Advanced Capitalism and Advanced Democracy: Of Modules, Marshmallows, and (maybe) Monarchs

This article is a modest response to George Priest’s lament that academics should pay more attention to capitalism as an institution. Fundamental to contract and property, which George described as forming the bedrock of capitalism, is the counterintuitive ability of participants to exercise a modicum of self-restraint, in what Tocqueville called “self-interest rightly understood” (SIRU). The article tracks permutations of the SIRU puzzle in various guises, including the famous Marshmallow Test of young children, as well as in other theoretical work on property. The upshot is that SIRU is explicable in close-knit groups, but much less so in the stranger relationships of advanced, large-scale capitalism. Moreover, the SIRU mystery is replicated in the kinds of advanced democratic institutions that arguably enable large-scale capitalism. Hence the development of both advanced capitalism and advanced democracy may owe their origins to accidental historical circumstances.