*The Limits of Market Efficiency*

There is a new paper by James M. Buchanan, here is the abstract:

The framework rules within which either market or political activity takes place must be classified in the non-partitionability set under the Samuelson taxonomy. Therefore there is nothing comparable to the profit-loss dynamic of the market that will insure any continuing thrust toward more desirable rules. ‘Public choice’ has at least partially succeeded in getting economists to remove the romantic blinders toward politics and politicians as providers of non-partitionable goods. It is equally necessary to be hard-nosed in evaluating markets as providers of non-partitionable rules.

Hat tip goes to www.bookforum.com.

Comments

Somewhere, an Austrian is celebrating.

@Hieronymus Goat: Thanks for the understandable summary!

@Tyler Cowen: Please learn how to summarize, and make sure you understand something before you recommend it.

@Silas They are using their complex jargon, which can build understanding, but all too often hides simple pure ideas under an unnecessary sophistication, which is also the shibboleth of the academy.

So, you get papers that repeatedly reference the "non-partitionability set under the Samuelson taxonomy", yet are somehow supported and explained without a single mathematical formula or graphical representation.

For the malicious version, where intentional deception succeeds, see the Sokal physics paper that proposed quantum gravity is a social and linguistic construct, which was accepted and published by the peer-reviewed postmodern cultural studies journal Social Text. Peer reviewed that is, to approve scintillating theory that conformed to their social ideas, not for physical accuracy.

I google partitionable goods and the first page of results are either Buchanan or blogs about this paper or his book. Maybe google hasn't gotten to that frontier yet, or there may be a fine line between being the genius who discovered an idea and thus gets to name it versus just making stuff up.

Partionable goods seems to originate from "The Pure Theory of Public Expenditure" by Paul Samuelson. ( http://www.ses.unam.mx/docencia/2007II/Lecturas/M... )

It is a valid concept, and Samuelson does describe it mathematically.

Obviously Buchanan uses a lot of high-blown language in this paper, and there is some sloppy description, but it is intelligible.

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