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By Horst Hanusch (auth.), Prof. Dr. Horst Hanusch (eds.)

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Additional info for Anatomy of Government Deficiencies: Proceedings of a Conference held at Diessen, Germany July 22–25, 1980

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It is, nonetheless, equivalent to that model for market behavior that the same orthodox political scientist is quite willing to adopt when he accepts the "market failure" diagnosis from the theoretical welfare economist, and uses this diagnosis to justify the extension of political controls over markets. 22 James M. Buchanan What I am suggesting in this paper is that neither markets nor politics can be appropriately modelled in the strict formulation of the homo economicus construction. We must reckon on other-than-economic arguments in individual utility functions, both in market dealings and in political dealings.

It is easy, for me at least, to understand the genuine intellectual excitement generated in the discoveries of classical political economy, discoveries of the efficacy of market coordination. The total and critical dependency of man upon the moral and ethical precepts of his fellows seemed to be at least partially mitigated. To the extent that markets were well designed and allowed to function in a constitutional-legal order, that men were allowed to follow the system of natural liberty in free and open competition one with another, there was less need to be concerned by man's failure to live up to the behavioral standards dictated by his bishop.

1979b), "Economics Efficiency and Inefficient Economics" Journal of Post Keynesian Economics, (Fall) 2, pp. 71-82. Wolf, Ch. jr. (1980), Ethics and Policy Analysis, Santa Monica: Rand Corporation, P-6463-1, February 1980. From this structure, my JLE article derived a typology of non-market failure (in terms of "internalities", redundant and rising costs, derived externalities, and distributional inequity), and suggested how it might be compared with the existing typology of market failure. See Wolf (1979a, pp.

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