Misjudging the character of the welfare state: Hayek, generality, and the knowledge problem

CHRISTOPHER S. MARTIN & NIKOLAI G. WENZEL

THE REVIEW OF AUSTRIAN ECONOMICS

Abstract: What are the limits of collective action? As James Buchanan famously worried, is it possible to empower the productive state without lapsing into the predatory state? This paper uses insights from F.A. Hayek to address problems of public goods and the role of the state. Hayek convincingly argued that no central planner has sufficient knowledge to run an economy. Yet Hayek also allowed for state provision of some goods beyond the prevention of coercion. The question, then, is whether Hayek’s safeguards offer a satisfactory response to Buchanan’s worry. This paper contends that Hayek violated his own conditions for permissible government activity. Nevertheless, he offers a serious research agenda for limiting state abuses.

Bowling for Fascism: Social Capital and the Rise of the Nazi Party

SHANKER SATYANATH

JOURNAL OF POLITICAL ECONOMY

Abstract: Using newly collected data on association density in 229 towns and cities in interwar Germany, we show that denser social networks were associated with faster entry into the Nazi Party. The effect is large: one standard deviation higher association density is associated with at least 15 percent faster Nazi Party entry. Party membership, in turn, predicts electoral success. Social networks thus aided the rise of the Nazis that destroyed Germany’s first democracy. The effects of social capital depended on the political context: in federal states with more stable governments, higher association density was not correlated with faster Nazi Party entry.

Nationhood and Constitutionalism in the Ditch Republic: An Examination of Grotius’ Antiquity of the Batavian Republic

ALEXANDER-DAVEY, E.

HISTORY OF POLITICAL THOUGHT, Volume 38, Number 1

Abstract: The emphasis in contemporary democratic theory and in the history of political thought on the ‘natural rights’ theory of popular sovereignty of Locke, precursors of which are found in the work of Hugo Grotius and others, obscures an important relationship between constitutional self-government and nationalism. Through an examination of the early political writings of Grotius, especially his Antiquity of the Batavian Republic, this essay shows how a national consciousness forged out of memories of native traditions of self-government, and stories of heroic ancestors who successfully defended those traditions against usurpers and tyrants, gives concrete substance to otherwise inchoate theories of constitutional self-government.

The Problem of Natural Religion in Smith’s Moral Thought

COLIN HEYDT

JOURNAL OF THE HISTORY OF IDEAS

Abstract: Adam Smith is one of the philosophers whose views on the relation of morality to religion have been very actively debated. It is accepted that Smith had unorthodox personal religious beliefs. The crux of the debate, however, is whether or not the God of natural religion is essential, in one or more ways, to Smith’s moral theory. A number of recent interpretations defend the description of Adam Smith as “a strong supporter of natural theology.”2 This paper argues [End Page 73] against that claim, using both novel evidence and familiar evidence applied in novel ways. I demonstrate here that Smith took positions at odds with a commitment to natural religion’s importance for morality. In particular, I show that it is hard to square Smith’s alleged support of natural religion with his account of conscience, his natural-rights theory, and his omission of piety from his catalogue of virtues.

Thomas Hodgskin, Socialist or Anti-Privilege Libertarian?

ALBERTO MINGARDI

JOURNAL DES ÉCONOMISTES ET DES ÉTUDES HUMAINES

Abstract: Thomas Hodgskin (1797–1869) is still studied as a forerunner of modern socialism: in fact, he is typically characterized as a prominent “Ricardian socialist”. Among the most influential of Hodgskin’s works was his pamphlet Labour Defended Against the Claims of Capital (1825a), thus prefiguring with its very title announces a denunciation of capitalism. Hodgskin’s work should be considered instead in its entirety, paying proper attention to its nuances. If Hodgskin indeed chastised “capitalism,” he meant precisely what we now call “crony capitalism.” He did not condemn the “higgling of the market,” which he thought should be the sole mechanism by which resources, including human labour, are allocated. But he saw clearly that legislative meddling served specific interests and often prevented market forces to emerge and blossom. If he was unfriendly towards the “capitalist” class, it was only because he saw them as disproportionally benefiting from the favour of political power. Hodgskin denounced the idle classes but did not want to substitute the market process with any alternative distributive scheme. He considered a sound understanding of an innovation-fostering economy incompatible with archaic distribution of privilege on the part of government. His work can help to clarify how embracing the market economy did and does not entail a defence of the status quo.

Suffrage, labour markets and coalitions in colonial Virginia

ELENA NIKOLOVA & MILENA NIKOLOVA

EUROPEAN JOURNAL OF POLITICAL ECONOMY

Abstract: We study Virginia’s suffrage from the early-17th century until the American Revolution using an analytical narrative and econometric analysis of unique data on franchise restrictions. First, we hold that suffrage changes reflected labour market dynamics. Indeed, Virginia’s liberal institutions initially served to attract indentured servants from England who were needed in the labour-intensive tobacco farming but deteriorated once worker demand subsided and planters replaced white workers with slaves. Second, we argue that Virginia’s suffrage was also the result of political bargaining influenced by shifting societal coalitions. We show that new politically influential coalitions of freemen and then of small and large slave-holding farmers emerged in the second half of the 17th and early-18th centuries, respectively. These coalitions were instrumental in reversing the earlier democratic institution\s. Our main contribution stems from integrating the labour markets and bargaining/coalitions arguments, thus proving a novel theoretical and empirical explanation for institutional change.

A model of the beginnings of coinage in antiquity

JACQUES MELITZ

EUROPEAN REVIEW OF ECONOMIC HISTORY, Volume 21, Issue 1

Abstract: There have been important advances by archeologists and numismatists in recent decades in the study of the beginnings of coinage in Ionia, Lydia, and Greece before the fifth century B.C. This paper provides a model of the birth of coinage that brings these advances into a broad analysis of the subject-matter. It pulls together many factors that are often treated separately. In addition, the model yields one important new result. Contrary to popular assumption, early coinage was not highly profitable. The Lydian government and the Greek city-states provided an extremely wide array of denominations of coins in a single precious metal at considerable cost. Their willingness to bear this cost must have reflected a political strategy of promoting coinage. Such a political strategy would also be easy to explain. As a large payer and recipient of money in the form of precious metals, the government had much to gain from the spread of coinage in order to economize on transaction costs in its own affairs.