New Horizons in Institutional and Evolutionary Economics series
In The Kid (1921), Charlie Chaplin’s little tramp finds an ingenious way to earn his living as well as that of his little kid. The tramp and the kid go to a middle-class district. First, the kid throws a stone and breaks the window of an apparently well-to-do apartment and then makes his escape. Then the tramp appears as a glazier and is hired to repair the broken window. In this way, the deliberate destruction of a window by the kid creates an outlet for the tramp. Deprived layers of population are not only ones that may use their destructive power to create an outlet for their living. Strong states sometimes pursue imperialist policies to dominate other countries. The destruction of colonized countries may create new markets for the ‘civilized’ states. However, there are crucial differences between Chaplin’s story and the imperialist policy. In the former case, only windows are broken, whereas in the latter one, people are usually killed and the states are broken. Many companies could be hired to reconstruct the windows (economy), but who can repair broken states? This was and remains as yet an unresolved puzzle. However, destruction can create outlets both for creating income (or property) and sovereignty; a fact that is often ignored by economists. The reason should be sought in the fundamental orientation of our discipline. From its inception, political economy has been interested in analysing the value that agents, individually or collectively, can produce or exchange at national or international level. What...