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- W996370682 abstract "The monopoly power of states causes two problems: society may be led to misallocate resources by producing too much order, or at least into attempting to do so by overallocating resources to its production. Monopolies also can earn excess profits for their owners, the rulers. These are the efficiency and equity problems of the preceding chapter. The misallocation of resources is a subtle effect, one that economic theory predicts and one that can perhaps be measured using the sophisticated tools of modern econometrics, but the ordinary citizen is probably not too cognizant of it. Even if cognizant they still may find it in their own interests to leave the behavior of the rulers unchanged. The same is true of other monopolies. We are typically outraged, not by the implicit misallocation of resources they cause but by the exorbitant profits of the monopolists. Perhaps this is because for most of us envy is a stronger motivation than the desire for perfection. More likely it is simply that the profits are obvious, while the inefficiency in the form of being at the wrong point on the production possibility curve is not. Moreover, it is not at all clear that a single-owner monopoly state would misallocate resources. That issue seems to depend on the nature of the information the ruler possessed. Representative democracy, the concern of the present chapter, may be viewed as a frontal assault on the equity part of the monopoly problem. May one wonder then, why so many are surprised that equity remains one of the principal concerns of modern democracies?" @default.
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- W996370682 date "1979-01-01" @default.
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- W996370682 title "Democracy, the Corporate State" @default.
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- W996370682 doi "https://doi.org/10.1007/978-94-011-7627-9_7" @default.
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