Institutions

I found the "Institutions" reading by Douglass North to be particularly interesting, perhaps because of its focus on the interwoven qualities of the economy and politics. North maps out the various stages through which economies progress, the institutions that develop to ensure the continual growth of economies, etc. It's really an examination of the history of the world economy through the lens of institutions. Which institutions developed at which time, what did they allow to happen in terms of economic growth, development, specialization, the shift in the labor force, etc.

We take for granted some of the most basic institutions that have developed, for example, the focus on the existence of private property. Granted, in the past couple of weeks, we've thought a lot about the abolition of private property when discussing Marx. But I had honestly never, until quite recently, thought of the concept of private property as something special. It's a bit like thinking of how much the "discovery of fire" changed the lives of the most primitive humans.

North looks at history and the development of political systems and institutions as a history of institutions that govern the economic course of the world. He writes, "...economic history is overwhelmingly a story of economies that failed to produce a set of economic rules of the game (with enforcement) that induce sustained economic growth. The central issue of economic history and of economic development is to account for the evolution of political and economic institutions that create an economic environment that induces increasing productivity."

I suppose this adds a whole new layer of complication for me. For North, the most successful institutions are those that propagate the continued expansion of productivity, a steady or even exponential growth in the economy of a given state or even civilization. Here, North becomes my new Hobbes (for all the PST-lovers out there). I hate what he's saying, but it seems to me to be the truth. Why do we love America? Aside from those super spiffy track jackets we see every four years at the Olympics (Thanks, Ralph Lauren), it's the same reason we like western liberal democracy in general. People get represented, they "have their say," they have a right to 'life, liberty, the pursuit of happiness' and even more importantly, they have a right to the "pursuit of property" (xoxo, John Locke). Well that's convenient. I like having stuff.

I guess where this runs into problems for me is where it becomes apparent that this "right to property" is playing footsies with those tendencies that steer us, as a species, toward destruction, i.e. global warming? I don't really want to imagine the response I would get walking into a small town in Alabama and asking folks to stop driving their trucks so much, because it's really starting to cause some issues (did anyone read that article this week about polar bears going all Hannibal the Cannibal? I'm pretty sure it's on CNN). But anyway, everyone has a right to this property, they have a right to drive around their cars, and they have a right to buy their gas, and then burn it however which way they choose. And while I know that we almost all learned in Microeconomics that the market for public goods will somehow or other balance out (Why, hello Mr. "Invisible Hand), something is a little bit off, at least in my mind.

I guess ultimately what I find unsettling about the North reading was that it calls to mind that many of our political institutions, the things we like to brag about to other countries (look at America, that shining ray of hope and democracy, wealth and prosperity, where Cinderella finds her prince and children get free candy for ringing doorbells each October!) are really founded on this inherent need to acquire stuff. Now, I don't really know if I want to get rid of stuff or the fact that people can own it. But, I am concerned with our present addiction to stuff and all the science that has developed to try to make us get more stuff (see also: consumerism). I worked at a bank this summer (technically, a thrift, actually -- so most of the assets held were in the form of mortages). I learned a lot about the history of banking and financing, etc. A hundred years ago, the idea of having a mortgage on your house was preposterous! But we've developed a hundred thousand ways to finance a house, a car, an education, even computers and cell phones. JetBlue tried to get me to finance a plane ticket last night. That's a bit much, I think.

The whole new layer of meaning this week gave to me was really that while we usually consider the "underbelly of politics" in America to be things like pork and corruption, nepotism, or whatever else is the current hot word of the day, perhaps it's really something far beyond that. If our institutions are so firmly planted in the historical progression from simple, relatively independent economies to highly specialized, global markets, all with the apparent intention of increasing productivity at every stage of the game, can you argue that our democratic institutions are really just a tool to do that? And is consumerism then the secret twin brother of the political institutions that define western civilizations? Are we really comfortable letting it be all about the 'stuff?'