The market for economic witchdoctors

Theologians, philosophers, art critics, meteorologists, cosmologists and geneticists often disagree ferociously among themselves. Yet few would want to dispute their credentials for that reason. Why then do disagreements among economists give rise to so much public indignation? One reason is perhaps unduly flattering to economists. It is the widespread wishful belief that there exists, away from the clamour of party politics, an impartial expert answer to difficult problems of public policy - a belief that is often held by party politicians themselves. Patients have a similar attitude to doctors, who often disagree as much as economists. But medical practitioners keep their divergencies out of the newspapers, especially where individual patients are concerned.

Professional economists often play up to the "impartial expert' view of their role by a clamorous insistence that their subject is, or should be, a science - an insistence that in no way prevents them from engaging in gladiatorial combat in front of the public with a ferocity that makes ordinary party politics seem like a children's game.

The formal way of proceeding would be to discuss whether there is or can be such a thing as positive economics - concerned only with what does happen or could happen in specified circumstances. The next stage would be to examine the value judgements that have to be introduced before policy conclusions can be drawn. An examination of economic controversies in the media or before parliamentary committees suggests, however, that this demarcation is far from easy to make. An alternative starting point is to apply elementary economic analysis to the problem, in other words to examine the market for economic controversies.

The first clue to understanding is that economists do not exist mainly to promote enlightenment, to discover how the economy works or for other such vague and worthy purposes. Like other producers, economists survive and prosper by studying the market and supplying what it appears to want.

At the academic level the main market is, of course, for learned papers. The contribution of such papers to economic understanding is one criterion by which they are judged. But it is not the only one, and it is a very elusive and intangible quality to assess. More important in practice tends to be "professional competence'. This is something rather different, involving the sophistication of the statistical and mathematical methods used, knowledge of, and references to, the previous literature, internal consistency and so on. It is much more important for a paper to be "competent' than for it to be right or enlightening.

Things could hardly be any different. When economists consisted of a small band of gentlemen scholars, as they did in the great age of David Hume, Adam Smith and Ricardo (and to a lesser extent up to the eve of the Second World War), it was possible to put great weight on general insight, and to allow room for a great variety of methods and approaches. With the explosive growth of the profession since the end of the Second World War and the need to fill hundreds of new teaching posts, an emphasis on technical competence in the narrow sense was probably the only way of keeping any sort of watch on standards; indeed, British economists have still to work out of their system a partially justified inferiority complex in relation to American professional techniques.

There is, however, one aspect of the market that is relevant both to the really ambitious academic aspirant and to the top-level economist pontificating before a parliamentary committee or a television screen. This is the well-known process of "product differentiation'. At the academic level prizes are to be gained by slightly differentiating one's theories and methods from those of other economists, while staying within the professional canons mentioned above. At the level of public debate the effects are more serious. For there is no doubt that leading economists can make a great, if superficial, impact by differentiating their advice as much as possible from that of their colleagues, and putting the emphasis on those points that they believe to be original rather than on the common elements on which most economists agree. This was symbolised by a cocktail party in Washington where one economist present remarked: "I have got some really smashing evidence to present to Congress tomorrow', but refused to discuss its nature in case he was pre-empted by someone else. It is easy enough to state the ideal qualities that should be exhibited in public pronouncements by an economist. He should first emphasise the areas and topics on which there is some consensus, then go on to the areas of disagreement, explaining as far as possible how far these are about cause-and-effect relationships and how far they involve differing judgements about political goals. At the end of such an exposition he might then tentatively offer his own contribution to the unresolved issues. Yet there is extremely little chance of this ideal being realised. (Nor can one claim that economic commentators have followed it any more than academics have.) Apart from anything else, it is simply not what the market wants. Three distinguished economists, Friedman, Samuelson and Krause, gave evidence on the same day in September 1971 to a US congressional committee on foreign trade and currency issues. There was an overlap of about 75-90 per cent both in their analyses and in their policy recommendations; and the three economists concerned did not particularly try to emphasise their differences. Yet the inevitably brief public reports concentrated almost entirely on the minor issue of whether or not a small "cosmetic' increase in the dollar price of gold would be a good thing. After all, it was this that constituted the news value of the hearings. (At that time the dollar was no longer convertible into gold; nor was any other major currency. But there was still an official gold price for the dollar, which was way below the market price and subsequently abandoned.) There is a deep seated ambivalence in public attitudes towards economists. While people delight in ridiculing them for their disagreements, they are also entertained by "original', "provocative' and controversial viewpoints; and a high price and some prestige can be gained by meeting this public demand. The key to understanding many economic pronouncements is that they belong at least as much to the entertainment as the information industry.

