Jason Briggeman

Israel Kirzner on Coordination and Discovery

Israel Kirzner has been one of the leaders in fashioning an Austrian school of economics. In his rendering of the Austrian school, one finds a marriage between Friedrich Hayek’s discourse with Ludwig von Mises’s deductive, praxeological image of science — a marriage that seems to us somewhat forced. The Misesian image of science stakes its claims to scientific status on purported axioms and categorical, 100-percent deductive truths, as well as the supposed avoidance of any looseness in evaluative judgments. In keeping with the praxeological style of discourse, Kirzner claims that his notion of coordination can be used as a clear-cut criterion of economic goodness. Kirzner wishes to claim that gainful entrepreneurial action in the market is always coordinative. We contend that Kirzner’s efforts to be categorical and to avoid looseness are unsuccessful. We argue that looseness inheres in the economic discussion of the most important things, and associate that viewpoint with Adam Smith. We suggest that Hayek is much closer to Smith than to Mises, and that Kirzner’s invocations of Hayek’s discussions of coordination are spurious. In denying looseness and trying to cope with the brittleness of categorical claims, Kirzner becomes abstruse. His discourse erupts with problems. Kirzner has erred in rejecting the understanding of coordination held by Hayek, Ronald Coase, and their contemporaries in the field at large. Kirzner’s refraining from the looser Smithian perspective stems from his devotion to Misesianism. Beyond all the criticism, however, we affirm the basic thrust of what Kirzner says about economic processes. Once we give up the claim that voluntary profitable activity is always or necessarily coordinative, and once we make peace with the aesthetic aspect of the idea of concatenate coordination, the basic claims of Kirzner can be salvaged: Voluntary profitable activity is usually coordinative, and government intervention is usually discoordinative. But the Misesian image of science must be dropped.

PROTECTING CULTURAL MONUMENTS AGAINST TERRORISM: A COMMENT

Frey and Rohner (2007) propose that governments credibly commit to reconstruction of cultural monuments, as this would deter terrorist attacks on monuments. We contend that precommitment will serve primarily to redirect terrorist attacks toward non‐replicable targets, possibly leading to loss of human life and physical capital at the expense of protecting monuments. The cost savings from lowering onsite security are minimal, thus funds would need to be redirected from other governmental activities to protect monuments.

Product Approvability Recommendations From FDA Advisory Committees:: Inconsistently Sought, Indirectly Obtained

Background: Divisions within the Food and Drug Administration (FDA) often convene meetings of advisory committees, also known as AdComm or Panel meetings. The purpose of many AdComm meetings is for the FDA to obtain outside advice and recommendations on whether to approve a new drug or medical device. Laws and regulations indicate that such Panels are to provide recommendations regarding the approvability of the drug or device by FDA. Methods: We examine recent AdComm meetings, including a systematic review of drugs and biologics AdComms between 2011 and 2016, to find whether FDA is obtaining Panel recommendations on drug and device approvability in accordance with these laws and regulations. (This article does not contain any studies with human or animal subjects performed by any of the authors.) Results: We find that Panel recommendations on approvability are often not obtained. We further find that, in most cases where Panel recommendations are obtained, voting procedures are such that those recommendations address product approvability in only an indirect manner. Conclusions: While FDA rightly has the authority to exercise discretion in many aspects of the product approval process, we believe that it must obtain clear recommendations whenever it convenes a Panel to address product approvability.

Chartering Super-Special Banks: Firm Formation and the Federal Reserve Act

There is not an overwhelming case to be made that the Federal Reserve System (FRS) should be analyzed as a bureau instead of as a firm or set of firms. Accordingly, I discuss the formation of the FRS in relation to the framework developed by William Gartner for describing the phenomenon of new venture creation. This framework illuminates the role played in the passage of the Federal Reserve Act by non-politician planners, some of whom knew well that they were destined to hold desirable positions within the incipient FRS. The role of such planners is not well illuminated by the conventional public choice framework, in which politicians are viewed as more or less acting alone in directing the formation of bureaus to enforce the parameters demanded by voters.