Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History

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Published by EH.NET (June 2009)

Douglass C. North, John Joseph Wallis, and Barry R. Weingast, Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History.? New York: Cambridge University Press, 2009. vii + 308 pp. $30 (hardcover), ISBN: 978-0-521-76173-4.

Reviewed for EH.NET by Robert A. Margo, Department of Economics, Boston University.

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One recent Sunday morning my wife and I were reading the New York Times.? ?Darling,? she said, ?have you noticed how often the word ?iconic? appears in the Times lately??

I looked up from the Arts section.? ?Hmm — you?re right! Everything and everybody is iconic these days.? Wonder what it means.?? She looked bemused as if I were insufficiently caffeinated.? ?Iconic — an icon perhaps??

If anyone is iconic in the economic history world Doug North certainly qualifies (along with Robert Fogel, Stanley Engerman, and a few others).? In my book people are iconic if I can summarize their life?s work in ten words or less.? North takes two: ?Institutions matter?.? The opposite perspective — viewed in isolation most institutions don?t matter much, being Harberger triangles and small ones at that — has its fans in modern economics.? But North has convinced the majority of economic historians, a goodly share of world?s development wonks, and the Nobel Prize Committee that he?s right.

I was taught by Robert Fogel to be catholic in my tastes and respectful of my elders. Hence for a while I read each North book that came along.?? But eventually I became frustrated — the books seemed ever more repetitious, with less and less in the way of real economic history.

Anyone who feels like I do should read Violence and Social Orders.? This time, North is joined by two prominent and strong-minded co-authors, John Wallis and Barry Weingast.? Their collaboration has been fruitful.?? Wallis has written many important articles on the growth of government and, equally important, has helped produce fundamental long-term data series from archival sources.? He remains grounded in the nitty-gritty of history no matter where his theoretical musings take him.? Weingast is a political scientist of real and lasting distinction, the co-author (with North) of a celebrated paper in the Journal of Economic History.?? (North is the Spencer T. Olin Professor in Arts and Sciences at Washington University at St. Louis; Wallis is Professor of Economics at the University of Maryland; and Weingast is the Ward C. Krebs Professor of Political Science at Stanford University.)

After a brief preface, Violence is divided into seven chapters.? Chapter one, ?The Conceptual Framework,? sets the stage and effectively summarizes the book?s arguments.? This is a book about the organization of society.? North and co-authors (NWW, hereafter) concentrate on two ?social orders? — limited access or ?natural states? versus ?open access? orders.?? Open access orders offer their members a high and growing standard of living, lots of organizations, a bigger but more decentralized government, and equal treatment under rule of law.? Limited access orders offer a lower standard of living, a consequence of lower trend growth and a more volatile growth rate; less social capital and fewer organizations; and limited, if any access to the polity, because the polity is based on privilege and unequal treatment.? Organizations matter because North has been and always will be a Smithian — growth is about the division of labor.? Division of labor goes hand in hand with organizations — the pin factory, after all, was a firm.

In NWW?s view, the fundamental problem that any social order must solve is the problem of violence.? If I cannot prevent you from stealing my freshly-killed game or, worse, killing me, I do not have much of an incentive to engage in trade with you.? For people to form groups of size capable of generating aggregate economies of scale they must be convinced that threats of violence within the group do not overwhelm the benefits from group formation.? The first time this happens in human history in a big way is when limited access social orders form.

In a limited access social order some individuals — ?elites? — are assumed to be endowed with a comparative advantage in violence.? NWW envision a scenario in which the elites simultaneously ?lay down their arms? — that is, refrain from violence.? The ?limited? in limited access means that people other than elites are on the scene.? For the sake of argument, let?s call them ?peasants.?? The peasants get something from the elites — protection from marauding bandits that they pay for by tilling the lands, for example, under the control of the elites (shades of North and Thomas!)? But the peasants cannot readily join the elites — the elites are the coalition that keeps the group together.?? The elites may grant privileges, rights, and so on to each other but these are always under the shadow of the gun; the natural state is an ?adherent organization? meaning that interactions among elites must be incentive compatible at all points in time.?

