Concepts

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Bureaucracy


Decentralised ordering - sounds contradictory
Jurisdiction is a strategy that distinguishes between who makes a decision and what is the correct decision to make. 

To deal with the knowledge problem of power we should decentralising jurisdiction down to those who have local knowledge that central organisations lack.

Bounded individual and social discretions ( freedom has to be limited to the level of knowledge the individual has)


Prof Randy Barnett: All societies have to solve 3 categories of social problems; these are problems of: knowledge, interest, & power

Problems of knowledge

how to put scarce resources to use, including our own bodies (Co-ordination)

Personal knowledge

(own personal perception and preferences) even people in the same room have different perception of same events. Other people do not have access to this knowledge.

Local knowledge

  • More available, but not everyone knows it cant be in two places at one time 
  • IF PEOPLE WANT TO PURSUE HAPPINESS, THEY HAVE TO BE ABLE TO ACT ON THIS KNOWLEDGE.
  • BUT THEY HAVE TO ACT ON IT IGNORANT OF KNOWLEDGE THAT EVERYBODY ELSE HAS
  • Price system is the way we incorporate our plans into everyone else's plans
  • Assumes we all want to get along but determining whats mine and what is yours.
  • Property is a decentralised jurisdictional strategy

Problems of interest

Not everyone wants to do the right thing - we all favour ourselves over others - we are not impartial

Good people will sleep well at night knowing that millions will be in trouble and die overnight, but tell them that they will lose the tip of their finger in the morning they will not sleep well at all.

When you decentralise jurisdictions to individual and association level you departmentalise and limit the scope of partiality

(Prof. Barnett: decentralising jurisdiction reduces the scope that impartiality can adversely affect decisions)

Problems of power


Appeal of central control


Hyacks order of actions 2 ways actions may take place, temporally, and spacially.
This can lead to central ordering or decentralised ordering.

Centralised ordering - appealing here's where it works
  • First type of ordering we grow up with. First form of existence is socialism.
  • Military is centralised ordered
  • Business firms centrally ordered
It is wrong to generalise from the good things central ordering that central ordering is always good.
Central orderers can't gather all the knowledge we have


Teaser:
As central powers go up, local power goes down
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