Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships

Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships

Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships

Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships

Synopsis

Why do some economies do better than others? How does society encourage the kind of market economy that generates continually increasing incomes? How do particular styles of government affect economic performance? World-renowned economist Mancur Olson tackles these questions and others in what will surely be regarded as his magnum opus.

Olson contends that governments can play an essential role in the development of markets. Reliable enforcement of private contracts and protection of individual rights to property depend on governments strong enough not to undermine them. His exploration of "market-augmenting governments" will stand as a cutting-edge work on economic growth and provide a useful framework in which to consider the Asian financial crisis and its aftermath. As Susan Lee noted in Forbes, "his pioneering insights might have won a Nobel Prize for Olson had he lived a bit longer".

Excerpt

The question of how power relates to prosperity has occupied people's minds for centuries. Indeed, sometime around 1340, the leaders of the Italian city-republic of Siena commissioned a pair of frescoes that confront this question directly. Painted by Ambrogio Lorenzetti and dominating the room in which Siena's ruling Council of Nine deliberated, these two pictures are known as the Allegory of Bad Government and the Allegory of Good Government. The commissioned work presents an early and simplified view of the problems that Mancur Olson tackles in Power and Prosperity.

In the Lorenzetti frescoes, bad government, represented by the figure of Tyranny, sitting before a crumbling city wall, holds court over a series of vices: Cruelty, Treason, Fraud, Furor, Division, War, Avarice, Pride, and Vainglory. Scenes of various depredations, war, crime, and the trampling of justice surround the labeled figures, painted with all of the dramatic expression and costume apparently required of medieval public art. In contrast, on the wall to the right, a large figure of the Common Good presides over the effects of good government including Wisdom, Peace, Justice, Faith, Charity, Magnanimity, and Concord. Notable among the figures in the Allegory of Good Government are two groups: a group of soldiers and prisoners and, to their left, a collection of councilors. These two subplots are of particular focus in Olson's book: the exercise of power and the role of citizenry in this process.

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