He was a student of Milton Friedman’s at Chicago. From there he migrated by way of Berkley to The Pentagon where he helped Robert McNamara introduce cost benefit analysis to The Defence Department however the experience was disillusioning. He found lying so pervasive that when some years later the government announced the success of the Apollo mission to the moon he found himself momentarily doubting whether in fact the mission had in fact taken place! Later he resigned from a position at Ford when that company lobbied the government to make the import of Japanese cars more difficult, saying:
“A common commitment to refrain from special favours…serves the same economic function as a common commitment to refrain from stealing.”
According to his obituary in The Daily Telegraph
“as an academic economist Niskanen was best known for his contributions to public choice theory, a field that examines the choices made by bureaucracies based on the assumption that public officials, like private sector businessmen, [italics supplied] generally act [or fail to act- comment supplied!] In their own self-interest.”
This certainly explains interesting- and disturbing- phenomena that I observed when I was in South Africa in the spring of 1989. At that stage the absurd regulation of apartheid were being dismantled. But at the same a host of new regulations ostensibly designed to reduce the health hazards of smoking were being introduced. The bureaucrats concerned may well have genuinely believed that they were acting in the public interest- and perhaps they were- but it was also all too obvious that crusade against smoking providing them with a justification for imposing new regulations to make up for the ones they had been forced to abandon. It would be interesting to know whether anything similar happened in the southern states of The United States after the end of the Jim Crow Laws- which also discriminated against blacks.
I am neither an expert on Professor Niskanen nor his work, but I was once privileged to hear him speak. I think that he had flown down from George Mason to Duke University, where I was then studying, and addressed an audience assembled by the Economics Department- to talk about- the death penalty.
I remember a distinct sense intellectual excitement and anticipation in the audience before he spoke, perhaps because we were then more used to discussing the death penalty in the context of politics or even of theology- easy to do on a campus so dominated by its chapel as that at Duke- But what, I wondered, had economics to do with the death penalty?
In Niskanen’s view quite a lot.
He argued that the death penalty could be shown to have saved lives. He explained that the early studies that concluded that the death penalty did not have a deterrent effect had been flawed. They had compared data from states which did not practice the death penalty with those states in which the death penalty was legal. The problem being that several of the states in which the death penalty was still legal did not in fact ever use it. This meant that comparisons between states in which the death penalty was illegal and those, in which the death was legal but never used, tended to underestimate its deterrent effect. Criminals- he argued- in those states in which the death penalty was still on the books but never employed would hardly be likely to be deterred from committing murders by a penalty that they knew they would not suffer.
(Described with the advantage of hindsight all this appears obvious, but in Lockean terms it was in fact no small achievement to break the customary association between the death penalty and its legal status which ultimately what was being discussed)
Instead, Niskanen argued, the correct approach to the problem was to find out what deterrent effect each individual execution had? I remember being intrigued at this point, although I immediately realised how complicated such an analysis must have been and wondered how it had been done. Niskanen never explained these practical matters, but in employing the method he did he revealed himself to be a true exponent of the Chicago school with its emphasis on empirical research. I for one found myself flattered to be taken so to speak inside his thought process as he closed on the answers that he was seeking.
This impression was reinforced as he proceeded. His first analysis of the data suggested that the death penalty had a considerable deterrent effect and saved (as I remember this first figure about 8 lives.) This had struck Niskanen as being an improbable result, and consequently he had rechecked the data, and done everything he could to improve the methodology of the study and once more interrogated the computer (in those days of course computers being lumbering objects into which one fed stacks of punch cards) and discovered that each execution in The United States saved between twelve and twenty lives!
I am not sure now that I am happy with either Professor Niskanen’s method or his the conclusion suggested by his study. Of course I still relish the shrewdness with which he spotted the flaw in the early studies that denied deterrent effect to the death penalty; I admire the elegance of his alternative study was designed; and I enjoyed the skilful way in which he lectured to an unsympathetic audience.
Nevertheless I now doubt that he was right. My sense is that it is not the severity of the punishment but the chance of apprehension and conviction which prevents crime- although I might be told by a social scientist that in this I am deluded. More troubling though I am uncomfortable with an argument which seeks to justify the death penalty by reference to the number of executions regardless of whether or not those executed were in fact guilt or not. The trouble with what I take to have been Professor Niskanen’s argument is that it seems to work equally well if those who are executed are only believed to have been guilty by other potential criminals.
I can think of no more potent a justification for state sponsored injustice.
Is it not potentially disastrous to justify the death penalty by an argument which is ambivalent about whether or not the person executed is in fact guilty? With hindsight it seems to me that this moral and political failure of the sort of reasoning that Professor Niskanen employed reveals the weakness of the kind of exclusively empirical argument so loved by the Chicago school. (In Lockean terms the danger is that once the association between the death penalty and its legal status had been broken-see above- then the risk exists that link between the death penalty and guilt will also be broken.)
While I am now unsure of the kind of argument in which Professor Niskanen was such a master;I have no doubts about him. He was a man of high principle, powerful intellect, skilled in his discipline, a fine speaker, and a notable teacher with a commanding physical presence. It is no surprise to learn that he was widely regarded as one of the most honest men in Washington. May he rest in peace.
William Niskanen, born March 13 1933, died October 26 2011.