With Andrew Farrant
Chapter 5, pp. 108-134, in Peart, S. and D.M. Levy, eds. 2008. The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism. University of Michigan Press.
Abstract: Crampton and Farrant (2005) argue that, given self-interested agents, the impossibility of socialist calculation proves a boon for citizens of the socialist state as it prevents perfect extraction by the central planning apparatus. Robust political economy seeks to guard against worst-case outcomes by establishing models based on worst-case assumptions. Consequently, when we accept a robust motivational symmetry based on self-interested agents, calculational efficacy forms the appropriate worst-case complementary assumption.
Encyclopedia entry pp. 983-985 in Clark, D., ed. 2007. Encyclopedia of Law and Society, Sage Publications.
Co-authored with Andrew Farrant.
Review of Austrian Economics, 19:1 (2006). Published version available here
Abstract: The Austrian calculation argument suggests that inability to engage in economic calculation worsened outcomes in socialist states. We suggest that this is hardly the case. When Austrian assumptions of benevolence are relaxed, inability to engage in economic calculation prevents the non-benevolent planner from fully extracting all available surplus from the citizenry. Consequently, when planners are non-benevolent, calculation ceases to be a relevant argument against the desirability of central planning; its normative force reverses absent benevolent planners.
A comment by J. Robert Subrick on Relaxing Benevolence.
Review of Austrian Economics, 19:1 (2006). Published version available here. Comment available here with Subrick's kind permission.
Robust political economy begins with assumptions of self- interested planners who lack perfect information. In such a world, the social planner does not necessarily outperform the decentralized outcome. Crampton and Farrant (2005) argue that the inability to engage in economic calculation reduces the ability of social planner to extract consumer surplus. Thus, the lack of calculation improves the welfare of the median citizen which contrasts with conventional wisdom. We argue that they overstate their results. First, the calculation argument fails because of its underdevelopment, not because of the empirical record. Second, the welfare implications cannot be adequately addressed by assuming diminishing marginal utility of income or using the median welfare standard. Third, robust political economy has not developed a model that yields meaningful welfare comparisons. Thus, robust political economy remains in its early stages.
With Andrew Farrant
Review of Austrian Economics, 19:1 (2006). Published version available here
Abstract: Subrick takes issue with some points made in Crampton and Farrant, "Relaxing Benevolence". We agree with Subrick that robust political economy remains in its early stages. We address Subrick's critique that the empirical record cannot speak to the success or failure of the calculation argument. We also argue that our results are not contingent on unwarranted assertions of either a median-utility welfare metric or of a strongly diminishing marginal utility of income. The median is the appropriate welfare measure where an outlier -- namely, the perfectly-extracting planner -- causes the mean to be an unrepresentative population statistic. Even under a mean utility framework, only the mildest of diminishing marginal utility of income is necessary to cause us to question the desirability of the perfectly-extracting planner.
Co-authored with Andrew Farrant.
Constitutional Political Economy, 15(1) (March, 2004)
Those with subscriptions to Constitutional Political Economy can access the published version here.
Abstract: Brennan and Hamlin (2002) note that expressive voting still holds at the constitutional phase. The argument, when taken to its necessary conclusion, proves quite problematic for constitutional Political Economy. Veil mechanisms following Buchanan induce expressive voting at the constitutional phase, removing the normative benefits ascribed to the hypothetical unanimity principle at the constitutional phase. If the constitution is authored by a small group and the veil is thereby removed, instrumental considerations come to bear and the authors of the constitution establish themselves as Oligarch.
Co-authored with Donald Boudreaux.
In Who Rules the Web?, Cato Institute, 2003.
Abstract: E-commerce may prove a double-edged sword for antitrust enforcement. While the internet massively increases the potential size of the relevant market for any antitrust investigation, thereby reducing the need for antitrust activity, it also opens firms up to protectionist uses of antitrust by foreign authorities using an economic effects rule for jurisdiction. An origin-based policy of regulation is recommended.
Co-authored with Donald Boudreaux.
The Independent Review, Summer 2003.
Abstract: Proponents of the concept of false consciousness argue that the phenomenon is most evident in the most important choices that people make, such as choices over occupation and marriage. We argue to the contrary. Economic analysis leads us to expect false consciousness in low consequence, low decisiveness environments. Individuals may find it rational to hold false beliefs only when the marginal private cost of holding those beliefs is low. False consciousness therefore is more likely to be found in the theories of academic social critics than in the subjects of their criticism.
Journal of Private Enterprise, Fall 2002.
Abstract: While several cross-sectional studies (La Porta et. al. 2002, Norton 2002) examine institutional and cultural determinants of economic freedom, changes in economic freedom remain unexamined. I find changes in voter preferences for economic freedom to be a significant determinant of changes in economic freedom in a panel of 25 OECD countries. The voter preference measure is robust to several alternative specifications, including the addition of institutional variables.
Edited with Tyler Cowen
Edward Elgar and The Independent Institute, 2002
From the Edward Elgar website:
Recent years have seen the development of new theories of market failure based on asymmetric information and network effects. According to the new paradigm, we can expect substantial failure in the markets for labor, credit, insurance, software, new technologies and even used cars, to give but a few examples.
Market failure at the microeconomic level may even create or aggravate macroeconomic disturbances. Despite the importance of the new theories, no systematic critical examination has been available, until now. Market Failure or Success brings together the key papers on the subject, including classic papers by Joseph Stiglitz, George Akerlof and Paul David, along with powerful theoretical and empirical rebuttals. The rebuttals challenge the assumptions of the new models and question the usual policy conclusions. Examination of real markets and careful experimental studies fail to verify the new theories.
Copies of the introduction are available on request. Email me at eric.crampton@canterbury.ac.nz .
