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pre-debate, article, source material
I've come across an excellent article that cogently discusses the issues
of markets and their regulation at
I highly recommend this article.
Regulation, of course, requires regulators. But if democratic
accountability is a charade, if regulators are
hopeless captives of "rent-seeking" interest groups, if
public-mindedness cannot be cultivated, then the
regulatory impulse is doomed. Yet because capitalism
requires ground rules, it is wrong to insist that the
best remedy is no regulation at all. The choice is
between good regulation and bad regulation.
As the economic historian Douglass North, the 1993 Nobel laureate in
economics, has observed, competent public administration and
governance are a source of competitive advantage for nation-states.
Third-world nations and postcommunist regimes are notably
disadvantaged not just by the absence of functioning markets but by
the weakness of legitimate states. A vacuum of legitimate state
authority does not yield efficient laissez faire; it yields mafias and
militias, with whose arbitrary power would-be entrepreneurs must
reckon. The marketizers advising post-Soviet Russia imagined that
their challenge was to dismantle a state in order to create a
market. In fact, the more difficult challenge was to constitute a
state to create a market.
Norms that encourage informed civic engagement increase the likelihood
of competent, responsive politics and public administration, which in
turn yield a more efficient mixed economy. North writes:
"The evolution of government from its medieval, Mafia-like character
to that embodying modern legal institutions and instruments is a major
part of the history of freedom. It is a part that tends to be obscured
or ignored because of the myopic vision of many economists, who
persist in modeling government as nothing more than a gigantic form of
theft and income redistribution."
Here, North is echoing Jefferson, who pointed out that property and
liberty, as we know and value them, are not intrinsic to the state of
nature but are fruits of effective government.