Oct 28, 2011

R.I.P. William Niskanen (1933-2011)

William Niskanen was a towering figure in the field of Public Choice. He died on Wednesday. Here there are some comments about him and his work. 
From the NYT:
Mr. Niskanen (pronounced nis-CAN-en) had a long career as an economist, both in and out of government. He taught at the University of California at both Berkeley and Los Angeles, worked as a defense analyst at the RAND Corporation and held prominent positions at the Office of Management and Budget, where he was assistant director, and at the Defense Department, where he was the director of special studies for the secretary of defense.
Mr. Niskanen, who stood 6-foot-4, was rarely one to tailor his message to his audience. A few years after joining Ford in 1975 and becoming its chief economist, he was critical of the company when it ended its longtime commitment to free trade and pushed for restrictions on Japanese imports. Mr. Niskanen contended that the real challenge to the domestic auto industry came not from Japan, but from the inability of American carmakers to cater to the public’s desire for smaller, more fuel-efficient vehicles. He also thought it inappropriate for corporations to ask Washington for breaks. “A common commitment to refrain from special favors,” he wrote in a memo at the time, “serves the same economic function as a common commitment to refrain from stealing.”
His criticism did not sit well with Ford and it fired him.
This is one of his papers that is being discussed in some blogs -- "Limiting Government: The Failure of Starve the Beast", it is nicely written, substantial and to the point. This is the conclusion:
If our political system then leads to decisions that roughly reflect voter preferences, the longer-term challenge for those of us who favor limited constitutional government is to try to convince voters to reduce their demand for the services financed by federal spending. Until that time, some increase in federal taxes appears to be a nec- essary part of a fiscal policy to balance the budget.
The interesting graph in the paper:
 R.I.P William Niskanen

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