Economists and the State

Economists and the State

What Went Wrong

Timothy P. Roth

Adam Smith is widely regarded as the ‘founder of modern economics’. The author shows, however, that Smith’s procedurally based, consequence-detached political economy, an approach shared by America’s Founders, finds no expression in the economist’s utilitarian, procedurally-detached theory of the state. This ‘wrong turn’ has meant that, if economists are ill-equipped to address an expanding federal enterprise in which utilitarian considerations trump the Smithian/Madisonian idea that means and ends must be morally and constitutionally constrained, they are also ineffectual bystanders as growing institutional skepticism, demands for ‘social justice’ and metastasizing rights claims threaten our self-governing republic.

Chapter 4: The Founders' republican self-government project derailed

Timothy P. Roth

Subjects: economics and finance, political economy, public choice theory, politics and public policy, political economy, public choice


JOBNAME: Roth PAGE: 1 SESS: 8 OUTPUT: Wed Apr 2 12:02:47 2014 4. The Founders’ republican self-government project derailed 4.1 THE HISTORICAL TRAJECTORY The Founders’ political economy and the Smithian/Kantian moral and political philosophy to which it was conjoined were, for many years, Americans’ guiding principles. The same cannot be said of modern America. I argue that, what Michael J. Sandel has called the public philosophy of contemporary liberalism (Sandel 1996) is both inconsistent with the Founders’ prior ethical commitment to the moral equivalence of persons, and corrosive of the Constitution’s ‘auxiliary precautions’; the restraints on self-interested factious behavior that the Founders sought both to institutionalize and to promote. This, in turn, has underwritten an expansion of the scope and reach of federal power and activity that would have been alien to the Founders’ imagination. As we saw in Chapter 2, because they embraced a theory of the right, the moral equivalence of persons, they rejected the utilitarian politics and economics of wants and needs that, today, informs both the conception and the execution of public policy. Instead, they emphasized the moral imperative to promote just, in the sense of impartial, institutions. Given their prior ethical commitment, the Founders sought, through a system of constitutional ‘auxiliary precautions’, to promote what John Rawls has called the fair value of political liberty (Chapter 2, this volume). Federalism, the separation of powers and the other constitutional restraints on majoritarian democracy were intended both to constrain discriminatory behavior and to promote respect...

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