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Solomon's Knot by Robert D. Cooter, Hans-Bernd Schäfer

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Chapter 4

Make or Take

In a coral reef, an animal (polyp) creates a hard shell around itself that protects many single-celled plants (zooxanthellae) living within its flesh that produce food and energy. Similarly, the state is needed to protect the makers of society’s wealth from the takers. Without protection of property, people hoard their wealth instead of investing in the future. All countries have makers and takers of wealth, but the balance between them differs by place and time. Most rich nations today became wealthy because the state and social norms channeled the efforts of their citizens into making wealth.1 Conversely, many poor nations stay that way because the state and social norms channel too much effort into taking wealth from ...

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