The original name of the subject "political economy' throws doubt on whether it can ever be entirely neutral politically in the sense demanded by some critics. But there is one kind of bias that is clearly undesirable. This is where economists make partisan points designed to provide ammunition not for their political beliefs but for the political party they favour - sometimes in opposition to their own more basic beliefs. This was particularly noticeable in the United States in 1971, for instance, when some pro-Republican economists defended the Nixon wage and price controls, while Democrat economists searched around for tiny niggling points of criticism - despite the fact that President Nixon moved much further in their direction than a Democrat president would have dared at the time. Bias of this kind is easy to dress up in respectable statistical form. But, again, simple condemnation is of little help. The market demand, when politicians consult economists, is partly for debating ammunition or for loaded prognoses of the movement of the economy.

Some economists steer admirably clear of anything resembling partisan debating points but succumb to temptation of a different sort. They are tempted to fall in with the latest fashion and to advocate, for instance, incomes policies or the replacement of reserve currencies by paper units. But there is also a sophisticated market for those who are prepared deliberately to go against fashion and deride what they believe to be conventional wisdom.

Unfortunately, economists of this latter brand are apt to change their opinions with such rapidity that any layman who tries to base himself on their pronouncements would soon feel bewildered and shellshocked. Indeed, one is often struck by the way in which the severest academic critics of the journalistic approach outdo all the journalists. Again, however, they are providing a service for which there is a definite demand.

Of course, not all the difficulties of economics can be attributed to the characteristics of the market or to confusions of presentation. There are major differences on some of the most basic questions of how the economy works. Would a much higher level of demand (with or without an incomes policy) lead to a virtuous circle of growth and lower prices, to growth alone or simply to an explosive and unsustainable situation culminating in "go-stop' and less growth rather than more? You can find learned pieces of econometrics to justify all these incompatible positions.

Technical economics has indeed remarkably little to say about the causes of the "wealth of nations' - and therefore about major questions such as Britain's decision to join the EEC. At the anniversary dinner of the Political Economy Club in 1973, Lord Robbins demonstrated that many contemporary arguments were already current in the early nineteenth century, and it is a myth to assume that they will be quickly resolved - any more by the importation of sociology today than by the importation of techniques from the physical sciences, from which so much was hoped, in the 1930s.

Back to political economy

A sense of perspective and of humour should enable us to cope with most of the anxieties about the status of economic arguments and those who take part in them. There are, however, two nagging doubts about professional economics as a discipline applied to policy into which it is necessary to go a little further.

It was one of the strong points of eighteenth-century political economy, as developed by David Hume and Adam Smith, that it started with human beings as they were rather than as some moralists thought they ought to be. The two thinkers were themselves moralists; but they accepted the legitimacy of self-interest, and they believed that the way to reconcile this with the general good was to devise a suitable framework of rules in which selfinterest was allowed to operate. A twentieth-century representative of this tradition - and hardly a rightwing Conservative - was Bertrand Russell, who declared: "If men were actuated by self-interest, which they are not except in the case of a few saints - the whole human race would co-operate. There would be no more wars, no more armies, no more navies, no more atom bombs . . . .' "Self-interest', even of the enlightened variety, is not perhaps the most felicitous term. The main assertion of the classical liberal is that the pursuit of self-chosen goals within an appropriate framework of rules is compatible with public harmony. These goals can be altruistic, aesthetic, religious or of any other variety. In the economic sphere it is rational for an altruistic businessman to work for high profits, along with his competitors - and perhaps to put even more effort into the process. His altruism will show itself in what he does with his gains rather than in his refraining from making them.

Nevertheless, the basic inclination of the early political economists to take human beings as they found them, and to seek rules that did not depend on a fundamental "change of heart', was very much their strong point. One may wonder how this approach developed into modern economics. This is a subject widely regarded as doubly unreal in assuming the possibility of a model world, yet one populated by unattractively consistent and cold-blooded people, always reacting in a predictable way to any given stimulus.

