Fconomlc Growth TbdolEd

4,1 The N@classicot Theory ol Stote
Doughs Norrh(l9sr). in his bok hretu! nd Chtise k FtMni' Eisbry" @rli'cs a
rherr ol sl!r. n innituiioN, exphini.g ho* s!t. shiss a hdare in giing prc!€dv n8hls
dd cx@l'ns dnB Nmed $ M clNidl fiorv ol slsL, ar nishlighls shdlFming in n@
clsid osltsis ud F@s ! d.o.y lo plus ii rhe ssps
still ki op'n in lh' M clGiol
'Ihc n61 shon{ning hisl ign€d ws lhal nco cl.sic.l lhory sms pivrc Erum lo
individuli md sial retum @ eqnst€d, lnd 8. resul! inditidudls ctptuE all thc b'nefils
'l hlt would o.ly b. lhe o6e in pE*nc. of pc ict propert ii3hls (or ztro lmnecrion costs l
tn th. prcsne or pdral pop€ny ngh! ns clskd nodel hold5 and deE is no ndn lit
innnuliors cx*pr ror slf Esulaling nartcis, tnd.djusltDenr su tfiDdglt the chonsc
''
mltBic dE rhc .nmcp in Elstive Fi6. llit chssc tdi@ts fo.toE of plodElio i.lo rh'ir
nd pmfttabl. rs widNr ftcdol instob@Glt tn 6F.ts ro alhrioN in b'rcnB
6d codl by ndnnizing individuls. Ho*cE in st sorl4 6 snirh s slei.li2rtion $ts in
onc onnor lind nalching dpansid ol the mi*.ts. PEsne or n!*els equi€s lh. Drcp.nv
ighk nusl be e-lBi!e, neNBble ed €nrolwblc B€sides, since goodr &c spoialiad,
oost ro masuft its dimension dd ofcnforcing i$ crffs of.xchsgq ft huge Exclusivittof
pFp.rty nghs is baseA d dte nqsurom.ni of lhc utdedying goods. Wh€.lhc$ st rE
hiri, sme of ib cnddisics lhrt mighl oury sn .ommic wlue, sould .ol bc me.surcd.
Thir ydld 6ut. in diff€'lE l'€ls€n it *i!l dd Pnvd. os Coscq$ntly, ihc
ditr tle het*a l'rvde mms.td sid ElMs wnt4, csp€i.lly dE pivarc rctoms or
idas ud dEn ,pplietids, or orh.r rehmlogiql dd.lop|Mr, is lo gull 6 @opt6d ro
thcir saial b.ne[b. Hdne all lhe Fope.ty db ae rot wuEd, and $eE tE tBnecrion
cd! involved. E onomies, i6 pEsnq oarEneclion oosl would Elalively und.r priE th€