November 24
Done
Remembering Svetozar Pejovich (1931-2021)

Remembering Svetozar Pejovich (1931-2021)

April 2, 2021
 
I’m late to the memorialization of Svetozar Pejovich, who passed away about a month ago.
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Steve Pejovich was a lucid exponent of the property rights approach to economics. For a taste of his mastery, see his classic 1972 paper with Eirik Furubotn entitled "Property Rights and Economic Theory: A Survey of the Literature." As of this writing, it has over 2,200 citations on Google Scholar.
They discuss the problem of discretionary activity in firms with attenuated property rights, corporate governance, the behavior of companies under regulation, non-profit organizations, and socialist firms (a topic that Pejovich and Furubotn explore in greater depth here).
Like many in the property rights tradition, Steve's work seemed to be driven by a voracious curiosity to understand the world around him. In this, he modeled the "student"—rather than the "savior"—approach to studying society. His curiosity seems to have been borne of his own experiences under socialism.
To learn more, check out this fascinating interview he conducted for Econlib. My favorite part is when he expresses surprise that he was capable of getting a B- on an undergraduate macroeconomics exam (and perhaps a touch of annoyance that he did so well...) After all, like other good economists in this tradition, Pejovich understood and had internalized Alchian's famous comment: "There is no such thing as macroeconomics." Or, as Roger Garrison might put it: “There are macroeconomic questions, but only microeconomic answers.”
Edit 6/21/24: For more Pejovich, see Rosolino Candela’s reflections.
Candela writes:
“Herein lies the fundamental lesson that we can draw from Pejovich that is particularly relevant to the rising appeal of socialism today. Socialism can be neither liberal nor democratic because (1) the right to private property is a social liability, not a private privilege, and (2) the essence of classical liberalism is the denial of all legal and political privileges. The conflation of property with privileges conflates the physical assignment of a good with the assignment of consequences of one’s choices exercised over that good, the latter of which is the fundamental purpose of private property—namely, to tie consequences to one’s action. However, socialism in any form implies, by definition, that a ruling elite, whether autocratic or democratically elected, has the privilege to intervene in the allocation of resources without bearing the full consequences of their decision making. Such a lack of accountability to the demands of one’s constituency is, by implication, also inherently undemocratic.”