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Libertarian women’s history month: Elinor Ostrom

1 Apr

Elinor Ostrom (August 7, 1933 – June 12, 2012)  the first woman to win the Nobel Memorial Prize in Economic Sciences (shared with Oliver E. Williamson), is also one of the most iconoclastic thinkers to win it.  To date, she remains the only woman to win The Prize in Economics.

Ostrom lived in BloomingtonIndiana, and served on the faculty of both Indiana University and Arizona State University. She held the rank of Distinguished Professor at Indiana University and was the Arthur F. Bentley Professor of Political Science and Co-Director of the Workshop in Political Theory and Policy Analysis at Indiana University, as well as Research Professor and the Founding Director of the Center for the Study of Institutional Diversity at Arizona State University in Tempe. She was a lead researcher for the Sustainable Agriculture and Natural Resource Management Collaborative Research Support Program (SANREM CRSP), managed by Virginia Tech and funded by USAID. Beginning in 2008, she and her husband Vincent Ostrom advised the journal Transnational Corporations Review.
Ostrom was born Elinor Claire Awan in Los AngelesCalifornia, as the only child of Leah (born Hopkins) and Adrian Awan. Her father was Jewish, while her mother was Protestant. She attended a Protestant church and often spent weekends staying with her aunt, one of her father’s sisters, who kept a kosher home. Her parents were poor.
Ostrom graduated from Beverly Hills High School in 1951 and then received a B.A. (with honors) in political science atUCLA in 1954. She was awarded an M.A. in 1962 and a PhD in 1965 in political science, both at UCLA.  She married political scientist Vincent Ostrom in 1963.
In 1973, Ostrom and her husband founded the Workshop in Political Theory and Policy Analysis at Indiana University. Examining the use of collective action,trust, and cooperation in the management of common pool resources (CPR), her institutional approach to public policy, known as the Institutional analysis and development framework (IAD), has been considered sufficiently distinct to be thought of as a separate school of public choice theory. She authored many books in the fields of organizational theorypolitical science, and public administration.
Ostrom’s early work emphasized the role of public choice on decisions influencing the production of public goods and services. Among her better known works in this area is her study on the polycentricity of police functions in the Greater St. Louis areas. Her later, and more famous, work focused on how humans interact with ecosystems to maintain long-term sustainable resource yields. Common pool resources include many forests, fisheries, oil fields, grazing lands, and irrigation systems. She conducted her field studies on the management of pasture by locals in Africa and irrigation systems management in villages of western Nepal (e.g., Dang). Her work has considered how societies have developed diverse institutional arrangements for managing natural resources and avoiding ecosystem collapse in many cases, even though some arrangements have failed to prevent resource exhaustion. Her work emphasized the multifaceted nature of human–ecosystem interaction and argues against any singular “panacea” for individual social-ecological system problems. Her intellectual curiosity led her to study local public economies—in particular the municipal provision of police services, the management of water supplies, fisheries, forestry, and development in the less-developed world. Her framework of analysis builds from a model of humanly rational choice to a historically grounded institutional analysis. She studies the rules that govern the behavior of individuals in their interactions both with nature and with one another.
Ostrom identified eight “design principles” of stable local common pool resource management:
  1. Clearly defined boundaries (effective exclusion of external un-entitled parties);
  2. Rules regarding the appropriation and provision of common resources that are adapted to local conditions;
  3. Collective-choice arrangements that allow most resource appropriators to participate in the decision-making process;
  4. Effective monitoring by monitors who are part of or accountable to the appropriators;
  5. A scale of graduated sanctions for resource appropriators who violate community rules;
  6. Mechanisms of conflict resolution that are cheap and of easy access;
  7. Self-determination of the community recognized by higher-level authorities; and
  8. In the case of larger common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level.
These principles have since been slightly modified and expanded to include a number of additional variables believed to affect the success of self-organized governance systems, including effective communication, internal trust and reciprocity, and the nature of the resource system as a whole.

Much of the last century of political and economic discourse has been dominated by a debate between advocates of perfect markets and perfect central planners. The latter strove to demonstrate market failure, then would insist that government would provide the necessary corrective. Ostrom was one of the core thinkers in the social sciences to say, “Hold on. Markets may fail, but government solutions also might not work.” One must always remember that Elinor and Vincent Ostrom are foundational contributors to the theory of Public Choice. But the Ostroms went further than simply demonstrating the possibility of government failure.

