Does Hayekian Economics Undermine Hayekian Politics?

I have Bowles’ Moral Economy on my desk awaiting my attention. I’ll inevitably get to it when I have something important and urgent I can put off in order to say, “Hey, I should really read that.”

A lot of the themes Bowles discusses are at least touched on in Douglass C. North’s Understanding the Process of Economic Change. For various reasons, coercive institutions have had an evolutionary advantage. He and his coauthors Barry Weingast and John Wallis put violence at the center of their theory of social orders in a 2009 book provocatively titled Violence and Social Orders (Weingast discussed it on EconTalk in 2007).

This isn’t the place to get into the finer points of the Nordic welfare states, but I have my doubts about whether they would work here. Sweden’s population is smaller than Ohio’s, and it’s spread out over an area roughly the size of Ohio, Kentucky, Tennessee, and Alabama. There are fewer people in Norway than in metro Atlanta. Their populations are more homogeneous, and a 2000 paper by Alberto Alesina and others shows that ethnic diversity is associated with lower support for welfare states. Empirically, tribalism and crude racism matter a lot and limit our politically-feasible options. Should they? Of course not. But sadly, they do.

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