The transformation just caricatured was the natural result of the search for rigour and the growing professional isation of the subject at the academic level. Effort was devoted to asking what were the conditions under which the market process achieved not merely a rough harmony, but an optimum allocation of resources. Not surprisingly, these were found most unlikely to occur. One need only mention the existence of large spillover effects from many activities (such as private motoring) or unregulated urban development - in other words, costs and benefits imposed on others, which are not taken into account in an unregulated market. Nor is there anything in the least bit optimal about the distribution of income and capital brought about by the combination of market forces and people's differing initial endowments. These are only the most blatant cases. The mere existence of "economies of scale', or even the need for taxes on income or commodities, would prevent the optimum from being achieved. A little imagination - and mathematics - can always produce new and more subtle elements of fallibility in the working of the "invisible hand'. The result was a concentration of interest on how an ideal market would work and on a set of interventionist policy prescriptions for dealing with the numerous departures from it likely to occur in the real world. This viewpoint has been labelled by critics the "Nirvana' approach and is known more neutrally as "static welfare theory'.

It would be Luddite to decry the search for greater rigour. It is surely better that government intervention should be based on research rather than on ignorance. But unfortunately this more rigorous approach was achieved at a price. For it tended to assume that the relevant information about people's tastes and behaviour, about production techniques and so on, was (a) known to policy-makers, and (b) either unchanging, or changing in a predictable way. These are assumptions into which anyone is likely to be drawn who attempts to express economic relations in simple mathematical form and who attempts to make economic forecasts.

This approach has the defect of assuming away the main problems of economic policy. No human being or central institution (or computer) can hope to have the information - most of it is not easily reducible to statistical form - to work out an ideal distribution of resources or even a "second best' one. The role of the market is not to bring about an "optimum' but to act as a signalling device to enable information scattered among millions of people to be diffused through the community and to be used as a guide to action. Like all signalling systems, the market is of course capable of improvement.

There are in fact some promising developments in political economy which aim to remedy the defects of the Nirvana approach. Most of these have come from across the Atlantic (often building on foundations laid by Austrian economists, who do not always receive their due acknowledgement). These new approaches are only now beginning to penetrate into the United Kingdom, where they are still largely a closed book to many economic practitioners skilled in their own subject. Even in the United States they are not yet in the mainstream of teaching or of practice.

The one transatlantic development that has penetrated British consciousness has the unfortunate label, "monetarism'; and it is largely misunderstood either as a technical proposition about banking policy or as the view that "only money matters'. This is almost the opposite of the true monetarist position, which was expressed by John Stuart Mill when he wrote that "There cannot be intrinsically a more insignificant thing in the economy of society than money . . . Like many other kinds of machinery, it only exerts a distinct and independent influence of its own when it gets out of order.' There has been more than enough about such questions in previous chapters, and I would prefer to concentrate here on other transatlantic developments. There are at least five others of outstanding interest.

One of the most important for practical affairs is the analysis of markets as a discovery procedure in a world where tastes and techniques are changing and information scarce and expensive. This has immediate applications to labour markets and to the analysis of unemployment which are not revealed by either the conventional "demand management' (or "macro') approach employed at the Treasury or its critics in most of the public economic debate.

A second development is the analysis of property rights and the effects of their different allocations on the use of resources. It is worth emphasising that nearly all the adverse 'externalities', which are so often cited as arguments for political intervention, arise from the absence of clearly defined exclusive property rights or from the transaction costs of certain kinds of contracts. It is because no one owns the air space, pleasant vistas or the ocean bed that market disciplines do not apply, and exploiters and destroyers can escape without paying a price. Where the public authorities do in some sense "own' resources such as the nation's road space, they inflict untold harm by not behaving like owners and instead allowing "free', and therefore wasteful, use of scarce assets. It is not property rights but their absence that is antisocial. None of this implies, however, that the existing distribution of property rights is right.

The third important development relates to the economics of benevolence and charity, which has emphasised the distinction between privately chosen and seyish aims. The latter are in no way required for the successful functioning of markets, contrary to popular belief and some of the writings of the early economists.

A fourth contribution is the application of the theory of competition to the political market and to the struggle for votes and powers, as well as to the functions of state bureaucracy. Much British thinking on economic policy is rendered worse than valueless by a sharp contrast between the faults of real-world markets and the actions of some non-existing and improbable ideal, benevolent and omniscient government. Real-world markets, with all their faults, have to be compared with real-world politicians, civil servants, pressure groups and experts.

