Description
Book SynopsisFrom the first stock markets of Amsterdam and London to the millions of credit card transactions governed by arbitration, privately produced and enforced economic regulations are more common, more effective, and more promising than commonly considered. In Private Governance, prominent economist Edward Stringham presents case-studies of the various forms of private enforcement, self-governance, or self-regulation among private groups or individuals that fill a void that government enforcement cannot. Through analytical narratives the book provides a close examination of the world''s first stock markets, key elements of which were unenforceable by law; the community of Celebration, Florida, and other private communities that show how public goods can be bundled with land and provided more effectively; and the millions of credit-card transactions that occur daily and are regulated by private governance. Private Governance ultimately argues that while potential problems of private governa
Trade Review"Private Governance is a masterpiece of economic, philosophical, and legal reasoning that will shake progressive ideology to its foundations, and, if read by enough young people, dispatch it to a waiting grave." Andrew Napolitano, Fox News "Stringham dispels state-worshipping fiction with historical fact to show how good governance has preceded Leviathan, ignores it when necessary, and can surpass it when it fails." Peter Thiel, Entrepreneur "If you read this book you will have to readjust what you think is possible. A masterful account that mixes history, theory, and a deep understanding of what contracts really mean." Michael Munger, Duke University "The dominant view in economic and political theory is that markets can only exist in the 'shadow of the state.' This superb volume challenges this contention head on." Mark Pennington, King's College London "Explains how private governance can work in theory and carefully details a series of real-world case studies to illustrate how it actually works. Stringham writes so well that this book should be appreciated and enjoyed by academics and non-academics alike." Bruce Benson, Florida State University "The theory and practice of private provision of protection, security, and adjudication has a long and distinguished history. Private Governance is an extremely important contribution to understanding this issue." Leonard Liggio, Institute for Humane Studies "Adam Smith brought us the 'invisible hand.' Now, Stringham brings us 'private governance.' Am I going too far in comparing Stringham to Smith? Maybe so, but it is because Smith does not deserve to be mentioned in the same sentence as Stringham. Read this book (that's an order!)." Walter Block, Loyola University-New Orleans "Brimming with surprises and intellectual curiosity. Stringham turns the conventional wisdom on its head, in delightful and convincing fashion." Tom Woods, Historian "Masterfully weaves economic analysis with little-known history and elegant storytelling to demonstrate the power of individuals to create order without law or government. Essential reading for policy-makers, academics, and anyone else with questions about the power of freedom." Marcus Cole, Stanford University
Table of ContentsWhy private governance? ; 1. Introduction ; 2. Beyond the deus ex machina theory of law ; 3. Rules from voluntary associations as an alternative to coercive ones: Governance as a club good ; Privately governed markets in history and modern times ; 4. Markets without enforcement: Reciprocity and reputation mechanisms in the world's first stock market ; 5. The evolution of rules in exclusive clubs: From coffeehouses to the London Stock Exchange ; 6. Markets creating transparency: Competing listing and disclosure requirements from the Big Board in New York to the Alternative Investment Market in London ; 7. How technologically advanced markets can work even when fraud is "legal": Ex ante risk management by PayPal and other intermediaries ; 8. Bundling governance with bricks and mortar: Private policing in colleges, in California, North Carolina, and beyond ; 9. The most personal form of private governance: Individual self-governance ; 10. When third party review is <"necessary>": Adjudication by contract ; 11. Does private governance work in the most complex markets? Successful risk management on Wall Street even in the wake of the 2008 economic downturn ; Lessons of private governance ; 12. The relationship between public and private governance: Does the state help or crowd out good governance? ; 13. Applying Hayek's insights about discovery and spontaneous order to governance ; 14. The unseen beauty that underpins markets
