Growth is a modern phenomenon

Falling real wages normally this means that standards

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Unformatted text preview: EFFICIENT ECONOMIC ORGANIZATION ACCOUNTS FOR THE RISE OF THE WEST Efficient: a system of PROPERTY RIGHTS that Gives individuals incentives to innovate and produce Inhibits activities that reduce individual incentives (theft, arbitrary confiscation and/or excessive taxation) Property rights are a classic “public good”. Why? Non- exclusive, non- rival No one wants to privately produce public goods since essentially someone is gonna come and take it and it’s hard to charge them for that use. But because they are public goods ! under investment in them because of free- riders So the central question is: why did efficient property rights appear in Western Europe? Feudalism: think of property rights in a feudal system Manorial exchange between Lord and serfs = labor services in exchange for output sharing Subsistence; no markets for goods or services; no trade; no money; no innovation Once established, these cus...
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