New book by Doug Allen: Fascinating insights, explaining so many institutions that people take for granted

For those who aren't familiar with Doug Allen's academic research, you are in for a real treat with Doug's book entitled "The Institutional Revolution."

I wrote a review of it for Amazon.com. Nonacademics should definitely not be put off by the the fact that this book is published by the University of Chicago. It is readily accessible book. Allen applies economics from dueling to the rise of the civil service to the rise of public police departments to why private lighthouses declined. People have a tendency to assume that the way things are organized today is the way that they always have been. Yet, it was not until the nineteenth century that policing in England became publicly provided (the same is true in the US).

Have you ever wondered why dueling got started or ended? Why the detailed rules were set up the way they were? Why seconds were used?

Given my own interest in crime, the discussion on the rise of public police is especially interesting. Who would have thought that so much could be explained by just the standardization of goods? Standardization, with the increased anonymity of exchanges, made it easier to steal.

How about this for an interesting fact: "By 1890, 'only three people in all of England and Wales were sentenced to death for murder committed with a revolver.' All of this was done in the context of private provision of police and justice." (I will just add that this was in an era when gun ownership was very common and there were no gun control laws.) But this is just one example of the fascinating facts that one continually comes across in Allen's book.

One question that I had in reading the discussions for the end of private lighthouses or private law enforcement was how much of this was a desire to create wealth transfers. For example, it is possible that firms turned to public law enforcement to stop theft from their factories and shops because the government was better at doing this job, but could it also be possible that private firms simply wanted someone else (namely taxpayers generally) to pay these costs?

Indeed, this last point seems to have played a role towards public law enforcement in the US where we went from private companies paying for law enforcement to public provision where others had to foot the bill. Anyway, it would have been interesting to see more of a discussion of other explanations.

I would also have liked to see some discussion of the relative costs of public and private provision. For example, if public provision runs twice as expensive as private provision (see Milton Friedman's old rule or a comparison of public and private schooling), whatever benefits there might be from public provision have to be weighted by these relatively higher costs. There is also the issue of whether you get the same output per hour of work in public provision as you get from private provision.

But one verdict is clear: this is a very interesting book and it will provoke much discussion.

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