The fifth and to my mind most interesting trend transcends academic demarcation lines and is the work either of philosophers with a special interest in political economy, or of economists using their tools to tackle wider subjects. It aims to throw light on questions such as the "just' distribution of property rights (if there is such a thing), the permissible or required redistribution of income, the legitimacy of the coercion implied by majority voting and the tax and legislative power of the State.

The last two areas of study are of course intertwined and will be discussed further in the final chapters of this book. A preliminary result of this new thinking is to induce a little caution about the improvements that government is likely to bring - a caution, which unlike the old laissez-faire is in no way based on an idealised view of the private market place. A more far-reaching moral - easier to state than to observe - is that there is little point in preaching enlightened economic policies without asking: Who will carry them out, and under which incentives? Ultimately all reform is constitutional reform.

The forecasting delusion

But before we can move on to these matters there is one delusion that needs to be taken seriously. This is the identification of economic study in the public mind - and still more in the minds of politicians, officials and businessmen - with forecasts; and in particular with forecasts of the course of the whole economy of this country or even of the world. It would come as a surprise to many Whitehall officials and company chairmen to learn that the majority of economists have never made such a global forecast in their lives and are none the worse for that.

Nothing has done more to discredit serious economic analysis than its identification with the set of guesses about output, employment, prices, the balance of payments and so on which British chancellors have so often felt obliged to make, and which immediately became the subject of agonised debate among rival forecasting teams. When predictions of this kind are rendered ludicrous by events (e.g. the "world dollar shortage' which turned into a glut, the supposed ability of sanctions to destroy the Rhodesian economy within "weeks rather than months', or the unexpected runaway rise in unemployment in the winter of 1971-2,) the gibe about economic witchdoctors seems all too justified. Unfortunately, the cause of rational analysis of any kind receivers a body blow.

The fundamental error springs from the mistaken identification of scientific methods with prophecies about the future. It is not the task of the social sciences to engage in historical prophecy. The view that it is has been aptly labelled 'historicism' by Sir Karl Popper. (Historicism has been exploded in its 'scientific Marxist' version: the new style Marxists take their inspiration from the younger Marx and not from the arid prophetic economics of Das Kapital).But it is not generally appreciated that even the more mundane concerns of present-day economic punditry suffer from a milder form of the historicist distortion.

Like many distortions, historicism has its origin in a correct observation. This is that the physical sciences, which social studies have for so long tried to emulate, have predictive power. But what this argument overlooks is that scientific predictions are conditional. They assert that certain changes, such as an increase to a certain point of the temperature of water in a kettle, will, granted certain other conditions - for example a given atmospheric pressure - lead to a state that we know as "boiling'. But they cannot tell us whether the required conditions will be fulfilled.

Historical prophecies are unconditional scientific predictions. They can be derived from valid scientific theories if, and only if, they can be combined with correct assertions that the required conditions are in fact fulfilled. Sir Karl Popper, who has emphasised this crucial distinction, has pointed out that the requirements for successful longterm prophecies can be fulfilled only for systems that are "well isolated, stationary, and recurrent'. This happens to be approximately true of the solar system, which is why predictions of events such as eclipses of the sun are possible many years ahead. But contrary to popular belief such systems are not typical even of the physical world; and certainly not of the rapidly changing society of human beings.

One must be careful not to overstate the case. There are certain features of business cycles (or, more accurately nowadays, official policy cycles) that tend to be moderately repetitive and only partially dependent on unpredictable changes in, say, the state of technology or is the political colouring of governments. There is an analogy with the cycle of monarchy, oligarchy, democracy and tyranny observed by the ancient Greek writers which had some very modest predictive value as a scientific hypothesis.

It follows from this that attempts to forecast the short-term business cycle are less open to objection than the more ambitious attempts to forecast social changes at the turn of the century. There would be something to be said for starting with a theory of the typical business or policy cycle, and then asking in what respects the present cycle is likely to differ from the past. The second part of such an exercise would have to be impressinistic and subjective. The typical economic forecast is not, however, much like this. It is full-bloodedly historicist, in that it assumes that we have both sufficiently tested theories and enough knowledge of present and future conditions to made a determinate forecast. The criticism is not avoided in attaching an (almost wholly subjective) "range of error' to these forecasts. Either the range of error is ignored in practice, or it is found to be so large that the forecasts are useless for policy purposes. It would, for example, have been little comfort to ministers caught by surprise by the alarming increase of unemployment in the politically traumatic winter of 1971-2 before the Heath-Barber boom to be told that the delay in the unexpected economic upturn was well within the margin of error.

