A theory of history in 7 chapters

That is the monumental task that Doug North, John Wallis, and Barry Weingast have taken on in their forthcoming book "A Conceptual Framework for Interpreting Human History." The book is being discussed today and tomorrow at the Encounters with Authors series of Harvard's Institute for Quantitative Social Science.

The book's focus is on two fundamental modes of social organization, which the authors call the Natural State and the Open-Access Order.  The first of these appeared about 10,000 years ago and characterizes not only most of recorded human history, but also most of today's countries. It is a system where a small group of elites--the authors emphasize that the multiplicity of elites is important--reach a modus vivendi whereby they agree to create and distribute rents among themselves.

Only about 25 countries and 15 percent of the world's population live in open-access societies, according to the authors. Open-access orders are based on competition--both in economics and in politics--and use the threat of entry to regulate social, economic, and political relations.

The authors emphasize that much of social science today goes astray because it tries to fit all countries under the same theoretical construct. Instead, they argue, you must understand that the logic of these two systems are fundamentally different.  

I am not quite through with the manuscript, but what I am missing in the book so far (and what the first six chapters do not seem to contain--there is a seventh chapter which I have not seen) is a good discussion of what this framework explains that other theories do not--especially as regards current political and economic developments.  In other words, why did we really need this book and its conceptual framework? 

I am also uncertain about the validity of the sharp distinction that North et al. draw between their two modes of social order insofar as we are meant to apply this distinction to contemporary realities.  I know that most developing societies have features that are different from those in the advanced democracies, but I am not sure I see a fundamentally different way of organizing society (instead of gradations). Their historical argument has also come in for a bit of criticism, notably by Niall Ferguson in his discussion of North et al.'s chapter on the evolution of property rights in medieval and early modern England. 

What the authors do get right, I think, is that otherwise similar institutional arrangements will induce different behaviors and outcomes in different social orders. Doug North has been making this point for quite a while, and it is an especially important one to keep in mind in light of the current obsession with governance reforms and best-practices.

Comments

[gordon]

Sounds like Toynbee with a bit of economism added in.

[Aqdas Afzal (Pakistan)]

Dani --

What is not clear from your post is whether North et al. think there is a continuum between the Natural State and the Open-Access Order? I would like to express some reservations about this work assuming the authors posit the presence of acontinuum (the very name "natural state" implies there is a continuum).

There is nothing new about this theory. Actually, this theory sounds a bit like the Modernization Theory (MT) of yesteryears. Remember, MT posited that with the increase in communication, rural-urban migration etc. all socities would eventually end up being identical to Western-style liberal democracies -- the MT was teleological. Alas, it wasn't to be!

However, I do agree with North et. al when they argue that the present academic research goes astry when it tries to fit all cases to the available theoretical construct.

One instance of this is the complete inability of Western Social Science in explaining the incidence of Suicide Bombing. If we are to assume -- what most theories now assume, especially with the ascendence of Rational Choice Theory (RCT)in Social Science --the presence of homo economicus then Suicide Bombing is not explained, at all. Why would I want to decrease my overall utility (by killing myself) for a miniscual dent in my enemy's utility?

Similarly, the presence of altrusitic behavior, the practice of donating organs and so forth is not easily explained by RCT.

Similarly, where some things can be explained by the RCT, they are often judged differently. Western theories place way too much importance on the "substantive" importance of democracy for the citizens of a country. They seem to forget that sustinance is the most important concern for the vast majority of individuals.

Why is it, for instance, that Indian Hindus, coming from the biggest democracy in the world, would pay a large sum of money to go to the Arab Gulf countries, especially Saudi Arabia: a country where Indian Hindus have no political or religious freedom?

[wjd123]

If institutions are relative to the societies in which they function then rational choice would also be relative to the society in which it functions.