a measure replacing the welfare state. Hayek (1960: 376), while lambasting proposals to engineer the overall pattern of income distribution, defends the idea of a minimum income floor, one of the primary aims of basic income advocates. And libertarian economists have long argued that, given some redistribution, simple cash transfers are preferable to the bureaucratic machinery necessary for rationing specific goods.