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Ted Burczak honored as Robert C. Good Fellow

Ted Burczak, professor of economics has recently been named to the Robert C. Good Faculty Fellowship Program.

Ted Burczak, professor of economics has recently been named to the Robert C. Good Faculty Fellowship Program. Under the program, which is named for Denison University’s 16th president, a tenured faculty member is released from all normal teaching and advising responsibilities for one semester, in order to provide opportunities to advance major scholarly or other creative projects. The awards are competitive, and their number is limited. Burczak intends to couple the semester’s leave in spring 2015 supported by the fellowship with an anticipated sabbatical during the 2015-16 academic year to complete a book manuscript, provisionally titled Hayek, Coercion, and Labor, in the area of the history of economic thought.

Burczak says that “in his book The Constitution of Liberty, F.A. Hayek develops the germ of a powerful normative idea, one that a variety of progressive social thinkers might embrace. He argues that a progressive society aims to reduce private coercion as much as possible, understanding private coercion to exist when one person serves as the instrument of another person’s will while participating in a relationship from which it is hard for the coerced to exit.

However, Hayek’s notion of coercion is inadequately developed because it is based on economic theory that does not sufficiently escape the paradigm of perfectly competitive markets. In particular, Hayek understands the typical employee-employer relationship in a capitalist market economy to be voluntary, rather than coercive, because he believes employees generally have other employment options: in the typical case, serving as the employee of a particular employer is relatively easy to exit.

At least two important strands of twentieth century economics have challenged this picture of the labor market, one deriving from the tradition of radical political economy (springing from Marx) that contends that capitalism requires a “reserve army of the unemployed” in order to operate efficiently and the other deriving from the work of Keynes that maintains that capitalism is prone to financial crises that can sometimes produce an economy-wide shortage of jobs.

In different ways, both traditions of economic thought challenge Hayek’s understanding of wage labor to involve non-coercive relationships. After explaining these challenges to Hayekian thought, the book will explore policy solutions to reduce labor market coercion that might conflict with or stretch Hayek’s advocacy of government policy limited by the rule of law, which he argues restricts government programs to redistribute income and property and to conduct discretionary macroeconomic stabilization policy. The book makes the case that Hayek has the right normative principle—minimization of coercion—but applies it using the wrong economic theory—an underlying vision of competitive labor markets—to reach misguided free market policy conclusions.”

Posted Date: 
Tuesday, April 1, 2014