TCS Daily

Ideology Is Infrastructure

By Will Wilkinson - January 26, 2004 12:00 AM

On the Tigris river in Northeast Iraq, American construction giant Bechtel busies itself repairing the span of the Tikrit bridge on the road to Kirkuk. Down south in Umm Qasr, Bechtel dredges the port, gateway to the Persian Gulf and the trade routes of the world. Meanwhile, in Bagdhad, the Coalitional Provision Authority struggles to shape Iraq's political infrastructure -- its constitution. Clean water is in the works, as is a system of reliable electricity. But bridges, sewage systems, central banks, paper constitutions and the like are not enough to set Iraq on the path to stable prosperity. Another kind of infrastructure must be set firmly in place if Iraq, or any state emerging from oppression or poverty, is fully to join the modern world.

The priority of this deeper infrastructure is obscured by mainstream economic theory. Economic theory often takes for granted that which is most difficult to achieve. Most economists begin their analysis by assuming a market where property rights are clearly delineated, contracts are unfailingly enforced, and information is immediately available to all market participants. Similarly, they assume a state that can efficiently implement a system of public finance and provide "public goods" when the market "fails."

When we begin with a framework of well-functioning markets and a well-functioning state, it is easy to become distracted by arguments framed by our idealized assumptions. Economists and political theorists have worked themselves into carpal tunnel arguing whether public goods -- national defense, law enforcement, transportation systems, vaccinations, and so forth -- can be provided by voluntary contractual mechanisms on a free market or require state coercion to solve the problems of coordination inherent in providing these goods. However the entire debate over public goods simply assumes a deeper order of public goods -- goods that are a pre-condition for well-functioning markets and states.

The Nature of Public Goods

What are public goods, exactly? A good is public in the economist's sense if it has two characteristics. First, it must be difficult to exclude others from using the good (non-excludability). Second, use of the good by one person does not diminish the benefits of use available to others (non-rivalrous consumption). A pair of Dockers is a typical private good; we can't all wear a single pair of pants at the same time, and it is fairly easy to keep people out of your pants while you're wearing them (assuming you want to). National defense is a typical public good; if our borders are well defended, all contained within will enjoy the benefits, and it's hard to exclude anyone, including visitors from France, say, who, because they did not chip in for the F-15s, are getting a "free ride."

Now, there are markets everywhere people trade, and people trade everywhere. However, complex, extended, impersonal market orders like ours are the exception, not the rule. Most markets in most places and times are pretty limited in scope, mostly involving face-to-face relationships, and local networks of reputation. But this sort of market can't manage the kind of coordination necessary to produce a microchip or a tablet of Viagra, or allow you to walk up to a counter with a piece of plastic, talk to someone you've never met, and drive away with $15,000 of somebody else's property, all without using your children as collateral. Our sort of advanced market is a big achievement, and is itself a kind of very special kind of public good.

Although individuals enter into market relations in order to reap for themselves the benefits of trade, it's worthwhile for all market participants to help systematize and codify the terms of trade, coordinating expectations and reducing the costs of arriving at and enforcing agreements. Once such a system is in place, anyone in the neighborhood can take advantage of it, whether or not they were responsible for its development. That is to say, it's hard to exclude new entrants from the use and benefits of the market. And new entrants do not reduce the value of the market for other participants. On the contrary, by increasing the extent of the market, and refining the division of labor, new entrants increase the value of the system as a whole.

State of Grace

At this point, it is common to point to the role of the state in helping to bring about the public good that is an advanced, well-functioning market. States can help to codify complex bundles of tradable property rights, protect those rights, enforce contracts, adjudicate disputes and more in a way that enables the development of complex market orders. But, again, we can't simply stipulate well-functioning governance into existence. Just as complex, extended markets are the exception, so too are well-functioning states. At most places and most times, states actively inhibit the kind of coordination they are meant to enable. Think Zimbabwe.

Because agents of the state have special coercive powers, a big problem arises: how are we to ensure that a state that is strong enough to help define rights and enforce agreements will not simply use its power to prey on its citizens and usurp the gains from market cooperation? In order to function, the state must be able to finance its activities through a tax system. But people don't like to pay taxes, especially if the people who are supposed to collect them steal the money. Or if the people with ultimate political power buy themselves palaces, or warehouses of rocket propelled grenades, instead of building a sewage system, like they said they would.

So we are pushed ever deeper in search of the ultimate source of public goods. States cannot provide public goods to facilitate the development of the market unless the market is already producing enough wealth to finance the state. And the market cannot produce enough wealth to finance the state unless people are able independently to define some sorts of property rights, and enforce some sorts of agreements. What's more, the state can't finance itself unless the bureaucracy has avoided corruption, mechanisms of enforcement are robust, but not abused, and citizens find that it makes sense to comply with the laws.

The Ultimate Public Goods

At bottom of both well-functioning markets and states are norms of behavior that dispose people to cooperate, to keep agreements, and to recognize and respect claims to property and a certain degree of personal autonomy. These norms are the ultimate public goods, and constitute the moral infrastructure of society. The moral infrastructure, and the system of norms it comprises, is largely a consequence of systems of widely shared belief. To this extent, ideology is infrastructure. A community that shares the belief that property is morally illegitimate, that profit is odious, that the state is primarily a mechanism for conferring special benefits on whatever tribe can dominate it, or that some groups but not others have legitimate claims to peace and prosperity cannot sustain a moral infrastructure -- in which case other questions about public goods are moot.

A moral infrastructure is something neither Bechtel nor the CPA has the power to provide. Canals and constitutions are all for naught if Iraqis don't develop norms that enable the emergence of a complex market and the benign administration of the state. If -- whether because of religious conviction, political ideology, tribal affiliation or whatever -- they don't believe these are norms worth having, then they won't have them. And despite our best intentions, our efforts there will fail.

But Iraq is just one instance among many. Other nations face an even bleaker future. And the UN, the World Bank and the IMF are also impotent to lay the fundamental groundwork for peace and prosperity.

We need to get past arguments about ideal markets and ideal states, and work harder at understanding how even partially functional markets and states get to be partially functional, as opposed to fully non-functional. How do foundational public goods like prosperity-conducive belief systems and social norms ever get going? How can you ever get a predation-limiting constitution that people won't just ignore? How do you build, or grow, a moral infrastructure? That's what we need to understand. Sadly -- and let's hope not tragically -- we still don't.

Will Wilkinson is a Ph.D. student in Philosophy at the University of Maryland, and Director of the Institute for Humane Studies Social Change Workshop for Graduate Students. He maintains a weblog at


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