Wednesday, June 15, 2016

Weingast on Violence and Medieval Trade

Barry R. Weingast, Stanford cal Science, has posted The Medieval Expansion of Long-Distance Trade: Adam Smith on the Town's Escape from the Violent and Low-Growth Feudal Equilibrium:
Most people in medieval Europe lived at subsistence in a violent feudal world. Adam Smith explained both the long-term stability of the feudal system and how the towns escaped this violence trap through political exchange that fostered their ability to enter long-distance trade, significant division of labor, and economic growth and development. Violence is central to Smith's approach to development, which Smith scholars have systematically under-appreciated. In the face of episodic violence, individuals had little incentives to be industrious, to save, or to invest. Smith argued that the medieval towns escaped the violence trap through trade expansion. In Smith's view, development required three mutually reinforcing elements – liberty; commerce, including long-distance trade; and security from all forms of violence.
H/t: Legal Theory Blog