The Detailed Inquiry Of The Economic Philosophy About North Paradox

In his classic Structure and Transition in Economic History, Douglass C. North proposed that the existence of a state is the key to economic growth, while the nation is the rootstock of contrived depression of economy. This is the famous North paradox. Most of domestic scholars, following North's ideas, used to make explanations from the perspective of the relationship between the state and property rights. However, the author believes that this kind of discussion is not that satisfying. By analyzing capitalistic competition economy, I put forward a view that the root of North paradox is evolution from the systems of capitalistic free competition economy to the systems of monopoly economy. Therefore, the criticism and controversy on competition and monopoly economy of western economists is an effective way to explore North paradox. Western capitalistic nations can not efficiently settle the problem of North paradox due to their nation's limitation of economic function and side-effect of competitive system, while socialistic nations could theoretically eliminate the phenomenon of North paradox by establishing socialistic market economy, setting up a healthy environment for competition and ultimately converting nation's economic function.