Category Archives: Great Thinkers

Retro Review: Vlad Tarko on Elinor Ostrom

My review of Vlad Tarko’s excellent intellectual biography of Elinor Ostrom is up at Ostrom was the first woman to win the economics Nobel. In addition to popularizing the concept of polycentric governance, she, along with her husband Vincent Ostrom, co-founded the Workshop at Indiana University, which continues to produce high-quality multidisciplinary scholarship.

Vlad Tarko – Elinor Ostrom: An Intellectual Biography

Vlad Tarko – Elinor Ostrom: An Intellectual Biography 

Tarko is quickly establishing himself as a top-notch economist. In this, his first book, he offers the best available introduction to Nobel Laureate Elinor Ostrom’s work and the concept of polycentrism. Ostrom was the first, and so far the only, woman to win the economics Nobel [Update: I wrote this review before Esther Duflo co-won the 2019 prize in October]. She and her husband Vincent, also an accomplished economist and political scientist, ran a famous Workshop at Indiana University where they paid less attention to disciplinary boundaries than they did to solid theoretical and empirical research.

Elinor Ostrom also popularized the concept of polycentrism. It’s essentially a more finely graded version of federalism. The United States’ federal system has three main levels of government—federal, state, and local, plus a few in-between grades, most commonly counties. But not all services, Ostrom argues, fit cleanly into one of those categories. Services such as parks, police, and schools, have nothing to do with each other. They may also have different optimum characteristics. So why are they often provided at the same fixed level of government? What if a school district’s optimum size extends beyond a city’s boundaries? What if a park district would be better run as multiple, hyperlocal districts? Moreover, these optimum sizes will vary from place to place. A further complication is that these optimum sizes and structures are constantly changing and evolving as culture, technology, and demographics change. Nothing else stays the same, so why should the sizes of government “firms?”

From this polycentric framework, Ostrom teases out some ground rules for institutional design. One is that smaller is usually better. Most federal issues can be more effectively handled at the state level. Many state-level issues can be handled at smaller gradients, whether regional water or irrigation authorities, transportation authorities, or neighborhood-based policing, a term which now means nearly the opposite of what it did when Ostrom began using the term. Two, because times change, institutions need to be designed with flexibility in mind. They need to be able to grow, shrink, merge, separate, and evolve as circumstances dictate. The goal is the service, not this or that corporate structure, so make change easy.

Ostrom was much more than a theorist. She placed a far greater emphasis on field research than most scholars. This empirical backing greatly improved not just her own work, but that of her many students and collaborators. Tarko shares pictures, stories, and the research she conducted across the country and abroad over her long career. For an introduction to her thought and her broader approach, Tarko is an excellent place to start.

James Buchanan Turns 100

Don Boudreaux and Veronique de Rugy have an excellent tribute over at the American Institute for Economic Research.

And from the archives, here is a remembrance of Buchanan I wrote shortly after he passed away in 2013.

Peter Boettke – F. A. Hayek: Economics, Political Economy and Social Philosophy

Peter Boettke – F. A. Hayek: Economics, Political Economy and Social Philosophy

Boettke has both revived and deepened my appreciation of Hayek. He emphasizes the importance of institutions and rules of the game that I (and many others) thought Hayek had overlooked, at least in comparison to Douglass North, James Buchanan, Mancur Olson, and other thinkers.

He also clears up the common misconception that The Road to Serfdom is a slippery slope argument. Instead, Boettke argues it is an outgrowth of the great socialist calculation debate that dominated the economics profession in the 1920s and 1930s. Hayek’s teacher Ludwig von Mises argued that socialism is impossible because it has no price system. Without prices, any semblance of efficient resource allocation is impossible. Abba Lerner and Oskar Lange countered that not only is a planned economy possible, but experts can have fewer errors, redundancies, and other inefficiencies that come with free markets.

1944’s Road to Serfdom, looking back at this debate, argues that in addition to Mises’ calculation problem, a planned economy is incompatible with liberal institutions. Mises was right about the calculation problem, and Hayek expanded on Mises with his emphasis on knowledge problems, and by thinking of markets as an ongoing discovery procedure, rather than a static equilibrium.

