Arnold Kling also discusses the Daley/Hooks microfinance piece. But the valedictory Kling question poses a false alternative:
For Discussion. Which is an easier problem to solve–a shortage of capital, or institutional deficiencies?
I think it’s increasingly apparent that institutions are a form of capital. Money and machines are more or less useless, aren’t really capital at all, in the absence of a system of formal and informal rules that enables extended, stable mutually beneficial coordination. That was my largely point in this TCS article on the prospects of success in Iraq, and I’m sticking to it.
The question is a non-starter in today’s global economy. Institutional deficiencies are the only possible cause for a lack of capital.
A very well written piece.You keep getting better.
“How do you build, or grow, a moral infrastructure? That’s what we need to understand. Sadly — and let’s hope not tragically — we still don’t.”
But you didn’t answer Kling’s question, unless the answer is neither.
And Iraq/Islam has a lot of institutions for transactions and civil society, some of which you may not like or consider absurd(usury) but have a track record of middling success.
Rules are necessary for markets to develop and for capital to be invested. Rules develop spontaneously, out of the interactions of traders, but aren’t owned by anyone, unlike capital. The term “social capital” is sometimes used to describe them, but runs afoul of Hayek’s criticisms, I think.
The word “social” is a weasal word and should be banished to the socialist paradises where it belongs.
The word “social” is a weasal word and should be banished to the socialist paradises where it belongs.
I don’t think there’s any doubt that Marx would consider present day America a “socialist paradise.” Social Security gets to keep its name, I guess.
I wonder if $300 billion in microloans to Iraqis would have made a better investment than using that much to blow stuff up there?
this link has some useful and relevant thoughts:
http://www.mises.org/fullstory.aspx?Id=1512
From a recent post by Lawrence Lessig in his blog:
“the single most important thing that I learned from my years working on ‘constitutionalism’ in Eastern Europe: That 90% of the challenge is to build a culture that respects the rule of law, and that practices it. A document doesn’t build that culture. And no one has a formula — either for building it, or preserving it.
Certainly not a law professor.”
Lawrence Lessig blog
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The question is a non-starter in today’s global economy. Institutional deficiencies are the only possible cause for a lack of capital.
A very well written piece.You keep getting better.
“How do you build, or grow, a moral infrastructure? That’s what we need to understand. Sadly — and let’s hope not tragically — we still don’t.”
But you didn’t answer Kling’s question, unless the answer is neither.
And Iraq/Islam has a lot of institutions for transactions and civil society, some of which you may not like or consider absurd(usury) but have a track record of middling success.
Rules are necessary for markets to develop and for capital to be invested. Rules develop spontaneously, out of the interactions of traders, but aren’t owned by anyone, unlike capital. The term “social capital” is sometimes used to describe them, but runs afoul of Hayek’s criticisms, I think.
The word “social” is a weasal word and should be banished to the socialist paradises where it belongs.
The word “social” is a weasal word and should be banished to the socialist paradises where it belongs.
I don’t think there’s any doubt that Marx would consider present day America a “socialist paradise.” Social Security gets to keep its name, I guess.
I wonder if $300 billion in microloans to Iraqis would have made a better investment than using that much to blow stuff up there?
this link has some useful and relevant thoughts:
http://www.mises.org/fullstory.aspx?Id=1512
From a recent post by Lawrence Lessig in his blog:
“the single most important thing that I learned from my years working on ‘constitutionalism’ in Eastern Europe: That 90% of the challenge is to build a culture that respects the rule of law, and that practices it. A document doesn’t build that culture. And no one has a formula — either for building it, or preserving it.
Certainly not a law professor.”
Lawrence Lessig blog