Property Rights, Entrepreneurship and Transaction Costs
Edited by David Emanuel Andersson and Stefano Moroni
The role of cities has been elaborated many times. Our interest involves a discussion of how and why they succeed, how their shape and form develops and how flexible land markets and city evolution are most likely to prompt entrepreneurial success and human prosperity. We want to link four observations that we believe are connected. First, Malthus was wrong. There are more people on earth than ever, most of them living better and longer lives than their ancestors (Simon, 1995; Goklany, 2001; Ridley, 2010). Julian Simon (1995) reminds us that resources are not finite; they are expanded by human ingenuity, which is infinite. In particular, with institutions that feature credible rule of law and economic freedom, people are incentivized to find new resources and better use of existing resources. The effects are more widespread than many realize. Parts of sub-Saharan Africa are now joining the world exchange economy. But the good news remains a hard sell. Some have recently noted that ‘the most astonishing thing about the extraordinary growth and innovation that the US and other economies have achieved over the past two centuries is that it does not astonish us’ (Baumol et al., 2007). Second, as already suggested, the exchange economy is credited with much of this achievement. Adam Smith expected as much many years ago, but the insight has prompted considerable elaboration ever since (North and Thomas, 1973; Barro, 1997).
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