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Richard Wagner



Articles by Richard Wagner

The Language of Taxation

November 24, 2020

The economic analysis of taxation contains two disparate strands of theorizing. One strand is a scientific strand that seeks to explain the rhyme and reason of the pattern of taxation that governments create. The other strand is a normative or exhortatory strand that seeks to instruct governments as to how they should extract taxes from the population. There is no good reason why a theorist can’t contribute to both strands, only not at the same time because the position of political partisan requires different theoretical formulations than does the position of political observer. Yet the two distinct roles and their associated formulations are often confounded, with the result being that the language of taxation often entails commingling between ideological claims and scientifically based

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Gordon Tullock’s Scholarly Legacy

November 24, 2020

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Trade, Power, and Political Economy

November 24, 2020

In Private Governance: Creating Order in Economic and Social Life, Edward Stringham explains that private ordering is sufficient to secure full exploitation of gains from trade within a society. After describing the logic of Stringham’s claim on behalf of private ordering, the remainder of this essay examines an enigma that Stringham’s argument entails: private ordering is sufficient for social coordination and yet public ordering is ubiquitous. The exploitation of gains from trade might offer a useful ideology, but this provides but an incomplete basis for a theory of society. In this respect, societies are rife with antagonism and envy, though these often manifest themselves ideologically as claims about justice and fairness. Politics goes where the money is; private ordering reveals

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American Democracy and the Problem of Fiscal Deficits

November 24, 2020

Most theorists of public finance treat budgeting as a technical problem centered on projecting revenues and expenses. In contrast, I treat budgeting as a political problem, with technical matters serving to obscure more than illuminate that problem. This essay starts by explaining why persistent budget deficits have little to do with technical matters because they mostly reflect the conflictual character of contemporary political economy. The rest of the essay probes this conflictual character by providing a conceptual framework grounded in the inherently complex character of fiscal systems, and with this complex character contrasting sharply with the image of simplicity advanced by most theorists of public finance. The key point I advance is that democratic budgeting, especially in large

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Who Was James M. Buchanan and Why Is He Significant?

November 10, 2020

This essay introduces a collection of 49 essays that exemplify the breadth and the depth of James M. Buchanan’s (1919–2013) contributions to economics in the post-war period. Buchanan started his career in 1948 as someone who wanted to provide a different scholarly framework for a theory of public finance and managed to do so. What resulted was a scholarly output that was published in 20 volumes in 2002, to which he continued to add until his death. The essays in this volume reflect the breadth and depth of Buchanan’s contributions to political economy and social philosophy. While these essays are written by people who admired and learned from Buchanan’s work, these are not essays in hagiography. They explore various questions and topics that interested Buchanan. A good number of these

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James Buchanan and George Stigler

September 2, 2020

I have been asked to compare James Buchanan’s body of work with that of George Stigler for a symposium on Stigler’s contributions to economics. I run my exposition through Frank Knight, who exerted strong though different forms of influence over both Stigler and Buchanan. Stigler’s oeuvre is largely an extension and refinement of Knight’s theory of perfect competition set forth in Risk, Uncertainty, and Profit, including Stigler’s effort to incorporate politics into the theory of perfect competition. In contrast, Buchanan tried to bridge the gap between Knight’s formulations of perfect and imperfect competition, while also emphasizing differences between markets and politics. Buchanan also tried to incorporate some of Knight’s repeated tergiversations about economic theory in relation to

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How Can Economics Enable Us to Better Understand COVID-19?

June 2, 2020

What can economic theory contribute to our understanding of the COVID-19 pandemic? Upon being asked this question, most people would doubtlessly give answers ranging between little and nothing. These answers would reflect the intuition that COVID-19 mostly presents problems for public health, for which knowledge of epidemiology and related medical fields would be of far greater relevance than knowledge of economics. Sure, one can recognize that COVID-19 requires budgetary appropriations and entails regulatory impositions; while these are necessary to deal with the pandemic, they are secondary to public health all the same. This type of response would surely describe most people’s intuitions. And there is no doubt that intuitions are often good guides to follow, as the idea of emotional

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Macroeconomics as Systems Theory

May 14, 2020

This book examines macroeconomic theory from an analytical framework provided by theories of complex systems, in contrast to conventional theories founded on aggregation. The resulting difference in analytical perspectives is huge: the macro level of society is not pursued through aggregation over micro entities. To the contrary, the micro-macro relation is treated as one of parts-to-whole, and this relation is approached from within an ecological scheme of thought. A society is a complex ecology of plans. That ecology, however, is not reducible to a single plan. 