What, after all, were the topics with which the great economists from Adam Smith to Keynes concerned themselves? The main questions that Keynes sought to answer were not what would happen to the economy in 1937 or 1938 (although he was not above a little bit of journalism on the subject); his principal contribution to thought consisted in trying to discover what were the circumstances in which a private enterprise system would fail to provide reasonably full employment and what institutional changes might make such failures less likely. Earlier on he had asked the same question about the types of situation liable to lead to runaway inflation; and at the end of his life he was concerned with devising an international monetary system that would discourage recourse to trade restrictions, competitive devaluations and other unneighbourly behaviour.

None of this is meant as an attack on the use of statistical or econometric methods. But these will be more scientific - as far as the social sciences can be scientific - if they confine themselves to conditional hypotheses. It is, for example, very useful to examine (without prejudging the question) whether a systematic relationship can be observed between index of primary product prices, on the one hand, and the rate of domestically generated inflations and deviations of production from trend in the industrial countries, on the other. But an attempt to forecast world commodity prices over the next twelve months is a different matter. It involves assumptions about what domestic costs and prices in the industrial countries will actually do and the rate at which their output will grow. A conditional hypothesis can also reasonably assume average world weather conditions, and either no political disturbances, or none that is untypical of the period in which the hypothesis is supposed to hold; and there are a great many other things implicitly assumed to be given in conditional scientific predictions which are not given in the real world.

It is a wise principle to look for the elements of value as well as of error in methods of thought that are being criticised. There are such elements in the economic forecasting models. One of the main benefits from forcing someone to forecast, say, the national income and the balance of payments next year is that it imposes some consistency check on his separate individual beliefs. We cannot say what will happen. but a good forecasting model might enable one to say that certain events are impossible - or impossible without developments that have had no precedent.

The correct role for forecasting models is thus as one of many backroom research tools. But they do need to be displaced from the central position they have come to occupy in the thinking about the economy; and they are pretty worthless as a way of briefing ministers on their way into Cabinet meetings. A disadvantage of current orthodoxy is that many economists have acquired a vested interest in the existence of stable, discoverable numerical relationships between phenomena such as incomes and consumption, or short-run changes in the money supply and the price level, or exports and international price relativities, to name only a few. One cannot rule out the successful discovery of relationships of this kind; but, equally, one cannot guarantee it. Scientific method can still be applied to predict certain general features of an interacting system even in the absence of specific numerical relationships. Such procedures are commonplace, for example, in biology and linguistics.

Specific predictions are useful when they can be obtained. But even if they cannot be, some good generalisations are a good deal better than nothing. Indeed, the most important advice that needs to be given often involves extremely elementary economics of a "first-year' kind. It can for example be asserted with considerable confidence that a country cannot have a balance of payments problem if there is no convertibility of its currency into gold or other international assets, and if the authorities do not attempt to peg its rates in terms of any other national currency. But it may not be possible to predict - within a useful margin of accuracy - the numerical value of the exchange rates that will emerge between the dollar and other currencies once convertibility is suspended.

Again, however, the clue is to, look at the market. If economic advice concentrated on such elementary home truths, the need for employing large numbers of specialist advisers might be called into question. On the other hand, economic forecasting looks like a highly technical service, which permanent secretaries could hardly provide for themselves with the aid of a scribbling pad. No matter how often forecasts go wrong, the moral that is drawn is that one should continue to work to improve them.

One of the greatest difficulties of accepting the anti-historicist's view is that it means admitting that we know less about the future than some people, especially those in authority, would like. Characteristically, it is just the type of politician that is most scathing about official economic forecasts who asks me over the lunch table: "What do you think will happen to prices next winter?' - as if I, or .anyone else, had some mysterious intuition that could tell him the answer within a range of accuracy that would in any way be useful.

