Upon dropping some books behind my book shelf today and thus stumbling on some long-forgotten tomes, I came up with an idea that I think would be interesting to pursue here within the Locker Room.
Here it is: I?d like as many LR contributors as possible to recommend a book they value that other contributors and readers would likely learn from and enjoy. Perhaps this could set the stage for the return of our lapsed Shaftesbury Society Book Club ? though this would involving drafting George Leef into taking on the additional responsibility, again, and I understand he?s plenty busy right now.
OK, perhaps not. In any event, think tankers ought to be perusing important works just as a matter of course, so here?s my recommendation for a little light bedside reading, which I will hope prompt others to follow suit.
The book is Structure and Change in Economic History by Douglass North. A Nobel winner in economics, North specializes in the history of economics. Structure and Change is one of his more readable works, but serves to illustrate his breadth of knowledge and his willingness to examine difficult issues about how markets and states developed rather than simply formulate a pristine theory and then pick out some random and selective historical facts to support it.
Here?s a couple of gems. One of his chapters begins this way:
The existence of a state is essential for economic growth; the state, however, is the source of man-made economic decline. This paradox should make the study of the state central to economic history: models of the state should be an explicit part of any analysis of secular changes. But while the long path of historical research is strewn with the bones of theories of the state developed by historians and political scientists, economists traditionally have given little attention to the issue.
You also can?t go wrong by having to confront (though not necessarily endorse) North?s concise definition of a government:
. . . A state is an organization with a comparative advantage in violence, extending over a geographic area whose boundaries are determined by its power to tax constituents. The essence of property rights is the right to exclude, and an organization which has a comparative advantage in violence is in the position to specify and enforce property rights … One cannot develop a useful analysis of the state divorced from property rights.
Importantly, North discusses and distiguishes ?contract theories of the state,? such as John Locke?s, from ?predatory or exploitation theories.?
The book is challenging but rewarding. It was published in 1981 by Norton.
