The lesson: "Crazy" is relative to expectations. A thousand years ago, everyone was used to despotism. No one expected a defeated incumbent to voluntarily hand over power. As a result, refusing to hand over power didn't seem crazy. Since it didn't seem crazy, incumbents who refused to hand over power after losing an election probably would have managed to retain power. In modern Sweden, in contrast, everyone is used to democracy. Everyone expects a defeated incumbent to voluntarily hand over power. Refusing to hand over power seems crazy. As a result, refusing to hand over power would end not democracy, but the incumbent's career.Why bring this up? Because like the democrat of a thousand years ago, I advocate a radical political change: anarcho-capitalism. After we've privatized everything else, I think we should privatize the police and courts, and abolish the government...
Since we've never had anarcho-capitalism, this peaceful equilibrium sounds like wishful thinking. But it's no more wishful thinking than stable democracy. Both systems sound crazy when first proposed. Neither can be stable as long as people expect them to be unstable. But both can be stable once people expect them to be stable.You could object: The expectations necessary to sustain anarcho-capitalism are highly unlikely to ever arrive. But the same was true for democracy a thousand years ago. Yet somehow, expectations radically changed and stable democracy arrived. How did expectations change so dramatically? It's complicated. But can expectations change dramatically? Absolutely.
This is from author and professor Bryan Caplan at the Library of Economics and Liberty blog (Econolog)
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