New Horizons in Institutional and Evolutionary Economics series
Chapter 4: The Value of Destructive Power
INTRODUCTION The value of creative activity (goods and services) has been extensively studied in economic literature since its inception. However, the value of destructive activity has generally been neglected. The purpose of this chapter is to discuss the value of destructive power. In doing so, I shall first identify the following two peculiar characteristics of the value of destructive power compared with that of creative power: (i) nonequivalency principle; and (ii) more productivity (destructivity) of destructive power. Then I shall distinguish two different functions of destructive power, namely ‘appropriative’ and ‘rule-producing’100 functions. I shall argue that in the former case, destructive power is a means to appropriate wealth and is thus subject to the economic calculation of costs and benefits. Although appropriative activity may be social or individual, it has a private nature and can be analysed in terms of individual choice theory. Different strands of neoclassical approach, namely rent-seeking literature, rational conflicts, predation models, socio-political instability models and rational expectations or general equilibrium models of violence have focused on this function. However, this approach has ignored the rule-producing function of destructive power. Destructive power as a rule-producer is no longer a means but an end in itself, and has a public or universal nature. I shall subsequently discuss the limits of an individualistic approach in understanding the universal character of destructive power, and argue that social groups or dynasties, rather than individuals, should be taken as the starting point of the analysis of destructive power. The value of destructive...
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