A Productive Society A Productive Society **

* The Wealth and Poverty of Nations, David Landes, W.W. Norton, 1999

The Ideal CaseThe Ideal Case

A society theoretically best suited to A society theoretically best suited to pursue material progress and general pursue material progress and general enrichment. This ideal growth-and-enrichment. This ideal growth-and-development society would be one development society would be one that:that:1.1. Knew how to operate, manage, and build Knew how to operate, manage, and build

the instruments of production and to the instruments of production and to create, adapt, and master new create, adapt, and master new techniques on the technological frontier.techniques on the technological frontier.

2.2. Was able to impart this knowledge to the Was able to impart this knowledge to the young, whether by formal education or young, whether by formal education or apprenticeship training.apprenticeship training.

3.3. Chose people for jobs by competence and Chose people for jobs by competence and relative merit; promoted and demoted on relative merit; promoted and demoted on the basis of performance.the basis of performance.

4.4. Afforded opportunity to individual or Afforded opportunity to individual or collective enterprise; encouraged collective enterprise; encouraged initiative, competition, and emulation.initiative, competition, and emulation.

5.5. Allowed people to enjoy and employ the Allowed people to enjoy and employ the fruits of their labor and enterprise.fruits of their labor and enterprise.

CorollariesCorollaries

These standards imply corollaries:These standards imply corollaries:– Gender equality (doubling the pool of Gender equality (doubling the pool of

talent)talent)– No discrimination on the basis of No discrimination on the basis of

irrelevant criteria (race, sex, religion, irrelevant criteria (race, sex, religion, etc.)etc.)

– A preference of scientific (means-end) A preference of scientific (means-end) rationality over magic and superstition rationality over magic and superstition (irrationality).(irrationality).

Productive Society Productive Society Political and Social Political and Social InstitutionsInstitutions

1.1. Secure rights of private property, the Secure rights of private property, the better to encourage saving and better to encourage saving and investment.investment.

2.2. Secure rights of personal liberty—secure Secure rights of personal liberty—secure them against both the abuses of tyranny them against both the abuses of tyranny and private disorder (crime and and private disorder (crime and corruption).corruption).

3.3. Enforce rights of contract, explicit and Enforce rights of contract, explicit and implicit.implicit.

4.4. Provide stable government, not Provide stable government, not necessarily democratic, but itself necessarily democratic, but itself governed by publicly known rules (a governed by publicly known rules (a government of laws rather than men). If government of laws rather than men). If democratic, that is, based on periodic democratic, that is, based on periodic elections, the majority wins but does not elections, the majority wins but does not violate the rights of the losers; while the violate the rights of the losers; while the losers accept their loss and look forward losers accept their loss and look forward to another turn at the polls.to another turn at the polls.

5.5. Provide responsive government, one that Provide responsive government, one that will hear complaint and make redress.will hear complaint and make redress.

6.6. Provide honest government, such that Provide honest government, such that economic actors are not moved to seek economic actors are not moved to seek advantage and privilege inside or outside advantage and privilege inside or outside the marketplace. In economic jargon, the marketplace. In economic jargon, there should be no rents to favor and there should be no rents to favor and position.position.

7.7. Provide moderate, efficient, ungreedy Provide moderate, efficient, ungreedy government. The effect should be to hold government. The effect should be to hold taxes down, reduce the government’s taxes down, reduce the government’s claim on the social surplus, and avoid claim on the social surplus, and avoid privilege.privilege.

An Honest SocietyAn Honest Society

The ideal society would also be honest. The ideal society would also be honest. Such honesty would be enforced by Such honesty would be enforced by law, but ideally, the law would not be law, but ideally, the law would not be needed. People would believe that needed. People would believe that honesty is right (also that it pays) and honesty is right (also that it pays) and would live and act accordingly.would live and act accordingly.

A Mobile SocietyA Mobile Society

An ideal society would be marked by An ideal society would be marked by geographical and social mobility.geographical and social mobility.

People would move about as the sought People would move about as the sought opportunity, and would rise and fall as opportunity, and would rise and fall as they made something or nothing of they made something or nothing of themselves.themselves.

This society would value new as against This society would value new as against old, youth as against experience, old, youth as against experience, change and risk as against safety.change and risk as against safety.

It would be a society of equal shares, It would be a society of equal shares, because talents are not equal; but it because talents are not equal; but it would tend to a more even distribution of would tend to a more even distribution of income than is found with privilege and income than is found with privilege and favor. favor.

It would have a relatively large middle It would have a relatively large middle class. class.

The greater equality would show in more The greater equality would show in more homogeneous dress and easier manners homogeneous dress and easier manners across class lines.across class lines.

No Society Today Is No Society Today Is PerfectPerfect No society has reached the ideal. No society has reached the ideal.

Russia TodayRussia Today

According to Landes:According to Landes:– “… “… seventy-five years of anti-market, anti-seventy-five years of anti-market, anti-

profit schooling and insider privilege have profit schooling and insider privilege have planted and frozen anti-entrepreneurial planted and frozen anti-entrepreneurial attitudes. Even after the regime has fallenattitudes. Even after the regime has fallen—people fear the uncertainties of the —people fear the uncertainties of the market and yearn for the safe tedium of market and yearn for the safe tedium of state employment. Or for equality in state employment. Or for equality in poverty.”poverty.”