Why do some economies do better than others? How does society encourage the kind of market economy that generates continually increasing incomes. POWER AND PROSPERITY: OUTGROWING COMMUNIST AND CAPITALIST DICTATORSHIPS Mancur Olson Basic Books, , xxviix + pgs. Mancur. Anderson, William L. Review of Power and Prosperity, by Mancur Olson. The Quarterly Journal of Austrian Economics 5, No. 7 (Summer ).

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Olson stresses the importance of private property rights, and the role of governments in protecting poaer. Stalin’s master-stroke was to allow, with unparalleled generosity, workers to labor overtime and keep most of what they earned for themselves. Open Preview See a Problem? Oct 30, Jason Reeves rated it it was amazing. So far, so familiar. Amber rated it it was ok Jun 07, So far, though, we have mere garden variety tyranny.

Power and Prosperity, by Mancur Olson | Mises Institute

Other editions – View all Power And Prosperity: The challenge of designing a prospertiy social order, in Olson’s view, is to give the power to make collective decisions to an encompassing interest rather than to a special interest. Jul 02, Rachel rated it really liked it Shelves: Why make a bargain that involves future performance if you cannot rely on the other party to honor a contract?

Stalin developed an ingenious system of wages and taxation, which turned the bulk of the Soviet population into hard working slave laborers. Olson here offers a very useful, and so far as I am aware original, supplement to the Austrian analysis of interventionism. Here’s a list of my favorite examples: Olson’s idea is cited as an influence behind the Calmfors-Driffill hypothesis of collective bargaining.

Quarterly Journal of Austrian Economics

The complex logic by which Becker justifies his roseate view of government is best left to those interested in such things. Olson points out that because price controls prevent people from making the exchanges they desire, an incentive toward corruption arises.


A far higher implicit tax rate is put on the more able people in the prosperiry productive roles.

The stationary bandit thereby takes on the primordial function of government – protection of his citizens and property against roving bandits. Nevertheless, a question remains. I really really enjoyed this book. Essentially all of the private-sector incentive is to undermine the law. What is remarkable about this argument is that it identifies a reason for autocrats and warlords to improve social welfare.

It was only after enough time had passed for the bureaucrats to collude with one another to serve private rather than encompassing interests that the system collapsed. Bubka could probably have set the bar fifteen centimeters higher twice, rather than a couple centimeters seventeen times, but that would have landed him two bonus apartments, rather than seventeen.

Jennifer rated it liked it Feb 12, And olsln are not prisoners. Jun 23, James Smith rated it liked it. Further, they raised and supplied an army that, albeit with a great deal of lend-lease aid from the United States, held off and then defeated the German Army during World War II.

Both research and economic history have spoiled that assumption. Mark Schrad rated it liked it Aug 10, Governmental action cannot be equated to the enforcement of voluntary contracts: How does society encourage the kind of market economy that generates continually olsin incomes?

Olson has here missed the central point. On the other hand, unlike many other political and economical theorists, he at least tries to steer away from the fallacy of the access to perfect information.


If indeed nothing can go wrong in a society that encourages mutually beneficial trading, how come only some countries allow millions of mutually beneficial trades to turn into one big vibrant market-clearing machine? This theory of the logic of force and the logic of voluntary exchange also had certain implications for the countries that were transitioning from communism to capitalism at the time that Mancur Olson wrote Power and Prosperity.

Jay Green rated it it was ok Aug 29, Paperbackpages. And it is in the provision of the property rights which support socially contrived markets that Mancur Olson identifies the difference between rich countries and poor countries.

Power And Prosperity: Outgrowing Communist And Capitalist Dictatorships

Prices set below the market rate will result in shortages; minimum prices, by contrast, generate surpluses. Olson shies away from libertarianism: And that’s because the basic problem will not disappear.

World-renowned economist Mancur Olson prospeeity these questions and others in what will surely Olson focused on the logical basis of interest group membership and participation. How come oligopolies and concentrated interests can form and thrive when we know that even two people can sometimes not agree to collude? Ah, that would be because the prisoner’s dilemma never occurs in nature.

Olson saw in the move from roving bandits to stationary bandits the seeds of civilization, paving the way for democracy, which improves incentives for good government by more closely aligning it with the wishes of the population.