Trade, Power, and Political Economy: Reason vs. Ideology in Edward Stringham's Private Governance

22 Pages Posted: 12 Feb 2016

See all articles by Richard E. Wagner

Richard E. Wagner

George Mason University - Department of Economics; George Mason University - Mercatus Center

Date Written: February 12, 2016

Abstract

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 targets that public ordering subsequently exploits. The challenge for political economy is to integrate the autonomy of economizing action with the autonomy of political action, for these dual autonomies provide the crucible out of which emerges the material of political economy. Stringham has deepened our appreciation of what private governance can accomplish, but much unfinished analytical work confronts theorists of political economy.

Keywords: externalities as profit opportunities; pretense of knowledge; crooked timber of humanity; prisoners’ dilemma mythology; power as mass phenomenon

JEL Classification: B40, D60, D70

Suggested Citation

Wagner, Richard E., Trade, Power, and Political Economy: Reason vs. Ideology in Edward Stringham's Private Governance (February 12, 2016). GMU Working Paper in Economics No. 16-02, Available at SSRN: https://ssrn.com/abstract=2731505 or http://dx.doi.org/10.2139/ssrn.2731505

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

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HOME PAGE: http://mason.gmu.edu/~rwagner/

George Mason University - Mercatus Center ( email )

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HOME PAGE: http://ppe.mercatus.org/scholars/richard-wagner

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