Rights and their protection

Author: Chen Shun
Publisher:
Publish Date: 1999-08-01
Features: For humans, the resources used for survival are always limited. Only by properly defining, maintaining, and allocating rights to resources can conflicts be effectively reduced, transaction costs lowered, division of labor and cooperation promoted, and the benefits of shared prosperity enjoyed. The formation and evolution of corporate organizations are the result of saving transaction costs, which is the essence of new institutional economics. What is attempted to demonstrate here is that the formation and evolution of political organizations also follow a similar pattern: the cost of individuals maintaining their rights is too high, or they can only maintain very limited rights. Using an organization with coercive power (the government) to represent individual rights can significantly reduce transaction costs, allowing everyone to enjoy more rights. However, the coercive power of the organization can easily become a factor that infringes on individual rights. The method to eliminate its side effects is to introduce competition, constraints, and incentive mechanisms. Using a set of rules that can achieve social consensus (the constitution) to handle various public affairs can significantly reduce transaction costs, but the key is that these rules must be truly agreed upon or recognized by the people and persistently observed and maintained.