The effects of cyberspace on the economic theory of the state

3. The effects of cyberspace on the economic theory of the state* Eli M. Salzberger and Niva Elkin-Koren 1 INTRODUCTION The Western world celebrates two centuries of liberal democracy in theory and about one century of liberal democracy in practice. Concepts such as majority decision making, representative government, human rights, the rule of law and separation of powers have become self-evident. Our debates concerning the good state and good government take these concepts as presuppositions, which do not require additional justification or reasoning. Indeed, we live in the paradigm of liberalism.1 The term ‘paradigm’ was used by Thomas Kuhn, when he put forward a theory of the development of natural science (1962). But his description of the evolution of science can be extended to the way we think about normative issues, about practical laws rather than merely theoretical ones. The current political theory discourse is conducted within the boundaries of the liberal paradigm. The current debate is based on a set of presuppositions, which was left unchecked through the last 100 years. The paradigm of liberalism, which is the result of the Enlightenment, as well as technological breakthroughs of the modern era (such as the invention of the printing press), has been shaken by the technological revolution of the last decade. This chapter examines whether cyberspace requires a paradigmatic shift in our thinking about collective action, the public sphere and the state. Cyberspace may affect the normative and positive economic analysis of the state and its main….