An excerpt from a blog post of mine, “We, the People“, (June 2007), offered here for no particular reason:
One is forced to the generalization that at the level of the individual, it is all exogenous, while at the level of the society, it is all endogenous. Take the market, for instance. To an individual, price is something that is a given and whether he or she participates in the market or not, cannot change the price. Price is determined externally and is indifferent to the efforts of the individual. It arises almost magically from the collective interactions of the individuals in the market. Price arises out of, and is a reflection of, “the collective will” of the people, so to speak. Prices are democratically determined in competitive markets. Which brings me to the other example of the generalization above: governance.
A government is determined exogenously at the level of the individual but is endogenous at the level of the society. No single person’s actions can affect the governance of a society. The individual is a “government taker” in the same sense that an individual is a “price taker.” You take what you are given. But collectively, society chooses the government. Governments, like prices, are endogenous to society but exogenous to individuals.
Why do different societies end up with governments that differ qualitatively? The short answer would be that it is so because societies themselves differ qualitatively. People — not individuals — deserve the government they get. Leaders reflect the soul of the people they represent. A society’s leadership cannot be corrupt, morally bankrupt, myopic, unethical, illiterate and stupid unless the people as a collective are themselves so. Enlightened leadership is the lot of people who are themselves enlightened. Leadership is endogenous.
