PETER GORDON, DAVID T. BEITO, AND ALEXANDER TABARROK
The fall of the Berlin Wall and the demise of socialism hastened intellectual realignments and a rediscovery of the virtues of free markets. Many on the left and the right now agree that markets provide best. This view focuses attention on the supporting institutions that are necessary for the material progress of both developed and developing nations. For markets to succeed, a working legal infrastructure (including traditions of lawfulness and a greater reliance on evolving common law over statutory law) and high levels of trust must be in place.
Beyond exploring intellectual shifts, however, it is important to examine carefully what people do (and have always done) as they strive to manage their everyday lives. Long before government institutions emerged as the definitive purveyors of institutions and social services, private citizens developed a variety of institutions that served the public welfare. Regardless of whether the current worldview emphasizes the merits of top-down planning or bottom-up action, the latter has always been consequential. The retreat of socialism and progressivism (and other manifestations of the “industrial counter-revolution” 2) has brought a new appreciation of spontaneous orders, but the important fact is that these have always been there. Without black markets, for example, the communist states would have succumbed much sooner and many third-world countries would be even poorer.
We have come full circle. Accordingly, we are well advised to examine the power of bottom-up innovation in shaping human events, and ask some