Volume 17, Issue 1

This paper analyzes classical concepts of division of labour and offers some contemporary theoretical model which includes causes and effects of it. For Smith, the main cause is a tendency of human nature to exchange and the main effect is a progress of the country. For Marx, the fundamental cause is historical development of productive forces and effects are accumulation of capital on the one side but also an alienation of working class on the other. Spencer considers as the main cause specialization of functions in generally, which consequence is integration of society. For Durkheim, causes are social density and volume, and its effect or function is new interconnection in society known as term organic solidarity. Weber derives division of labour from his theory of rational economic actions, and its most important effect is development of occupational structure.

Virtue ethics proposes a set of seven—four pagan virtues and three Christian—as a roughly adequate philosophical psychology. Hobbes tried to get along with one virtue, prudence, to which Rawls added a veiled virtue of justice. Nussbaum’s Frontiers of Justice adds the virtue of love. But in criticizing Rawls, she enunciates a “Nussbaum Lemma,” that is, a good society is unlikely to arise from over-simple models of ethical life. Since virtuous, flourishing societies are what we wish, we had better insert the virtues, as she puts it, “from the start.” James Buchanan's constitutionalism, for example, solves moral hazards in a Nussbaumian world, but leaves hanging the ethical start. To start a project ending in constitutional citizenship—or human capabilities, or justice as fairness, or a Leviathan state, or the categorical imperative, or the greatest happiness of the greatest number—we need already an ethical actor, embodying the seven principal virtues.

Thus far, psychological input has been used in economics mainly to highlight the cognitive imperfections of market participants. The normative implication of behavioral economics in its current state is that imperfections of market participants should be rectified by psychologically informed regulators. However, regulators are themselves imperfect actors with limited cognitive capacities. I propose some biases and illusions documented by cognitive psychologists that may be relevant to the political economy of government regulation.

An important literature exists on bureaucracy. It deals with economic and political consequences. Many scholars analysed these particular organizations and different schools of thought provided their own interpretation of bureaucratic phenomena. Mises’ theory of bureaucracy is known as being an important contribution from the Austrian economics school. However, the political dimension of his works on bureaucracy is less known. This article proposes an analysis of such a dimension.