Liberty, Markets, and Economic Growth

This conference was the second in our three-part series on “Liberty, Responsibility, and Economic Change,” led by Douglass North and Paul Edwards. A major goal of this conference was to capitalize on earlier discussions on cognition and institutions, and apply them to specific instances of economic change. In this conference, participants explored a fundamental dilemma for individual liberty and economic growth: that any state strong enough to protect property rights, enforce contracts, and provide a stable macro-economy is also strong enough to violate the liberty and confiscate the wealth of all of its citizens.

About the three-part series
This series of Liberty Fund sponsored conferences, co-directed by Nobel Laureate Douglass North of Washington University and Paul Edwards, President of the Mercatus Center at George Mason University, engaged the best scholars from a variety of disciplines in the project of developing a dynamic theory of social and economic change.

In recent years many parts of the world have experienced tremendous and accelerated social and economic change. Although there has been a steady stream of technical and financial assistance into many of these transitional countries, we have yet to witness the rise of wide spread, self-sustaining market economies. Economists who have worked closely with these transitional economies are increasingly aware that belief and culture seem to be playing a role in the differential acceptance of market processes and market sustaining institutions.  As of yet, however, economists have not been able to turn that observation into anything approaching a meaningful, robust theory of social and economic change.

This series of conferences is intended to bring us closer to having a meaningful and theoretically sophisticated way of discussing the role that culture and belief play in the process of economic and social change. By bringing together economists and political theorists puzzled by these questions with anthropologists, sociologists, and cognitive psychologist who address such issues, we hope to catalyze a rich and well-informed discussion of what scholars need to take into account as they address these issues. In particular, we will explore the role that beliefs about liberty and personal responsibility play in the process of social and economic change.

Agenda

Session One
Coleman, Jules L., Part One, Risks and Wrongs, Cambridge University Press (1992) pp. 17-102.

Session Two
Akerlof, George A., “The Market for 'Lemons': Quality Uncertainty and the Market Mechanism”, Quarterly Journal of Economics, Vol. 84, No.3 (August, 1970) pp. 488-500.

Session Three
Hayek, Friedrich A., “The Use of Knowledge in Society” and “The Meaning of Competition”, Individualism and Economic Order, The University of Chicago Press (1948) pp. 77-106.

Session Four
Murphy, Kevin, Andrei Shliefer, and Robert W. Vishny, “The Transition to a Market Economy: Pitfalls of Partial Reform”, Quarterly Journal of Economics, Vol. 107, No. 3 (August, 1992) pp. 889-906.

Session Five
Deck, Cary A., Kevin A. McCabe, and David P. Porter, “Why Stable Fiat Money Hyperinflates: Results from an Experimental Economy”, (May 2002)