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  • Was the Real Wild West one of “Institutional Entrepreneurs”?

    Posted by Ginny on February 29th, 2016 (All posts by )

    I don’t read much lately, but my more libertarian daughter listens to Hoover & Cato podcasts.  She mentioned one on The Not So Wild, Wild West: Property Rights on the Frontier  So I ordered the book. I don’t know much about economics but have come to admire economists because they so aptly describe human nature, and often give arguments for wise institutions. The authors argue that “entrepreneurs of institutions” helped make life relatively orderly on the frontier. For instance, one maximized the profits and minimized the costs by ensuring Abilene was railhead, where the cowboys ended their long contracts of driving the cattle and the railroads took them east. But often it wasn’t a “middleman” as much as the consensus of a group, as they set out in wagon trains or obtained mining rights.

    Terry L. Anderson and Peter J. Hill published this in the Stanford Economics & Finance series; the descriptions emphasize a libertarian approach (indeed, Anderson has been interviewed by Stossel).   As I read it and talked about it, more friends showed interest – in some ways it stands on its head the assumptions we might have from some westerns, but in many other ways it explains contracts and relationships that were represented in some classic films.

    In general, it cheers: as Americans pushed the frontier west, we see less of the “wild, wild west” than sensible boundary setting and sometimes quite innovative contracts to lessen transaction costs and increase rents.  Not surprising, the rent seeking of larger governmental bodies is a subtle but repeated theme.

    It may have begun as an introductory text. For me, that was good: I needed definitions of basic terms and concepts (and apparently the user before me – whose notes are often in what I think is Chinese and whose English note next to “The Institutions that Tamed the West” is “too many important terms are contained – reread.” The authors taught economics at Montana; their ancestors had been in those groups heading west in the late nineteenth century, first as miners and cowboys, an ancestry probably many of their students shared.

    Chapters deal with “Property Rights in Indian Country,” problems with trapping and mining, bison and then cattle, “Wagon Train Governments” and “Cowboys and Contracts.” Claims to gold as well as to water, and always claims to land, were decided by often new concepts. The role of force (as by the army) and later the government affects much. The final chapter “Making the Desert Bloom” describes the first more successful institutions and the later, less successful (and more governmental) solutions to distribution of water in desert.

    It is quirky but I enjoyed it. Its implicit message to a novice like me is how important the basics of economic thinking are and how man, left to his own devices, can be creative and productive about institutions as well as technology and art.

     

    10 Responses to “Was the Real Wild West one of “Institutional Entrepreneurs”?”

    1. Robert Schwartz Says:

      Ginny: Do you have a link to the podcasts?

    2. David Foster Says:

      For comparison, it would be interesting to review Agricola’s De Re Metallica, a handbook of mining from 1556. In addition to describing the technology of the time, the book extensively covers the legal and contractual structures that were in place in Agricola’s area, encompassing parts of what is now Germany and the Czech Republic.

      The woodcut illustrations are wonderful and quirky.

    3. Jim Says:

      Hollywood has given us a greatly exaggerated idea of the violence and “wildness” of the Old Wild West. For example in a typical Hollywood movie a stagecoach can hardly get out of sight of town before being attacked by Indians. In actuality in the entire history of the Old West there was exactly one Indian attack on a stagecoach.

    4. Anonymous Says:

      It was neither Cato nor Hoover, but a Bad Quaker Podcast.

      http://badquaker.com/archives/1687

    5. Sgt. Mom Says:

      One of the most interesting books on my shelves dealing with the hard work of making a business enterprise work in the so-called Wild West is – believe it or not – Dan Rottenberg’s “Death of a Gunfighter”, a bio of Jack Slade. Much of the book is really about how those freight and stagecoach companies were set up to serve the trans-Mississippi west, and how they were operated, by dint of a lot of very hard work by the entrepreneurs and managers who ran them.

    6. Bill Brandt Says:

      Much of the mining law today originated in the boom town of Virginia City, NV

    7. brer rabbit Says:

      It is commonly believed that the people who use the market place -either as buyers or sellers -must be regulated. The economy must be planned. That if there is no plan, no regulation, no licencing – then only chaos can result.

      Even the most primitive tribes live by the rule “from each according to his ability, to each according to his need”. Socialism is to humans what living in the herd is to cattle or living in the pack is to wolves. For humans, socialism is the product of evolutionary forces. Only socialism can produce modern day Venezuela or Soviet Russsia or Nazi Germany.

      Socialism always produces death, destruction, poverty and misery. Free markets always produce happiness, wealth, good health, and peace. Which is why free markets are hated.

      Which is why free markets and socialism are incompatible.

    8. Mike K Says:

      I’m reading a series of letters written by my great grandfather’s brother to his wife while he was in the Union Army in 1862-63.

      We have no idea what poverty was until we see what these people lived through. He was killed in 1863 at Vicksburg. I have no idea what happened to her and their children.

    9. Ginny Says:

      Well, that lasted months in Plymouth and not even that long along the frontier. I think our desire for property is much stronger than you imply – and much more innate. Secondly, our desire to provide for our family is also powerful. It is, indeed, the power of these that make socialism such an inadequate and energy-sucking enterprise. Indeed, our tendency toward putting our selves first is natural – and can be the source of much evil but is also what makes a family survive as the central structure of our identity.

    10. Will Says:

      Badquaker. Haw!

      Further evidence that you should just hang around another day, just so you can see what comes along. Imagine my dismay when I visited only to learn it was no more.

      Thou dost howl.