The State of State (PDF)

One of the most astonishing features of social, economic, and political life is that large-scale patterns, structures, and behavioral regularities sometimes develop without anyone intentionally planning their occurrence, or without anyone deliberately working to bring them about. They evolve as a specific kind of unintended consequence of human action. They are the result of invisible hands. Building on Adam Smith's classic concept of "the invisible hand," this study presents a general approach, based on the theory of games and evolutionary theory, to explain such large-scale unintended consequences within markets, communities, and the state. This analysis by Nils Karlson is further used to explain the growth of the modern "welfare" state. It shows how an unconstrained democratic state through two distinct invisible-hand processes, the logic of conceit and the logic of opportunism, may develop into a "equilibrium" state, "The State of State." His work moves classic political economy into the world of political sociology. A normative contractual model is presented and the relative desirability of the state, markets, and communities is discussed. A major conclusion is that it is a choice between imperfect alternatives, involving decisions about more or less, rather than absolute judgments of an either/or variety. It is nevertheless suggested that society ought to be radically depoliticized and that constitutional constraints should be introduced in the universe of policy-making.