From the Comments: The four broad pillars of the market-based economy

NEO’s response to my musings on decentralization in Africa is worth highlighting:

It strikes me , Brandon, that one of the impediments here, there may be others, I’m no expert, is that the nascent US was composed mostly of literate folks with a (at least somewhat) common outlook that specified above all honesty and a “government of laws, not men”. I would also state that this is a good bit of our problem now.

This is a great observation. An anthropologist by the name of Maya Mikdashi recently wrote an article on the effects of market-based reforms in the Middle East. She essentially argued that the market-based reforms assume that only a certain type of individual can successfully participate in the market economy (stay with me here): the rational, autonomous, freedom-seeking, and legally-protected-as-an-individual type. Over the past two decades, as more states have moved towards a market-based economy, we have seen the institutional and cultural rewards being reaped from this process. Instead of people who have known only poverty and want, the market-based economy has pushed individuals to seek to become more rational, autonomous, freedom-seeking, and legally protected as an individual.

Now, stay with me. The market-based economy, capitalism, has four broad institutional pillars that it needs to thrive: private property, individualism, the rule of law, and an internationalist spirit. From these pillars come the fountains of progress that the West has come to enjoy over the past 300 years. While I doubt she realizes it, Mikdashi is simply echoing the writings of the great classical liberal theorists of the past three centuries: institutions matter, and they matter a lot. A big point both Dr. Ayittey and myself have been trying to make is that the institutions necessary for progress and capitalism are already in place in the post-colonial world; when I was in Ghana doing research one of the things I always asked farmers is where they got their property titles and they answered “the chief.” I asked them why they didn’t go through more official routes to obtain their property titles (i.e. through the state), and I’m sure you can finish the Ghanaian farmer’s answer for him.

The fact that most, if not all, citizens of the new republic desired the rule of law is one that cannot be stressed enough, and it is definitely one of the reasons why we have grown so prosperous, and answers why we are in trouble today. However: Africans don’t desire the rule of law?

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