Arnold Kling  

Beliefs and Consequences

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In my latest essay, I write


Over the past 50 years, economists have become less materialistic. No, we have not become hippies, rejected consumerism, and discovered spirituality. As social scientists, however, we have noticed that a large share of wealth comes from factors other than basic labor and capital.

...If institutions are important, then this raises questions about how institutions get to be what they are. Are there strategies for achieving institutional reform, including ending corruption or strengthening property rights? Can institutions change suddenly, or do they evolve gradually? Why are we fortunate enough to have institutions that are conducive to growth, while other societies are stuck with dysfunctional institutions?


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COMMENTS (5 to date)
eric writes:

fabulous essay. Almost Vince Young-like.

PJens writes:

"Are there strategies for achieving institutional reform, including ending corruption or strengthening property rights?" Where I live, I do not see those issues being addressed. The politics of my local center arround entitlemnts and materialistic desires. Namely what can tax dollars build, repair, or be given to people less than well off.

I believe that economic times are too good for corruption to be in decline. Politicans and business people alike are seeing way too many dollars floated before their eyes.

As far as the rate of change, it follows the rate of wealth growth. The faster people accumulate wealth, the fster they want more social entitlements.

I do not wish for bad economic conditions. Rather, I want people to act responsibly in the good economic conditions of present.

Matt McIntosh writes:

Good essay as always, Arnold. Have you read any of Douglass North's work on institutions?

Douglass Holmes writes:

Exellent article. The implications are bad for many Americans. Many Americans do not have a cultural heritage that supports a belief that wealth is something to be earned and created. They will never support a market solution to any social problem. They will be of the opinion that a market solution will simply allow the "rich" to get whatever they want.
What is especially sad is that many Americans whose parents and grand-parents earned, saved, and passed on wealth, do not have the belief system to sustain that legacy. To them, money is something to spend on self indulgence, or given away, or used for power. The connection of wealth to hard work and risk taking is invisible to them and today's education system won't help them see it.

Roger M writes:

If you're really interested in how culture affects institutions, you should read Culture Matters How Values Shape Human Progress: by Lawrence E. Harrison,Samuel Huntington.

I believe the major problem in the world is the continuing belief in the medieval idea that all trade is zero sum. It's the foundation for Marxism, anti-globalization and anti-corporation.

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