Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

On nationalizing private property and the present value of dictators

  • 25 Accesses

  • 1 Citations

Conclusions

The empirical and theoretical results in this paper cast doubt upon the explanation of socialism advanced by Gifford and Kenney. The empirical finding that socialism is inversely related to the degree of political instability is directly contrary to the prediction of their model.

Further, we have argued that their major theoretical justifications for their theory are inconsistent with the stated objective of the decision maker; a command economy is not the necessary result of a revenue-maximizing government. Beyond this, we might also point out that the notion of a revenue-maximizing ruler seems to be an inadequate characterization of socialist leaders.

While we have disagreed with Gifford's and Kenney's conclusions, the central question is still important: why is socialism such a successful system given what appear to be such obvious allocative and productive inefficiencies? If only by way of a survivorship type test, socialism is in some sense ‘efficient.’ However, what it is producing is still open to debate. We have found the explanation suggested by Hayek and Friedman to be consistent with the evidence.

This is a preview of subscription content, log in to check access.

References

  1. Ball, R. (May 28, 1984). Eastern Europe pays off some bank loans. Fortune: 168.

  2. Friedman, M. (1962). Capitalism and freedom. Chicago: University of Chicago Press.

  3. Gifford, A., and Kenney, R.W. (1984). Socialism and the revenue maximizing Leviathan. Public Choice 42: 101–106.

  4. Gordon, L., Blignaut, S., Moroney, S., and Cooper, C. (February 1978). A survey of race relations in South Africa: 1977. S.A.: South African Institute of Race Relations.

  5. Hayek, F.A. (1944). The road to serfdom. London: George Routledge and Sons.

  6. Lott, J.R. (March 1978). Nationalization loses. Reason 9 (11): 14.

  7. Lott, J.R. (1984). Education, democracy, and the cost of government wealth transfers. Texas A&M University Working Paper.

  8. Schwarzenberger, G. (1969). Foreign investments and international law. London: Stevens & Sons.

  9. Steiner, H.J., and Vagts, D. F. (1976). Transnational legal problems: Materials and text, second edition, Mineola, N.Y.: The Foundation Press, Inc.

  10. Taylor, C.L. (1983). World handbook of political and social indicators, third edition. New Haven: Yale University Press.

Download references

Author information

Additional information

This paper was largely done while both authors were at UCLA. The authors would like to thank Adam Gifford and Roy Kenney for their discussions.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Lott, J.R., Reiffen, D. On nationalizing private property and the present value of dictators. Public Choice 48, 81–87 (1986). https://doi.org/10.1007/BF00239563

Download citation

Keywords

  • Decision Maker
  • Theoretical Result
  • Public Finance
  • Empirical Finding
  • Private Property