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Food for thought



In continuation and in support of the comment from Rajeev Srinivasan on
Rediff, today, about the role of internet technology, and in continuation
of my firm belief that the internet has and will bring about a fundamental
shift in power toward the People, the following extract I was just reading
from the book: "The Frontiers of the New Institutional Economics," edited
by John N. Dronak and John V.C. Nye (Academic Press, 1997), is extremely
relevant. That will also, very tangentially, address some of Ashwin's
concerns: 

"Any changes in the capacity of the Ruler to control, or more importantly,
any changes in the shape of the production funtion of control and force,
would affect the equilibrium patterns of rights, order, security, and
individual freedoms. ... Changes in technology that favor the individual
or smaller political configurations (including perhaps improvements in
personal computing ...) would work against the success of large-scale
bureaucratic control. At the national level, improvements in competition
in international capital markets may constrain the types of fiscal and
monetary policies that governments can run, limiting for example the
extent of inflationay policies, or punishing more swiftly those regimes
that attempt to diverge from world-market pressures [My note: Russia's
devaluation today is a case in point]. ..."

Today, the market for political control is getting more complete, with
transaction costs of association among citizens coming down drastically. 
This has led to the rapid emergence of powerful citizens groups, [read,
for example,"The Supply Side of Global Bribery," in Finance and
Development, June, 1998, on the tremendous role of Transparency
International in global markets today:  TI by the way was started only 5
years ago.]. In my view, the trend globally will now be for the contracts
between citizen and state to get more explicit and complete. The state
will not fizzle out, but the capacity of the Ruler to misuse control will
be dramatically restricted. 

The work that we are doing on IP is actually quite unique, in this
context: we are thereatening to create, as it were, the most "complete"
(in the sense of complete contract) contractual document ever created
anywhere in the world so far between a free citizen and the state.
SS


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