Don Boudreaux On The Copenhagen Consensus

Don Boudreaux has another must-read post with links on the Copenhagen Consensus process that Bjorn Lomborg is heading up. I particularly like his conclusion:

The ultimate goal is to decentralize decision-making power as much as possible down to individuals. It’s at the individual level that cost-benefit calculations are most accurately made; it is at the individual level that the most important “to do” lists are formulated, pursued, adjusted, and achieved.

3 thoughts on “Don Boudreaux On The Copenhagen Consensus

  1. Don Boudreaux is wrong in the statement you quote. Some decisions are more accurate at the individual level, but decisions get less and less accurate as you move them closer to the individuals. There are any number of examples. If *all* decisions were individual, what would prevent (for example) robbery?

    Don Boudreaux has no business pretending to understand or teach decision theory until he understands the Tragedy of the Commons. It’s only been out there, in plain sight, for about 35 years.

  2. Eric,

    I disagree. I interpret Don’s point as being that individuals have better knowledge about their own preferences, goals, objectives, conditions, skills, and costs, whether they are producers, consumers, or neighbors in a community. Hierarchical decision making that ignores that local knowledge can decrease the likelihood of achieving either static or dynamic efficiency. Furthermore, it is precisely in the process of making such decentralized decisions that we actually *learn* our preferences, skills, costs, etc. That’s the sense in which markets are a discovery process.

    I don’t understand your point about “tragedy of the commons”. TOTC is a result of ill-defined property rights, and I think the incentives for individuals in the face of an open access property regime are pretty obvious.

  3. Prof. Kiesling is correct. Boudreaux (and Lomberg) are merely arguing for letting the decisions be made at the point where the most knowledge will be brought to bear. The Tragedy of the Commons is that the most useful knowledge is NOT being used.

    The areas where markets don’t work are very few–so called “public goods”–and far between. No one is calling for “*all*” decision making to be private. Only those decisions where the benefits exceed the costs (which, admittedly, is most of the time).

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