Vernon Smith and Polycentric Law

by Aneirin last modified 2013-08-07T20:59:03+00:00
On Vernon Smith's Nobel Prize lecture and an interesting Edward Stringham paper.

Economist Vernon L. Smith is known as the developer of "experimental economics", a field in which researchers attempt to employ traditional experimental methods to market scenarios (rather than creating models and evaluating them with historical data). Despite the usual skepticism among many Austrian Schoolers of empirical testing in the social sciences, Smith himself has argued that experimental economics actually affirms several major Misesean hypotheses.

And some Austrians have endorsed experimental economic methods; Ryan Oprea and Benjamin Powell do so in the paper "Why Austrians Should Quit Worrying and Learn to Love the Lab". I myself am a proponent, although I do not identify with the "Austrian" label for a variety of reasons which I shall not focus on here.

In any case, Dr. Smith won the Nobel Prize in Economics (the "Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel") in 2002, and interestingly, his lecture on pages 529-32 discusses the emergence of polycentric legal practices. It's too long to effectively excerpt here, but after having read it, I found a citation to it in a paper by Edward Stringham in which Stringham describes Smith as "the first private-property anarchist to win the Nobel Prize". I couldn't find any other information on this by Googling, but given the credibility of the author and reviewers of the piece, it may well be correct.

Aside from that particular claim, I think the growing popularity of experimental economics illustrates a general principle for anyone in the heterodoxy who wishes to influence mainstream economics; namely, to work within it, and phrase one's ideas in its language.