The limited access order may do some things quite well.? It maintains order, and it may even keep the peasants? bellies full.? A priestly class, one that helps with rent distribution, may generate a belief system that keeps the peasants happy even if they are not that well fed.? But the limited access order does not permit organizations to form freely, nor does it treat people equally.? In NWW these features of the limited access social order create incentives that limit at the margin, for example, innovation.? However, the limits the limited access order imposes on the problem of stemming violence are essential such that, if they were not imposed, the order would dissolve.?

Next, NWW describe open access social orders.? An open access order has a positive rate of economic growth and a low degree of volatility to its growth rate.? This is important because economic growth is something that happens in the long run.?? An open access order controls violence in a very different way from the natural state.? In the open access order there are separate, ?third party? organizations — the military, the police, and the courts — that control violence.? However, these organizations do not operate independently nor do they operate at the caprice of politicians.? They are constrained by institutions — rules of the game — as are the politicians.? No individual is above the law. Open access means that politics and, more broadly, organizations are free-entry in the sense of economics.? Moreover, the right to form an organization is defined ?impersonally? — one does not need to seek a privilege.? Impersonality plus equality under the law facilitates the formation of new organizations.? NWW are careful not to claim causality but they clearly think that more organizations (more social capital) are better.? Rent seeking occurs in the open access order but it is more likely to be growth enhancing and to benefit large numbers of people than in the natural state.

The 64 trillion dollar question is:? How do we get from the natural state to the open access order? According to NWW this cannot happen without three ?doorstep? conditions.? These collectively describe a more or less open access order among the elites.?? Elites must be ready and willing to treat each other impersonally; there should be rule of law among elites, if not the rest of the population; and elites, as a group, should have control over a military.? Once these conditions are met the transition to open access can take place fairly quickly in historical time.

The remaining chapters of the book flesh out these ideas in greater detail.? The chapters follow a similar protocol — the theory is embellished and illustrated by examples from history, often very wide ranging in time and place.?? Chapter two elaborates on the natural state, drawing on the Aztecs and Charlemagne for examples of state formation, and France and England in the sixteenth to eighteenth centuries for mature examples of the form.? The evolution of English land law, crucial to the emergence of secure property rights, is the subject of chapter three.? Open access orders are explored in greater detail in chapters four and five and crucial transitions in Britain, France, and the United States are covered in chapter six.? Chapter seven concludes by recapitulating the main points and by arguing that a proper political economy must recognize the complex, symbiotic relationship between political and economic development.

Although I think that Violence has a lot going for it, that is not to say it is a successful book overall.? It is useful, in my opinion, to contrast NWW with another work of ?big think,? Daron Acemoglu and James Robinson?s Economic Origins of Dictatorship and Democracy.? This is fair because NWW do so themselves in their book. Imagine that yours truly is to teach a graduate class on ?Institutions and Economic Performance.?? My goal is to train students to do independent research.? Which of these two works would better serve as a text? For me the answer is easy — Acemoglu and Robinson.

The reason I prefer Acemoglu and Robinson has to do with a core failing of NWW as economics.? Violence goes beyond earlier North by providing a better taxonomy for what he has been writing about since forever.? No question this is worthwhile:? economic historians have a clearer language for describing crucial features that distinguish one society from another.? However, NWW do not really provide an operative equilibrium theory of natural versus open access orders derived from the ?bottom up? (micro-behavior) or of the transition from one to the other in ways that are useful to researchers like me. They purport to think in game theoretic terms but they do not ?do? game theory.? Here the contrast with Acemoglu and Robinson is telling (and decisive, in my opinion). ?One can either like or dislike Acemoglu and Robinson?s specific dynamic games but at least they are there on the page to be debated.? Not so with NWW.? In this sense, chapter seven is very premature in its title (?A New Agenda for the Social Sciences?).

Although I do not think NWW is particular useful as a practical blueprint for research beyond taxonomy I emphasize that many of the ideas in the book have merit and are worthy of further exploration, particularly in a policy setting where formal theory (as opposed to ideas) may be counterproductive.? Above all, the notion that one cannot simply ?get rid? of the superficial exterior of natural states and thereby uncover the beating heart of an open access order yearning to be free is the book?s most important idea, and profound.

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Robert A. Margo is Professor of Economics at Boston University.?? He recently stepped down as editor of Explorations in Economic History.

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