Praxeology and public choice theory both provide tools for understanding human action within specific domains. While praxeology is the study of human action in general, public choice theory focuses on the behaviour of individuals in non-market decision-making environments, especially in political settings.
Human Action and Political Decision-Making:
Individuals act purposefully based on their preferences and the information available to them. This tenet doesn't just apply to market interactions but also to political ones. Public choice theory, inspired by this idea, analyzes political processes as aggregations of individual, purposeful actions where voters, politicians, and bureaucrats all pursue their self-interests.
Limits of Rationality and the Knowledge Problem:
In the political sphere, no single entity (like a central planner or regulator) can possess all the necessary information to make perfect decisions. Public choice theory recognizes these limitations and highlights the inefficiencies and unintended consequences that can arise in political decision-making.
The legality of the use of "force, coercion, and compulsion" was once considered absolute; however, the media, social media, and unelected bureaucracies use of censorship removes the ability for voters to retain informed choice, which, although unethical, has only been successful in election interference due to their size, influence, and power.
Incentives in Non-Market Environments:
While markets provide clear financial incentives for efficient performance, the incentives in political arenas are different. Reelection prospects are more motivating for politicians than effective policy outcomes, and budget maximization may take precedence over service efficiency in government. Public choice theory delves into these altered incentive structures.
Concentrated Benefits vs. Dispersed Costs:
Policies can often benefit a concentrated group significantly while imposing smaller costs on a large group. This dynamic is central to public choice theory, which examines how such policies (e.g., tariffs or special interest legislation) can get enacted even if they're detrimental to the broader public.
Democracy and Individual Choices:
Every reputable economist has been skeptical of the idea that democracies always lead to optimal outcomes, given the knowledge problem and the potential for majoritarian tyranny. Public choice theory expands on this skepticism by examining how individual choices in a democratic system might not aggregate to the societal optimum. According to Lord Tytler, the scottish historian the average survival of a democracy is about 200 years, " After two hundred years, the nations collapse due to various economic policies and be followed by dictatorship".
The Role of Institutions:
Institutions matter. The rules governing political interactions (like voting systems, bureaucratic structures, or checks and balances) significantly shape outcomes. The praxeological emphasis on deliberate action informs public choice theory, which investigates how various institutional configurations can produce different outcomes in policy-making.
The "Romantic" View of Government:
While some view government as a benevolent, omniscient actor working for the public good, public choice theory, grounded in praxeological principles, offers a more sober assessment. It recognizes government actors as individuals with their own sets of incentives, constraints, and information limits.
Praxeology, with its focus on purposeful human action, forms a solid foundation for public choice theory. This integrated view offers a more nuanced and realistic understanding of political decision-making and its outcomes. There is a great saying "There are those who think the government is here to help, then there are those that know how to "think"."
From the author.
The opinions and statements are those of Sam Wilks and do not necessarily represent whom Sam Consults or contracts to. Sam Wilks is a skilled and experienced Security Consultant with almost 3 decades of expertise in the fields of Real estate, Security, and the hospitality/gaming industry. His knowledge and practical experience have made him a valuable asset to many organizations looking to enhance their security measures and provide a safe and secure environment for their clients and staff.
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