The Economic Value of Ideology
Universidad del CEMA, Serie Documentos de Trabajo - No. 378
18 Pages Posted: 18 Sep 2008
Date Written: August 2008
Specialization and trade rest on institutions that protect property rights and enforce agreements. Frequently, in economic analysis institutions are just assumed to exist, or it is implicitly supposed that the political game can establish them. Once this assumption is done, the invisible hand does its work properly. It doesn't matter if humans beings are benevolent or selfish for the gains from specialization and trade be realized. However, it is not easy to build institutions, neither are they a free lunch. The paper shows that ideology, understood as a self-imposed code of conduct, contributes to reduce the cost of instituting an industrious society, inducing people to assign their time and effort to productive activities rather than to theft.
Keywords: ideology, self-imposed codes of conduct, crime, enforcement of property rights
JEL Classification: K42, Z13
Suggested Citation: Suggested Citation