Neo-classical economics textbooks
proclaim that markets endowed with private property rights and
contracts are better equipped to deliver wonders—efficiency and equity. But
in the real world, as is incidentally being experienced amid the ongoing
global economic crisis, it does not happen that way, at least always. Even the
prophet of market economy, Adam Smith, is perhaps aware of it when he said:
"Creating harmony between the pursuit of self-interest and the pursuit of
social welfare depends on the constraints on self-interest." But the scope for the
operation of such a `constraint' on man's behavior appears slim: for `Man',
as enunciated by grandsire Bhishma in The
Mahabharata, is a slave to money—arthasya purusha
dasah. The ongoing world economic crisis is,
perhaps, a vindication of this prophecy.
Fortunately, there are off-beat researchers of modern day who have
analyzed as to why the world looks the way it does—different from the ideal
world found in classical textbooks—and explained as to what works in it. It is
to two of such researchers—Elinor Ostrom of Indiana University,
Bloomington, US, and Oliver Williamson of University of California, Berkeley,
US—that the Nobel committee has awarded the Nobel Prize in Economic Sciences
for the year 2009. They share the prize for their separate research into
economic governance—the rules by which people organize, cooperate, relate and
exercise authority in companies and economic systems—that "advanced
economic governance research from the fringe to the forefront of scientific
attention." The committee observed that their
research revealed how economic analysis could explain most forms of social
organization.
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