But Hayek’s main point in Road to Serfdom is that the powers an authority would need to exercise to plan economy are incompatible with democracy, and with most forms of personal and economic choice. Planned economies and illiberal governments are a package deal. If a country chooses that package, it can always go back on it—which is why Hayek isn’t making a slippery slope argument. But if you want a planned economy, you cannot also have a free society. And if you want a free society, you cannot have a planned economy.

Chapter 10 I found genuinely inspiring. Boettke reminds the reader that liberalism must be liberal. It is not conservative, it is dynamic, forward-looking, outgoing, and inclusive, even if people look different, come from different countries, or speak different languages. Liberalism is also not progressive. Liberalism emphasizes bottom-up emergent orders over expert plans.

Liberals—in the correct, classical sense—and conservatives formed an alliance in the mid-20th century based on shared anti-communist beliefs, but they have little in common beyond that. Hayek’s essay “Why I Am Not a Conservative” is a key document here. But Boettke, in prose much more passionate than his usual restrained manner, argues that this odd alliance was overdone in Haeyk’s time, and is irrelevant now that communism is gone.

As a result, some thoroughly illiberal people are using the libertarian label to promote illiberal ideas on race, discrimination, immigration, trade, and other issues. This thought problem is causing a major marketing problem for liberals—not to put too fine a point on it, but as one example, many people confuse the Ludwig von Mises Institute’s ideas for those of Mises himself. This is a problem liberals have created for themselves, and the damage that alliances with shadier parts of the right have inflicted to the liberal cause will not be easy to undo.

Happy 120th Birthday, F.A. Hayek

Today would be Hayek’s 120th birthday. From the archives, here is an appreciation I wrote a few years ago of Hayek’s career and intellectual contributions.

Video Introduction to Hayek

Peter Boettke links to a useful video series introducing F.A. Hayek’s major themes and works, put together by Don Boudreaux and the Fraser Institute.

Timothy Sandefur – Frederick Douglass: Self-Made Man

Timothy Sandefur – Frederick Douglass: Self-Made Man

A short biography of one of America’s foremost abolitionists, and a leading intellectual and activist of his day. It was published just in time to mark Douglass’ 200th birthday in February 1818.

Not a definitive work by any means, but Sandefur takes care to emphasize not just Douglass’ principled abolitionism and liberalism, but that Douglass was considered one of the top all-around intellectuals of his day. He had the ears of presidents, and in his case this was a good thing.

Douglass also had a sharp business acumen and became wealthy from his writing and his speeches–an example of doing well while doing a lot of good. Douglass’ long list of accomplishments grows even longer when remembering that he was born into slavery. Douglass might be famous, but he is still underappreciated. Sandefur does much to right that wrong.

Dennis C. Rasmussen – The Infidel and the Professor: David Hume, Adam Smith, and the Friendship That Shaped Modern Thought

Dennis C. Rasmussen – The Infidel and the Professor: David Hume, Adam Smith, and the Friendship That Shaped Modern Thought

A highly enjoyable dual biography of David Hume and Adam Smith that mixes the personal and the intellectual. Rasmussen spends too much time on their religious beliefs for my taste, but still gives plenty of attention to more interesting topics. Hume was famously gregarious while Smith was intensely private, though their friendship was a close one. Despite some differences, they were also close intellectual allies who repeatedly defended each other from their many critics.

Hume gets the lion’s share of the book’s attention, mainly because Smith asked that most of his papers be burned after his death. His wishes were mostly respected, leaving less material for the historian to work from.

Harold Demsetz, 1930-2019

Over at, Iain Murray, Kent Lassman, and I reflect on the great economist Harold Demsetz’s intellectual legacy.

Rhetoric and Emotion

The beginning of Aristotle’s On Rhetoric has a lesson for staying informed despite today’s dominant political strategy:

Appeals to the emotions warp the judgment.

One of Aristotle’s main points is that rhetoric by itself is morally and ideologically neutral. A skilled rhetorician can use this weakness in human cognition for either good or evil. To do sound policy analysis, one must be aware when the emotional appeal strategy is being used, especially towards illiberal ends.