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Opening Arguments

Third-sector battleground

Here's an interesting libertarian take on the work of Indiana University's Elinor Ostrom, announced yesterday as co-recipient of the 2009 Nobel Prize in economics. Her work, says the author, amounts to a challenge to the two mainstream views in economics and political science -- the "spontaneous order" of Adam Smith, which says that individuals pursing their own interests will create an "invisible hand" that guides things; and the Hobbsean view that there will be chaos and conflict without a "Leviathan" to make and enforce law:

“The presence of order in the world,” Ostrom writes, “is largely dependent upon the theories used to understand the world. We are not limited, however, to only the conceptions of order derived from the work of Smith and Hobbes.” We need a theory that “offers an alternative that can be used to analyze and prescribe a variety of institutional arrangements to match the extensive variety of collective goods in the world.” In response to that need, Ostrom has explored a new domain of the complex institutional reality of social life—the rich institutional arrangements that are neither states nor markets. These are for-profit or not-for-profit entities that produce collective goods for “collective consumption units.”

[. . .]

 And thus Ostrom's study of governance is not only a source of inspiration, it is also a challenge to libertarians. In study after study, she has shown that the principles of individual freedom, responsibility, entrepreneurial creativity, and resourcefulness apply not only to the production and distribution of private goods, they also apply to a large institutional domain outside the market order. This “third sector,” which is “neither state nor market,” may in fact be as important a battleground for the preservation of a free and prosperous social order as the market itself.

In a time of increasingly stark dichotomies when few seem able to break out of the red state-blue state antagonisms, it's refreshing to see some original thinking rewarded.

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