Ostrom and her many co-researchers have developed a comprehensive “Social-Ecological Systems (SES) framework”, within which much of the still-evolving theory of common-pool resources and collective self-governance is now located.
According to the Norwegian Institute for Urban and Regional Research, “Ostrom cautioned against single governmental units at global level to solve the collective action problem of coordinating work against environmental destruction. Partly, this is due to their complexity, and partly to the diversity of actors involved. Her proposal was that of a polycentric approach, where key management decisions should be made as close to the scene of events and the actors involved as possible.”
Ostrom was a member of the United States National Academy of Sciences and past president of the American Political Science Association and the Public Choice Society. In 1999, she became the first woman to receive the prestigious Johan Skytte Prize in Political Science.
Ostrom was awarded the Frank E. Seidman Distinguished Award for Political Economy in 1998. Her presented paper, on “The Comparative Study of Public Economies”, was followed by a discussion among Kenneth ArrowThomas Schelling and Amartya Sen. She was awarded the John J. Carty Award from the National Academy of Sciences in 2004, and, in 2005, received the James Madison Award by the American Political Science Association. In 2008, she became the first woman to receive the William H. Riker Prize in political science; and, the following year, she received the Tisch Civic Engagement Research Prize from the Jonathan M. Tisch College of Citizenship and Public Service at Tufts University. In 2010, the Utne Reader magazine included Ostrom as one of the “25 Visionaries Who Are Changing Your World”. She was named one of Time magazine’s “100 Most Influential People in the World” in 2012.
The International Institute of Social Studies (ISS) awarded its Honorary Fellowship to her in 2002.  In 2009, Ostrom became the first woman to receive the prestigious Nobel Memorial Prize in Economic Sciences. The Royal Swedish Academy of Sciences cited Ostrom “for her analysis of economic governance”, saying her work had demonstrated how common property could be successfully managed by groups using it. Ostrom and Oliver E. Williamson shared the 10-million Swedish kronor (£910,000; $1.44 million) prize for their separate work in economic governance.
The Royal Swedish Academy of Sciences said Ostrom’s “research brought this topic from the fringe to the forefront of scientific attention…by showing how common resources – forests, fisheriesoil fields or grazing lands – can be managed successfully by the people who use them rather than by governments or private companies”. Ostrom’s work in this regard challenged conventional wisdom, showing that common resources can be successfully managed without government regulation or privatization.  In the history of political economy the source of social order has been attributed either to the invisible hand of market coordination (Adam Smith) or the heavy hand of state control (Hobbes). Perhaps one of the best ways to understand Elinor Ostrom’s work is to see it as working out a Hobbesian problem by way of a Smithian solution. That is perhaps a bit of a stretch but not by much. Her work on local public economies and common-pool resources focuses on actual “rules in use” (as opposed to the “rules in form”) that decentralized individuals and groups rely on to make decisions and to coordinate their behavior in order to overcome social dilemmas. It yields an optimistic message about the power of self-governance to succeed even in difficult situations. As my colleague Alex Tabarrok put it, Ostrom sees how, through various voluntary associations, groups transform the common-pool resource situation from a “tragedy of the commons” to an “opportunity of the commons.”

When she became the first woman to win the Nobel, the managing editor of The Progressive magazine fretted that she was being identified as a libertarian, and asked her about it.  I’m not sure her answers were what he was hoping for:

Q: What’s your stance on privatization and property rights?
Ostrom: I don’t equate them. So, and in the Nobel speech I state this very clearly, at an earlier juncture we thought that property rights meant one right and only one right: the right to sell. That was what I learned in graduate school, and that was the dominant thinking. As we were doing massive analysis of what people were doing out there in the field, we found many people who did not have the right to sell but had managed well. Many groups are able—if they can have management and decide who is in and who is out—to do very well, even if they can’t sell. They still have property rights.  In some places, privatization has worked well. I’m not anti-it. I’m anti-it as a panacea.
Q: Libertarians have tried to co-opt your work by saying it shows the unsuitability of large-scale, top-down economic arrangements.
Ostrom: A question is: How do we change some of our governance arrangements so that we can have more trust? We must have a court system, and that court system needs to be reliable and trustworthy. The important thing about large-scale is the court system. For example, you would not have civil rights for people of black origin in the United States but for a federal court system and also the courage of Martin Luther King and others—people who had the courage to challenge, and a legal system where, at least in some places, the right to challenge was legitimate.
We have a colleague working in Liberia. You had thugs recruiting young kids until recently. Having a legal system that does not allow thugs to capture kids, torment them, and make them use weapons is very important.
Q: Your getting the Nobel Prize in Economics is significant in that you’re the first woman to win it.
Ostrom: I hope it’s more for my work than my gender. I was thrilled, I was honored as a woman, having fought a lot of my life against the presumption that women would not be professionals. I think that’s changing. We now have more women graduate students in the social sciences. There were a number of women last year who received the Nobel, and so that was a good sign to the future. I don’t think it will be very long, and there’ll be another woman. Maybe even this year. Who knows?

Her colleagues at Indiana University described Ostrom as “humble and hardworking,” and another Nobel Prize winner, Vernon Smith, calls her a “remarkable scholar” with a passionate drive to understand human societies in all their variety. A former president of the Public Choice Society and the American Association of Political Science, Ostrom is also one of the most beloved teachers in academia. The Workshop in Political Theory and Policy Analysis at Indiana University that she co-directed with her husband, Vincent, is perhaps the ideal model for a research and graduate education center.

Traditional economic theory argues that public goods cannot be provided through the market. Traditional Public Choice theory argues that government often fails to provide solutions. Ostrom shows that decentralized groups can develop various rule systems that enable social cooperation to emerge through voluntary association.

