How Does Government Work At All?
Stick ‘em up for peace, in Venezuela the hands are still too visible (ABC 2014) Ricardo Hausmann, professor of economics at Harvard, has an oped today at Project Syndicate in which he argues that an invisible hand operates in government just as it does in an economy. Exactly as in the modern economy, there is no possibility of central control in a big, complex, information-intensive modern government. So the modern state has evolved a mechanism for self-organisation that is equivalent to the market price-profit system for providing information and incentives which allow political systems to “identify problems, propose solutions, and monitor performance”. Venezuela does not have this mechanism, the USA does. The mechanism is intimately linked to the conditions required for modern democracy. Democracy is an open structure that helps society cope with complexity and coordination. Rich countries are rich because they are democratic, or vice versa! So far so good - I ca...