The literature of comparative economics as well as economic history is replete with references to productivity differences as reflecting relative efficiency in production. In socialist economics, for example, the longevity of the relative-productivity/relative-efficiency theme is apparent from Abram Bergson's early survey where, commenting on a productivity debate that had already been going on for over twenty years, he identified “the only issue outstanding” as the question “which is more efficient, socialism or capitalism?” The issue has continued to be addressed vigorously (...) since then, and it is still outstanding. Again, in European economic history, John Nye recently pointed out that relative efficiency as reflected in relative productivity has been part and parcel of the postwar debate on French industrialization: the view that less productive and, therefore, “inefficient” family firms led to French “backwardness” in production. (shrink)

Why do people expend resources to vote in large-number situations where the probability of their affecting the outcome is close to zero? In a recent article, Geoffrey Brennan and Loren Lomasky argue provocatively that Adam Smith's The Theory of Moral Sentiments not only predicts such behavior, but further predicts that people “frequently” vote for outcomes that cost them more than they would individually be willing to pay. In other words, in the relevant environment, they claim that individuals will systematically express (...) false preferences for costly outcomes they “really” do not want. I submit that a fair reading of TMS in fact provides no basis for their view; if anything, TMS suggests the opposite. (shrink)

John Nye feels that one of my two brief specific references to his work “leaves the impression that my work downplays the problems of individual differences in taste or social institutions by dismissing them out of hand”. Let me assure him that he is unduly alarmed, since virtually all readers will read into the passage that he quotes only what I intended and, indeed, what Nye himself intended - that if he or anyone else had found evidence that firm size (...) mattered for productivity, this would be taken as evidence of inefficiency. This is especially clear because in the previous paragraph I took note of Nye's own review of the extensive literature that argues that “less productive and, therefore, ‘inefficient’ family firms led to French ‘backwardness’ in production”. (shrink)