Saturday, October 10, 2015

Ed Stringham On Private Governance

 Jeff Deist talks to Edward Stringham, professor of Economics at Trinity College in Hartford, Connecticut, about his new book called Private Governance: Creating Order in Economic and Social Life.

I haven't read the book, yet, But this is an excellent interview.

Here's the blurb for the book:
From the first stock markets of Amsterdam,London, and New York to the billions of electronic commerce transactions today, privately produced and enforced economic regulations are more common, more effective, and more promising than commonly considered. In Private Governance, prominent economist Edward Stringham presents case studies of the various forms of private enforcement, self-governance, or self-regulation among private groups or individuals that fill a void that government enforcement cannot. Through analytical narratives the book provides a close examination of the worlds first stock markets, key elements of which were unenforceable by law; the community of Celebration, Florida, and other private communities that show how public goods can be bundled with land and provided more effectively; and the millions of credit-card transactions that occur daily and are regulated by private governance. Private Governance ultimately argues that while potential problems of private governance, such as fraud, are pervasive, so are the solutions it presents, and that much of what is orderly in the economy can be attributed to private groups and individuals. With meticulous research, Stringham demonstrates that private governance is a far more common source of order than most people realize, and that private parties have incentives to devise different mechanisms for eliminating unwanted behavior. Private Governance documents numerous examples of private order throughout history to illustrate how private governance is more resilient to internal and external pressure than is commonly believed. Stringham discusses why private governance has economic and social advantages over relying on government regulations and laws, and explores the different mechanisms that enable private governance, including sorting, reputation, assurance, and other bonding mechanisms. Challenging and rigorously-written, Private Governance will make a compelling read for those with an interest in economics, political philosophy, and the history of current Wall Street regulations.




  1. Private entities have no authority. No one has to obey them.

    1. And not playing nicely with the other kids has consequences and certain behavior would have disincentives while other types of behavior produces rewards and prosperity. Thus, most people will choose to cooperate before the personal losses become too great.

      There are plenty of examples of this all around you already if you took the time to see them.
      This wouldn't be the problem you believe it would be.

    2. "Private entities have no authority. No one has to obey them."

      Straw man much?

    3. Wags frequently pushes some sort of minarchist / Misean position on the state. I'm curious what his limiting principle is?

      Presumably Wags believes that there are certain functions only the state can perform, and that the state should be limited to these functions. Yet, the statist argument in favor of entering where markets "cannot perform the service" are all flawed. Essentially, they boil down to: since the state IS performing the service through a monopoly granted to itself, ONLY the state can perform these services.

      So, please enlighten us.

  2. Private entities have exactly the right amount of authority to be successful human organizations. No more, no less. Prof Stringham discusses why this is so and gives numerous examples of successful private entities. WAGS reminds me of the three monkeys sitting side by side. One covering his eyes, one his ears and one his mouth. See no freedom, hear no freedom, speak no freedom. I mean the freedom to act voluntarily which always begins and ends with a personal choice.