Re:The Walled Garden Has Won
by stcredzero on Sunday March 13, 2011 @10:46AM
(#2319274)
I think you are only partly correct: there was a natural barrier imposed upon free-ranging economic expansion right where the west coast of North America meets the Pacific Ocean.
This doesn't affect my analogy so much.
...you have to start estimating the opportunity costs of your neighbors as an input to transaction costs, and it's cheaper to put contractual arrangements in place than to settle disputes.
There was emotional reaction against barbed wire. The barbed wire fences were there, otherwise the contractual arrangements wouldn't work very well. With the fences, it's a lot easier to know whose land you are on and whose cattle are grazing where.
I think you are only partly correct: there was a natural barrier imposed upon free-ranging economic expansion right where the west coast of North America meets the Pacific Ocean.
Although I don't dispute any of the points you make, you left out the question of economic scarcity. In the case of the cowboys, if land were free then moving a herd to fresh pastures would be a simple matter of calculating time * # of animals lost per day of transit. but once you run of free land, then you have to start estimating the opportunity costs of your neighbors as an input to transaction costs, and it's cheaper to put contractual arrangements in place than to settle disputes.