The Liberty of Progress: Increasing Returns, Institutions, and Entrepreneurship

37 Pages Posted: 2 Jun 2016 Last revised: 15 Oct 2016

Peter J. Boettke

George Mason University - Department of Economics

Rosolino A. Candela

Brown University

Date Written: September 30, 2016

Abstract

This paper argues that liberty and progress arose due to the generalized increasing returns to economic activity. These increasing returns follow from the gradual, cumulative process of institutionalizing liberties. As a society adopts an institutional framework from accumulated liberties, there is greater scope for productive specialization and social cooperation under the division of labor. Greater scope for market exchange also delivers social norms and commercial values that tolerate experimentation and innovation. Taken together, the accumulation of liberties, the institutionalization of liberty, and the generalized increasing returns to economic activity unleash the creative powers of a free civilization to deliver societies from poverty and subjugation.

Keywords: Entrepreneurship, Institutions, Deidre McCloskey, Douglass North

JEL Classification: A12, B52, B53

Suggested Citation

Boettke, Peter J. and Candela, Rosolino A., The Liberty of Progress: Increasing Returns, Institutions, and Entrepreneurship (September 30, 2016). GMU Working Paper in Economics No. 16-24. Available at SSRN: https://ssrn.com/abstract=2787986

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Rosolino A. Candela (Contact Author)

Brown University

Box 2005
Providence, RI 02912
United States

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