Great post, I think this captures something very important about how the increasing size of, and focus on, externalities leads to more stakeholder vetos.
I think this dynamic affects private companies, governments and more. While “red tape” appears in institutions, I think the underlying cause of the “red tape” often comes from the behavior of private individuals. And I don’t think the world becoming more “libertarian” (at least in the narrow sense of seeking to shrink government) would necessarily solve much (at least, I wouldn’t expect it to lead to more subway stations!)
I think you’re correct that the underlying cause is individuals, but I do think there is something here about the solution. Private businesses have always had to deal with stakeholders, like suppliers and workers, and have historically been able to deal with this relatively well, because costs to these stakeholders could be compensated with fungible dollars. This allows for mutually beneficial agreements, competition and so on. In contrast, many of the stakeholder vetoes that are created by government do not allow such solutions: paying off stakeholders is considered bribery rather than legitimate payment. It’s true that making rights alienable is compatible with a relatively high degree of government oversight, but most people would probably regard it as a move in a libertarian direction.
Great post, I think this captures something very important about how the increasing size of, and focus on, externalities leads to more stakeholder vetos.
I think you’re correct that the underlying cause is individuals, but I do think there is something here about the solution. Private businesses have always had to deal with stakeholders, like suppliers and workers, and have historically been able to deal with this relatively well, because costs to these stakeholders could be compensated with fungible dollars. This allows for mutually beneficial agreements, competition and so on. In contrast, many of the stakeholder vetoes that are created by government do not allow such solutions: paying off stakeholders is considered bribery rather than legitimate payment. It’s true that making rights alienable is compatible with a relatively high degree of government oversight, but most people would probably regard it as a move in a libertarian direction.