Power And Prosperity: Outgrowing Communist And Capitalist Dictatorships [Paperback]

Mancur Olson (Author)

Book Description

Publication Date: November 20, 2000 | ISBN-10: 0465051960 | ISBN-13: 978-0465051960 0

Why do some economies do better than others? How does society encourage the kind of market economy that generates continually increasing incomes? How do particular styles of government affect economic performance? World-renowned economist Mancur Olson tackles these questions and others in what will surely be regarded as his magnum opus. Olson contends that governments can play an essential role in the development of markets. Reliable enforcement of private contracts and protection of individual rights to property depend on governments strong enough not to undermine them. His exploration of "market-augmenting governments" will stand as a cutting-edge work on economic growth and provide a useful framework in which to consider the Asian financial crisis and its aftermath. As Susan Lee noted in Forbes, "his pioneering insights might have won a Nobel Prize for Olson had he lived a bit longer."

Editorial Reviews

From Publishers Weekly

Olson, whose Logic of Collective Action stands as a landmark work of political economy, died in 1998 before putting the finishing touches on this book. As it stands, it serves as an appropriate coda to Olson's long and productive career, summarizing his major achievements while still contributing new insights to the post-communist debates. As he grapples with the forces that undermine economic vitality, Olson worries over a central question: Why has economic performance been so much better after the defeat of fascism in Germany and Japan than after the collapse of communism in Soviet-style states? In probing this question, Olson examines the complex relationships between the role of the state and economic performance, arguing that "there is no way of explaining the extreme poverty of many nations without taking account of the extent to which they are misgoverned." The lay reader will easily grasp Olson's broad and practical--if not especially vivid--discussions, and specialists will value his excellent analyses of the economic machinations of Soviet-type autocracies, including a fine reading of Stalin's diabolical manipulation of Russia's tax structures. As the world attempts to salvage what's left of the post-communist economies, it must contend with disablingly high rates of inflation and inefficient, state-owned businesses. The challenge ahead is not merely to hasten privatization, Olson says. Instead, economists must work to ensure that a "market-augmenting government" first secures individual rights to private property and guarantees the impartial enforcement of contracts--in his view the two essential ingredients for prosperity. (Mar.)
Copyright 2000 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

Review

"Power and Prosperity is an important book, written with clarity and verve. It is a great misfortune that Mancur Olson is not here to respond to the debates that it will surely provoke." The Wall Street Journal

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Product Details

• Paperback: 272 pages
• Publisher: Basic Books (November 20, 2000)
• Language: English
• ISBN-10: 0465051960
• ISBN-13: 978-0465051960
• Product Dimensions: 8 x 5 x 0.7 inches
• Shipping Weight: 8.5 ounces (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (22 customer reviews)
• Amazon Best Sellers Rank: #559,614 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

23 of 23 people found the following review helpful:

5.0 out of 5 stars Balanced, Insightful, and relevant, December 8, 2004

By 

D. W. MacKenzie (New London CT) - See all my reviews
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This review is from: Power And Prosperity: Outgrowing Communist And Capitalist Dictatorships (Paperback)

Power and Prosperity is an example of economics at its best. First of all, it takes a balanced or neutral approach to its subject matter. The author is not out to prove the superiority of either markets or government. Governmental power is a double edged sword to Olson. Government power promotes prosperity by restraining 'roving bandits' or special interests. Government power is also susceptible to the influence of special interests. Olson also discusses the merits and faults of markets. Markets are ubiquitous and can lead to prosperity, but often do not. Government has a role in this. That is, he finds blame for this in the most negative aspects of government. Olson does not assume market efficiency either. He explains it, as well as some possible limitations to markets.

This is also a highly insightful book. Much of his analysis derives from his earlier work on "the logic of collective action'. He also uses some transaction costs and basic supply and demand/substitution effect reasoning to explain historical events. Students in my comparative classes had more trouble with this book than any other, but it is still manageable. Reading it might be difficult for those who lack an education in economics. But I am not sure if there is an easier way to say what it says, and what it says is most interesting. The concepts the author employs makes a greater understanding of different economic systems and historical periods possible. This is penetrating analysis.

It is also highly relevant. Much of this book focuses on the Soviet Union. One could say that the USSR is a done deal- it failed so forget about it. It is, however, important to understand why it failed so as to avoid repeating such errors in the future. This is what the Author is driving at with in his use of the Soviet example. There were reasons for the failure of the Soviet system that also apply to problems in other nations- not to mention Russia today. The misuse of power has the potential to prevent prosperity as much now as it did under Stalin and Khrushchev.

Does this book have faults? Certainly. Olson takes too positive a view of Stalin's industrialization program (not that he praises Stalin). Olson dismisses complete privatization, or anarchy, too easily. There is nothing wrong with arguing against anarchy. But, his arguments against privatizing the state (i.e private police and courts) are little more than an unsupported dismissal of such arrangements. If he did not want to debate that issue, he should not have taken such a strong stand. He also might have mentioned a few things about FA Hayek- especially on p136 where he wrote "a bureaucracy cannot process all the information needed to calculate an optimal allocation or put it into practice".

While there are a few faults to this book, it is still excellent. It is a must read for anyone interested in either comparative economics and politics, Globalization, or the economic history of the Soviet Union.

38 of 46 people found the following review helpful:

5.0 out of 5 stars A Fascinating Book, February 17, 2000

By A Customer

This review is from: Power And Prosperity: Outgrowing Communist And Capitalist Dictatorships (Hardcover)

I read about this book in the Wall Street Journal and then snapped up a copy. Olson writes so clearly and accessibly that you almost don't realize you're reading a book about economics. Highly recommended for people interested in the future of the world economy and world politics.

17 of 19 people found the following review helpful:

4.0 out of 5 stars Interesting and clear reasoning, April 14, 2000

By 

Willem Noe "scorpio-1" (Berlin) - See all my reviews
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This review is from: Power And Prosperity: Outgrowing Communist And Capitalist Dictatorships (Hardcover)

As a young student I found Olson's 'Rise and Decline of Nations' a very interesting and well-written book. Recently, as an eonomist on international economic relations 15 years further down the road I picked up this book and again was caught by the clear writing and the compelling reasoning. I recently taught a graduate course on East European economic conversion and I would have put this book on the reading list if I had read it earlier. I think the text is sometimes a bit too pat and I would have liked to see more empirical evidence. On the other hand, Olson does make a good case for his theory and I like the hopeful message it conveys. His emphasis on the importance of institution building in economic and social development I think is correct. This is certainly one of the more interesting books I have read on the subject. Recommended!