New Horizons in Institutional and Evolutionary Economics series
Chapter 3: The Social Nature of Destructive Power
INTRODUCTION Destructive power has been studied from different angles. In the preceding chapter, we noted that in rational conflict theory, general equilibrium models of political instability, rational expectations models of domestic violence and other strands of the neoclassical approach, rational behaviour is incompatible with real destruction and violence. Even in an equilibrium competitive market economy with rational agents choosing between appropriative and destructive activities, there would not be real destruction or violence. Hence, real destruction can originate from random events, asymmetrical information, or disequilibrium. Following Pareto (1935), many economists believe that real destruction as a manifestation of irrational behaviour should be the object of sociological studies. For example, in his theory of revolution and war, Pareto distinguishes between two different types of qualities or ‘residues’, namely ‘combination-instincts’ and ‘grouppersistence’. According to him, the governing elite of the democracy is rich in the so-called ‘combination-instincts’. This term means that they are materialistic and individualistic, innovating and risk-taking, pacific and reliant on persuasion and guile (combinazioni in the Italian sense) rather than on force. They are the ‘Athenians’ or ‘foxes’, while those governing Byzantium are the ‘Spartans’ or ‘lions’.54 However, for ruling, it is also necessary to possess group-persistence instincts implying the use of force and violence to defend one’s own interests. Revolution and defeat in war can be explained by a disequilibrium in the necessary proportions between these two different qualities: ‘[I]n the long-run the differences in temperament between the governing class and the subject class become gradually accentuated, the...
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