The free rider problem is why governments are terrible

Currently reading: Structure and Change in Economic History by Douglass North.

A few quotes and notes:

…the free rider accounts for the stability of states throughout history. (North, 31)

It is almost always less costly for an individual to do nothing, even in the face of oppressive systems (of various kinds). To take this as an empirical, and not a normative question–when can we expect to see institutions change for the better? North says adjustments only happen when private returns exceed private costs, otherwise the free rider problem will prevent change. Thus, changes at the margin matter.

We also get to the deficiencies of pure neo-classical economic analysis–North argues that the market alone isn’t enough to regulate behavior to the degree necessary to avoid opportunistic behavior.

…the measurement costs of constraining behavior are so high that in the absence of ideological convictions to constrain individual maximizing, the viability of economic organization is threatened. (North, 44)

From whence do we go? Institutions beyond the market, I suppose. I wonder if Weber and that dastardly Protestant Work Ethic will come up.

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