Moral free riding

Garrett Cullit

AGRICULTURE AND THE STATE: MARKET PROCESSES AND BUREAUCRACY

This paper_considers the politi_cal econ~my of agriculture and the implications for economic analysis. In doing so, four topics are ad~ ressed. First, problems o~ pi:ivat~ choice are c?ntras!ed with_ those encountered in collective choice. Second, the "market failure" ra! 10nale for govern~ent red1~tnbut10~ progr~ms m agnculture 1s contrasted with "rent seeking". Third, implications of information and •?cen~1ve p~blems inherent m ~ollecllve ch~1ce are e~lored. ~e subjective nature of cost is shown to be important in economic regulation, mclud1n~ cost of produc!1on as a basis for agncultural price supports. Finally, the results of the analysis are related to the work agenda of agncul!ural econom_ists. The Robbin_sian maximization approach is contrasted with radical subjectivism. If information about mea~s and ends ~s assumed given,. the economic proble~ ~ecomcs computational. The challenge is to develop economic analyses that proVIde ~ore s_at1sfactol):' explan_a!1ons of human behaVIor m a world of uncertainty, where outcomes of plans differ from predictions. ~on_o~ic efficiency stud1_es tra_d111onally have ~ocuse~ on outcomes of the market process. However, since costs and benefits arc subjectiv~, 11 IS argued th~t effic_iency 1s more appropnatel_Y Judged by_the process through which transactions are carried out than by the results. lnsights from public choice theory and neo-Austrian economics are held to be important in improving the institutional framework in public policy analysis

Agricultural Economists and the State

Agricultural economists, going back to the Roosevelt New Deal era, have a long legacy of supporting government intervention in the farm sector. Although policy economists have increased criticism of farm programs since World War II—particularly price support programs—there remains a substantial amount of support for government intervention in U.S. agriculture. The role of the USDA in funding policy research in agriculture tends to influence both the views of policy economists and the extent to which they express judgment in favor of liberalization of farm policies. Government farm programs provide work opportunities so that USDA-funded policy analysts have an incentive not to question the economic legitimacy of programs analyzed. State and local farm commodity interests also exert pressure on policy analysts who propose policy liberalization. In short, many policy economists today are critical of farm commodity programs but a vocal minority defends them. Even free-market agricultural policy economists, touting “positive science,†often fail to express judgment when analyzing farm commodity programs. Moreover, in analyzing “market failure†as a basis for conservation and other non-commodity farm programs, agricultural policy economists frequently implicitly support intervention by ignoring problems of “government failure.â€agricultural policy,policy economists,policy analysis,economic liberalization,research funding,government intervention.