CAPITALISM,SOCIALISM AND CALCULATION

The merits and demerits of what we call ‘capitalism’ have been a source of much attention since Adam Smith wrote his seminal treatise on the salutary effects of free commerce and before. We consider the criticisms of the capitalist system as stated most prominently by Karl Marx, and we evaluate Marx's proposed solution to the evils of capitalism – specifically, socialism. We also explore the contributions of Ludwig von Mises and Friedrich Hayek to the debate about whether Marx's proposed alternative was really an alternative. Mises and Hayek provide powerful critiques of Marx's socialist vision by addressing the problem of economic calculation and the inability of central authorities to acquire knowledge diffused and distributed across an entire society. We question whether Marx offered a solution and then consider more recent attacks on capitalism and its alleged destruction of cultural capital. The theoretical contributions of Mises and Hayek are supported by recent empirical contributions suggesting that liberal political economy is robust.     

RECENT DEVELOPMENTS IN THE THEORY OF NATURAL MONOPOLY

Abstract. This paper examines two important recent developments in the theory of natural monopoly, or more generally the theory of market structure. The first is a series of papers, involving Baumol with various co-authors, investigating the theory of industry structure, whilst the second is particularly associated with the names of Shaked and Sutton, and the relationship they develop between product differentiation and industry structure. The paper surveys and to some extent contrasts these two new approaches.
Baumol et al. 's contribution is seen to be in the area of clarifying the concept of natural monopoly, refining the definitions of multiproduct costs, and developing a notion of social efficiency applicable to industries where economies of scale are important. Shaked and Sutton employ a new definition of natural monopoly unrelated to market size and utilize information about consumers'income distributions to develop their notion of vertical product differentiation and natural oligopoly.     

PRICE DISCRIMINATION: A SURVEY OF THE THEORY

Abstract. The purpose of this survey is twofold. First, it introduces the reader to recent developments in the theory of price discrimination. Simultaneously, the exposition aims at being self-contained and accessible to the non-specialist reader. The paper is structured around Pigou's distinction between perfect, second-degree and third-degree price discrimination.     

THEORIES OF NON-PROFIT INSTITUTIONS

Abstract. As thoughtful modelling and empirical research of non-profit enterprises continues to grow, two general views of non-profit organizations are emerging: one view is that non-profit firms are inefficient and wasteful; another view is that non-profit firms are a response to market failure, and, thus, may improve efficiency. The purpose of this paper is to explore the theoretical and empirical work that represents the current divided state of thinking in this area.     

ECONOMIC RECESSIONS,BANKING REFORM AND THE FUTURE OF CAPITALISM1

In the 2010 London School of Economics and Political Science Hayek Memorial Lecture, the author argues that flaws in the design of the monetary and financial system were responsible for the global financial crisis and the subsequent recession. The crash reflected the unsustainable nature of the bubble induced by artificial credit expansion created by fractional‐reserve banking under the direction of central banks. Such boom–bust cycles will continue until radical reforms are implemented, including a 100% reserve requirement for demand deposits.     

THEORIES OF CHOICE UNDER IGNORANCE AND UNCERTAINTY

Abstract. In this paper, Knight's distinction between risk and uncertainty, and its significance for economic analysis are examined. The paper consists of a survey of some recent developments on the theory of choice under uncertainty and some applications of these theories to problems for which Bayesian Decision Theory has not proved entirely satisfactory. Two problems are examined in detail. The first is that of finance and insurance and the second is that of risktaking behaviour with special emphasis on lotteries.     

GAME THEORETIC MODELS OF MIXED OLIGOPOLY

Abstract. In this paper we review various models that have been proposed for the study of mixed oligopoly, that is markets in which private and public firm compete on equal basis using only market instruments.     

INSPECTING THE FOUNDATIONS OF LIBERALISM

Liberal justice is rooted in a system of conventions. They arise spontaneously as behavioural equilibria that bring mutual advantage to those adopting them. They protect life, limb, property and the pursuit of peaceful purposes, and require the fulfilment of reciprocal promises. Collective choice, where some impose choices on others who submit, violates liberal justice and reduces the set of freedoms. Liberalism and democracy are incompatible as organising principles and 'liberal democracy' is a contradiction in terms.     

THE EMERGENCE OF LIBERAL SOCIALISM IN CONTINENTAL EUROPE1

Socialism has repeatedly failed to match the accomplishments of capitalism, and yet it refuses to die. At the beginning of the twenty‐first century, a new type of socialism, ‘liberal socialism’, is growing in Europe. The rise of liberal socialism has been marked by the erosion of two key institutions of capitalism, private property rights and the freedom of exchange. Unlike communism, which used brute force to replace private property rights and free exchange with state ownership and central planning, liberal socialism focuses on redistributing wealth, creating entitlement programmes, supporting labour unions and promoting ‘fair’ trade.     

COACHING COSTS AS TULLOCK COSTS: A MODEL OF RISING COACHING SALARIES

Escalating sports coaching costs have strained budgets at many universities. This paper analyses these expenditures as a form of Tullock Costs ( Tullock, 1967 ). In this framework the money the universities receive is spent on recruiting top talent, so the schools receive little, or no, monetary gain under current scholarship rules.     

THE EFFECTS OF ECONOMIC REGULATION IN THE ISTANBUL TAXICAB MARKET

This paper discusses the regulation of the Istanbul taxicab market and its consequences. While price and entry regulations are common to many taxi markets, there are significant differences in their institutional frameworks. We examine the problems of the Istanbul market and offer recommendations to improve its efficiency.