Conventional macro theory presents a national economy as a collection of such aggregate variables as output, employment, investment, and a price level, and seeks to develop theoretical relationships among those variables. In

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Inequality within a system of entangled political economy

March 24, 2020

In Inequality: An Entangled Political Economy Perspective, Mikayla Novak takes the analysis of inequality in a new direction by exploring the tension between fact and value that pervades most analyses of inequality. Novak offers new insights into the entangled character of political economic systems. It is customary to treat those systems as operating independently of one another, but Novak recognizes that this customary treatment leads thought astray. Inequality is a fact of social life, and a useful one at that, though Novak also recognizes the problematic qualities that can stem from inequality, while also recognizing that some of those qualities are intensified and not softened by political action. The overall thrust of Novak’s Inequality is to generate a deeper understanding of how it

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Arrogance and Humility in the Governance of Human Interaction

March 19, 2020

Prevailing ideology holds that democracy is a system of government where people govern themselves. This ideology clashes with the unavoidable recognition that in any but small towns and villages governance is an activity wherein a few govern and the many are governed. This situation is an unavoidable feature of contemporary life with its elaborate and complex division of labor and knowledge. All of us are in the position of knowing a lot about a few things and little about most things. The central question Roger Koppl raises in Expert Failure is whether experts employ their expertise to the advantage of the general public or to the expert’s own advantage. Koppl advances strong reasons for being suspicious about the influence that experts exercise over the social organization of economic

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Governance within a system of entangled political economy

March 19, 2020

Economists necessarily use models in thinking about their material because there is no alternative given the complexity of the material we face. But through what kinds of models might we use to theorize about the problem of governance? There is a choice between theoretical frameworks in this respect. The most common framework is organized around an equilibrium allocation of resources. One major problem with this framework is that resources cannot allocate themselves, for only people can do that. And they do so through interacting with one another inside some institutional framework that governs those interactions. In consequence, this paper conceptualizes governance from within a framework of entangled political economy, in contrast to the standard framework of additive political economy.

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To Promote the General Welfare

April 24, 2019

Read the preface to the new addition by Richard E. Wagner.
Volumes have been written about the welfare state, covering everything from taxation and regulation to bureaucracy and Social Security. But what are the institutions that make such a state possible, and what alternatives exist to create a better outcome? First published in 1989 and now reprinted with a new preface from the author, To Promote the General Welfare explores this question and demonstrates that economic and political theory are inextricably linked.
In this book, Wagner suggests that the current welfare state results from an institutional framework in which governments, acting on behalf of dominant political coalitions, attempt to redistribute wealth through piecemeal welfare legislation. But this government intervention

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Buchanan's Liberal Theory of Political Economy

January 25, 2019

What does it even mean to identify and explore a tension within a scholar’s work? The range of explanations for the presence of tensions, and the consequences that might (or might not) flow from those different types, is covered by the preliminary remarks to Wagner’s essay. Tensions may be unrecognized problems, incoherence, or inconsistency problematic for an argument; but this does not exhaust the possibilities. They could reflect shifts in thought or, more fundamentally, dialectical elements, by nature refractory to treatment through simple, definitive assertions. Wagner discusses the use of aggregates in Buchanan’s treatment of the burden of public debt as an instance of a contradictory, problematic tension in Buchanan’s work. A contrasting, dialectic tension arises between two

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Federalism, Liberty, and State Preemption of Local Ordinances

July 25, 2017

The Supremacy Clause of the US Constitution (Article VI, Clause 2) asserts the right of federal legislation to preempt state legislation. This clause makes sense in light of the Constitution’s creation of a free-trade zone. Under the Articles of Confederation, the individual states were highly protectionist, as Jonathan Hughes set forth in The Governmental Habit. The Supremacy Clause gave the federal government the power to rescind protectionist legislation.
It has long been noted that “all politics is local politics.” This strongly held sentiment is not generally friendly to free trade. More precisely, it is friendly when free trade does not hurt local interests; otherwise, it is protectionist. Thus, we see general support for the principle of free trade, accompanied by myriad instances

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Book Chapter: The Tax State as Source of Perpetual Crisis

January 5, 2016

Publication

The term “tax state” originated in a controversy between Rudolf Goldscheid and Joseph Schumpeter over the treatment of Austria’s public debt in the aftermath of World War I. Goldscheid asserted that this debt represented a crisis for a state that relied on taxation. Schumpeter argued that the crisis was temporary and could be resolved by a one-time capital levy to reduce the debt, after which the state could resume its tax-based mode of operation. This chapter explains that Goldscheid’s analysis was more on the mark than Schumpeter’s, because perpetual crisis is a systemic quality of the admixture of private and collective property. Mitigation of this systemic crisis requires modification of political activity in relation to property rights, as illustrated by extending the principle that hotels are forms of city state.

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