Marta Podemska-Mikluch

Entangled Political Economy and the Two Faces of Entrepreneurship

This paper contrasts two forms of entrepreneurship -- genuine and parasitical -- within a framework of entangled political economy. In 1911, Joseph Schumpeter described entrepreneurship as the locus of leadership within a capitalist economy. At that time state participation in economic activity was dramatically less than it is now. Entrepreneurship was largely free of political entanglement. After a century of governmental expansion, however, entrepreneurship has increasingly become entangled in parasitical political relationships. Where genuine entrepreneurship is a feature of a constitution of liberty, parasitical entrepreneurship is a feature of a constitution of control.

Public Choice Lessons from the Wizarding World of Harry Potter

J.K Rowling’s series of books about the underage wizard Harry Potter is an exceptionally effective tool for introducing students to the key concepts of public choice. By keeping political figures at the forefront of the story, Rowling encourages students to recognize the differences between the choices made by individuals in markets and politics. To illuminate the pedagogical potential of the series, and to ease its adoption, we discuss a set of examples that best illustrate the key concepts of public choice. We also share a classroom exercise showcasing how the series can be used to promote active learning.

Public Policy: Object of Choice or Emergent Phenomena? Learning from the Implementation of the Medical Reimbursement Act in Poland

The recurring implementation and continuous maintenance of price controls implies a deep incongruence between public policy and economic common sense. Yet, economists do not tire of concluding their papers with policy recommendations as if oblivious to the ineffectiveness of their efforts. By assuming that policy is an object of choice, economists have no alternative but to naively hope for a decision maker sensitive to economic logic. An alternative approach is to think of policy, not as an object of choice but as an outcome of a competitive process. From this perspective, the often-lamented disregard for economic principles is not a characteristic of a deficient policy-maker, but a systemic quality of institutional arrangements. I illustrate my argument with the analysis of the implementation of rigid prices for reimbursed pharmaceuticals in Poland.

Economic Coordination within a Mixed Ecology of Enterprises: Erasing a Theoretical Antinomy

Economic theory contains a significant theoretical antinomy that we seek to erase. That theory can account for coordination through markets. Such coordination, however, covers only some 50-60 percent of economic activity within developed nations. The theory ignores the remainder by presuming that it is provided somehow through the insertion of collective planning and power. We seek to erase this common theoretical antinomy by locating political action within the transactional framework of market interaction. All economic activity, whether pursued by private or collective entities, occurs within a framework of incomplete and distributed knowledge. A significant precursor to our effort is Maffeo Pantaleoni’s (1911) recognition of the parasitical character of political pricing, where political entities calculate through parasitical attachment to market entities. We use a simple model of coordination within an airport to illustrate our approach to economic coordination among differently constituted enterprises.

The Lost Consensus: Unanimity Rule in the Institutional Context

Beginning in the second half of the 17th century any deputy could dismiss a session of the Polish-Lithuanian parliament by shouting: I do not allow. This political device came to be known as liberum veto, an unceasing subject of controversy. Historians blame it for the decline and subsequent collapse of the Polish-Lithuanian Commonwealth. In contrast, public choice economists defend unanimity as an optimal rule of collective decision-making and a standard for policy evaluation in a free society. I argue that the role of formal rules depends on the institutional context in which they operate. As the historical circumstances evolved, so did the role and understanding of unanimity. I conclude that the rule of law cannot be protected by formal rules as these are subject to institutional erosion.