The real art of policy analysis is to work out the appropriate response to an extremely wide range of contingencies that are liable to occur. This could take two forms. One is the formal analysis of a great many contingencies with the aid of decision trees and other tools. I suspect, however, that these would turn out to be largely parade ground exercises, at least for major problems of economic steering. Second, and more promising, would be to work out broad rules which would as far as possible put the economy on an automatic pilot and minimise discretionary intervention. Such rules could never be entirely mechanistic, as they would always call for interpretation; and during any period of difficulty there will be a transitional stage before the rules can again be fully applied. Thus either approach to living with an unknown future is a great deal more difficult than proclaiming the rival merits of different exercises in historical prophecy. But it is also a great deal more worthwhile.

Value judgements

Finally, a word about the intrusion of political considerations into economic analysis. Economists who engage in partisan point scoring have little claim on our respect, but this does not mean that they can or should exclude political considerations from their serious work. Where the investigations of an economist lead him to certain political conclusions he has every right and even duty to promulgate them. Nor should he be deterred by fear of introducing "value judgements". Many apparent value judgements are susceptible to further analysis.

There is a strong but questionable emphasis in much modern academic writing on a strict distinction between "positive' social science - which is supposed to have no policy implications - and personal "value judgements'. The distinction was worth making to protect scholarly standards; but it has reached the point where it is doing more harm than good.

Admittedly, no "ought' judgement can be logically inferred from an 'is' statement; but it is extremely difficult to distinguish between the two kinds of statement in actual language. Most generalisations in the social sciences are a subtle blend of positive assertion and value judgements. Assertions about "efficiency', "cost', "consumer wants', "harmony', "real income', "economic welfare', "unemployment' or even demand for reserve currencies' usually embody both value judgements and generalisations about the world in a mixture that is very difficult to disentangle. All the above terms - of which "efficiency' is the most frequent - occur in objective tests administered to beginners in economics. It is unconvincing for orthodox economists to assert their scientific virginity when challenged by critics. They would do better to be less defensive, to accept that certain value judgements are involved in their own doctrines, and to come out into the open in their defence.

It is often supposed that, because value judgements cannot be scientifically established, rational discussion of them is impossible. They are usually assumed to emanate mysteriously from governments, or electorates, or the individual economist himself. The ultimate reason why we can argue fruitfully about many value judgements has been given by Professor A. K. Sen. Value judgements can be divided into two types, "basic' and "non-basic'. A basic judgement is one that applies in all conceivable circumstances. If circumstances can be envisaged where it would not apply, it is non-basic. Take the statement, "Men and women should be allowed to dress as they like.' This may appear an ultra-liberal basic judgement. But if the person who utters it flinches when asked, "Even if it turned out that mini-skirts caused cancer in the eye of the beholder?' then it is non-basic.

The fundamental point is that, while it can sometimes be shown that a particular judgement is non-basic, there is no way of demonstrating that a judgement is basic. In Sen's words, "No one would have occasion to consider all conceivable factual circumstances and to decide whether in any of the cases he would change the judgement or not.' Where we have not had to face a concrete choice, we may simply not know what our real values are.

The approach of moving to and fro between principles to case studies and back again is probably the best way of proceeding in these matters, and it is used implicitly even by writers who claim to be following other methods. The best that one can hope for from such studies is not rigid rules, but some conscious presumptions, guidelines and maxims which may be better than the unconscious ones that guide those who vainly suppose that they are "examining each issue on its merits'.

References and further reading

One of the few textbooks that take into account the role of markets as a discovery procedure, the existence of altruistic motives and the importance of property rights is: A. A. Alchian and W. R. Allen, Universitv Economics (Prentice-Hall International Paperback Edition, London, 1974).

On historicism and scientific method, see Sir Karl Popper, The Poverty of Historicism, 2nd edn (Routledge, 1960).

A concise statement of Popper's views can be found in "Prediction and Prophecy in the Social Sciences', Conjectures and Refutations, 4th edn (Routledge, 1974).

For a critique of the view that economics consists in the discovery of stable numerical relationships, see the first two chapters of: F. A. Hayek, Studies in Philosophy, Politics and Economy (Routledge, 1967). See also 1. Kirzner, Competition and Entrepreneurship (Free Press, New York, 1973).

On value judgements, see A. K. Sen, Collective Choice and Social Welfare (Oliver and Boyd, 1970).

On property rights, see E. Furubotn and S. Pejovich (eds), The Economics of Property Rights (Ballinger, Cambridge, Mass., 1974). See also A. Alchian et al, The Economics of Charity, (Institute of Economic Affairs, 1974).