What should economists do now?

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Abstract

This essay discusses the arguments in Buchanan’s 1964 paper, ‘What should economists do?’, in the light of recent developments in behavioural economics. Criticizing the preference-satisfaction criterion of neoclassical economics, Buchanan argues that the central concern of economics should be to design and maintain institutions that allow individuals as much opportunity as possible to make their own choices and to engage in voluntary cooperation. He worries that using preference rather than choice as the fundamental normative concept might license social planners (and economists who see themselves as their advisers) to set themselves up as the judges of what individuals ‘truly’ prefer. This is exactly what behavioural welfare economics is now doing by using the satisfaction of (supposed) latent preferences as its criterion. Following Buchanan, I propose an opportunity-based criterion and argue that the contractarian justification for this criterion is unaffected by behavioural findings.
Original languageEnglish
Title of host publicationJames M. Buchanan
Subtitle of host publicationA Theorist of Political Economy and Social Philosophy
PublisherPalgrave Macmillan
Publication statusAccepted/In press - 5 Jun 2018

Publication series

NameRemaking Economics: Eminent Post-War Economists
PublisherPalgrave Macmillan

Keywords

  • James Buchanan
  • contractarianism
  • opportunity
  • behavioural economics
  • paternalism

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