What criterion should we use to evaluate political theories and the institutions they advocate? In my book Robust Political Economy, I argue that it is the criterion of ‘robustness’. Institutions that meet this criterion are those best placed to cope with fundamental constraints that arise from the human condition. The most important constraints are those of limited rationality (the Hayekian ‘knowledge problem’) and the recognition that human beings respond, at least to a limited degree, to incentives. Judged against these constraints all human institutions are likely to ‘fail’, but some institutions may be better placed than others to withstand the stresses and strains wrought by the human condition.
I’m enjoying Mark Pennington’s superb book at the moment and I’ll blog about it more fully shortly.