mercoledì 27 maggio 2015

The Equivalence of Economic and Political Allocations

Monateri's Theorem on SSRN

The aim of this theorem is to analyse what does it happen when we introduce violence, threats and self-help, into economic models. This is done considering the alternative between a market or a political allocation. The conclusions are:
a)         That under standard assumptions there is no difference between a market allocation and a political allocation; and so that there is no inner superiority in a market allocation in comparison with a political one
b)         that if we move away from these standard assumptions, then the only real economic problem becomes a politicalproblem, and that there cannot be efficient conclusions which are independent from an initial allocation of force and resources.

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