The Natural State

March 2, 2012 at 11:09 am (By Amba)

Promoting this from the comments on the last post—it’s an idea I’ve wanted to inject into the political conversation for ages. It seems to me this is a vital notion and ought to be common knowledge. It helps a great deal in thinking clearly about economics and politics.

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realpc said,

March 2, 2012 at 6:38 am

  1. The best way to make things fair is to allow competition. The problems we have right now are partly because Wall Street and the US government work together, instead of being in competition. So there is nothing to prevent them from being corrupt.

  2. mockturtle said,

    March 2, 2012 at 10:46 am

    The problems we have right now are partly because Wall Street and the US government work together, instead of being in competition.

    Yep!

  3. amba (Annie Gottlieb) said,

    March 2, 2012 at 11:02 am

    Double yep!

    Although I don’t think the government, by definition, can compete. In practice, that would turn into controlling/regulating. That’s the only kind of adversarial relationship it seems government and private enterprise can have. And deregulation or regulation loopholes then become one kind of favor the government has to sell.

    This idea seems really important to me: Nobel Prize-winning economist Douglass North on “the Natural State.” North says “limited-access” social orders, which we would see as cronyism (capitalist or otherwise) and the monopolizing of power by self-perpetuating elites, seem to be the natural way for large societies to organize themselves, and “open-access” social orders, which allow access by merit and are protected by competition, are a rare achievement. Once you grasp this idea, it becomes very clear how an open society is always tending to almost gravitationally revert back to the natural state. Once you see that inertial trend at work in our own society, you see what amazing tools the founding fathers gave us to fight it, but you also see how much vigilance and ingenuity must be employed in using those institutions to keep open access pried open as the heavy door keeps falling shut.

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