Wed Oct 14th, 2009 at 08:09:50 PM EST
Unlike some of the previous winners of the Nobel Prize in Economics, it is quite hard to pigeonhole Elinor Ostrom's politics on a left to right spectrum. Her work has plenty of political implications, to be sure, and the Nobel committee's award is also - consciously - political. But the award is not partisan. Claiming Ostrom for the left would be mistaken; it is better to just look at her work and its implications.
When a Times of London columnist (h/t to Sven) starts touting Ostrom's research as a potential template for 'compassionate' or pro-poor policies by the Tory party, though, it is timely to call attention to a few statements she made on equality, which may not fit so well with delicate Tory sensibilities. Statements like "Being born rich is always bad."
Two years ago, Ostrom was in Germany and held an interview with the Frankfurter Algemeiner Zeitung, which already predicted her Nobel in economics at the time (read it back in the day, but now via Time). Some translated quotes from that interview:
Inequality is dangerous. When the rich are floating at too extreme altitudes, they are completely unable to understand the needs of the poor. When there are more and more rich, and thereby people who think that they are something better, that is not good for a democracy. Furthermore, excessively large fortunes are usually also economically unproductive - at least in the third generation of businesspeople. The classes that are born rich are usually neither very capable of dealing with life in general, nor very entrepreneurial. They use up their inherited fortune and the social capital that comes with it, rather than building up anything. Being born rich is always bad.
On the role of the state versus civil society in reducing inequality:
Politics does play a role. It is for instance very important for the cohesion of a society that the state does not discriminate, but guarantees universal access to public goods and other state services, for instance healthcare and old-age pensions. That does not mean that every citizen has the exact same level of use. Only access needs to be free of discrimination. It is also very important that the state does not also produce the things it provides to citizens with their tax money. State-run day-nurseries are an example. [...]
When it comes that far, not enough room remains for a society to experiment with innovative solutions and learn new things. This holds in general: everything that supports diversity creates social capital and thereby serves society. Central control systems and one size fits all solutions are never helpful. That is really important to me: The diversity of societal options is of overriding importance. That is the only way you can benchmark, that is the only way you can have competition. When an approach goes the wrong way, then diversity gives us a choice, then we can learn from one another, employ our creativity and turn to new things. Therein lies the charm of federalism.
To summarise: Ostrom finds current levels of inequality to be dangerous for democracy, despises inherited fortune, and feels that the state should focus on providing quality public services and social security, without running those services itself.
The interview is very interesting because it directs Ostrom's attention to general political issues in the west, which is not usually her focus (that being the management of ecosystems, or 'social-ecological-systems' and other commons worldwide). Henry Farrell of Crooked Timber has some further thoughts on that:
Her work implies that both pure marketization and top-down government control can have badly adverse consequences for resource management, because they rob individuals of the capacity to govern themselves, and because they both lead to the depletion of important forms of local collective knowledge. Alex Tabarrok is right to see something Hayekian in Ostrom's arguments - but it is Hayek against Hayek. Ostrom stresses repeatedly that even the best functioning markets are undergirded by an array of collective institutions which order people's market interactions, and that in the absence of such rules, self interested behaviour will have highly adverse consequences. Perhaps the closest parallel to Ostrom's work is Jane Jacobs'.
You could even read some old Burkean conservatism into Ostrom's work if you try hard. But, as you see, she's not saying that we should leave everything in its natural order, but rather that we should have diversity in order to have progress.