A point that sometimes trips up readers is that Ostrom often focuses on situations where the technology of parceling property into private plots does not exist. In these situations she studies collective, but non-State decision-making over common-pool resources. While private-property solutions are not employed in such cases, the “rules in use” that do operate accomplish what private property would have accomplished. We find rules that limit access and that make individuals in the group accountable for their misuse of the resource. We also find enforcement of those rules. In short, the analyst must be willing to look at both the form and function of rules in a variety of social situations.

Ostrom was diagnosed with pancreatic cancer in October 2011 and died of the disease on June 12, 2012, at the age of 78. She was survived by her husband, Vincent Ostrom, though he died later that same month. On the day of her death, she published her last article, “Green from the Grassroots,” in Project Syndicate. Indiana University president Michael McRobbie wrote: “Indiana University has lost an irreplaceable and magnificent treasure with the passing of Elinor Ostrom”.

Roger Stone, LBJ, and Public Choice Theory: Notes from my homework

20 Nov
I’ve recently been in a graduate school course that surveys both microeconomics and public choice theory, which led me to observe that the standard critique of voting proferred by some libertarians  is actually a simplifying, and perhaps overly simplistic and fallacious, model of reality, in much the same way the neoclassical model of perfect competition is.  (Though to be sure, paedagically useful in demystifying democracy.). Voters, like consumers, exist outside of time or at a point in time, performing a function statically; there is no discovery process, learning, ignorance, asymmetric information.  Voters are like the neoclassical price taking producers, whose actions have no effect on outcomes.

I once asked one of my favorite frenemies, reason editor Katherine Mangu-Ward, if her critique of voting (derived from the work of economist Bryan Caplan and others), wasn’t arithmetically and logically unassailable, and yet false and irrelevant.  It’s not voting that is worthwhile, but campaigning:  it’s an empirical issue of whether 100 hours or $1000 donated to reason magazine, or the Mercatus Center (where public choice theory is articulated), or to a candidate or referendum calling for ending the drug war, stirs more people to rethink the issues.  The critique of voting abstracts from candidates, canvassing and campaigning, just as the neoclassical model of perfect competition leaves out innovating firms, consumers discovering new needs, desires, goods and services, entrepreneurs discovering new factors of production, etc.

Which leads me to wonder if public choice theory has also been over simplifying things.  I don’t know since after years of reading articles about it, or even hearing James Buchanan speak (to my senior high school math class actually, long ago), I’ve only just started reading it.  But I am struck by how in initial formulations the public choice theorist analyzes her “market” of interactions between voters, politicians, bureaucrats, and special interest groups, and simplifies the way they actually behave.

For example, there are “profit-making” behaviors of politicians that seem to be left out of introductory public choice discussions, in which politicians are simply described as lying for votes and buying votes and donors by stealing from taxpayers to give out subsidies.  I am struck by how this model leaves out two or three major aspects of politician behavior.

The first is how politicians create barriers to entry for competitors, from ballot access laws, character assassination by digging up dirt on potential rivals, and above all, by amassing a huge war chest in a candidate PAC so that no one will waste time running against them.  A politician doesn’t need to buy votes if instead you buy donors who fund such a huge war chest that no serious rival will emerge even if voters don’t approve of you.

Second is how politicians and political assemblies themselves are examples of the regulatory capture public choice economists use to describe bureaucracies.  Recently there has been a lot of evidence that the stock portfolios of elected officials always outperform the market, because they possess insider information about what laws and policies they will promulgate that change the values of firms and stocks.  Aren’t legislatures themselves now bureaucracies that are captured by a politically connected subset of the investor class, who will always inflate the currency to keep stock prices up, and pass laws that favor the stocks they invest in, knowing that those stocks will be favored by their legislation?

And then there is assassination, the ultimate barrier to entry, which Roger Stone now tells us LBJ committed (he also used the FCC to enrich his wife).  How do these large, historically specific, institutional features of particular national political processes fit into public choice theory?

Robert Caro Sins By Omission

Robert Caro

By Roger Stone

As my book The Man Who Killed Kennedy: The Case Against LBJ has become an Amazon Top 100 best seller (# 18 at this writing) I have been asked again and again how Lyndon Johnson’s definitive biographer Robert Caro could have missed LBJ’s role in an assassination plot.

Yet, Caro’s masterful biography is flawed. There were two enormous scandals surrounding LBJ in the fall of 1963. One involved Secretary of the Senate, Bobby Baker, once described by Johnson as “my strong right arm” and the other involved the Texas wheeler-dealer, Billie Sol Estes. A review of news coverage of both scandals reveals substantially more column inches dedicated to coverage of the Billy Sol Estes scandal, yet nowhere in his biography does Caro even mention Sol Estes. Perhaps this is because Baker never testified against Johnson and served his prison sentence without comment while Billie Sol Estes served his prison term but later testified before a grand jury detailing Johnson’s role in the murder of U.S. Agriculture Department official Henry Marshall and President John F. Kennedy. Sol Estes also wrote to the Justice Department outlining the serial murders committed by LBJ. Time for Robert Caro to ‘fess up.

TO READ MORE go to: The StoneZone

To order the Man Who Killed Kennedy – The Case Against LBJ,
by Roger Stone with Mike Colapietro —
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