Information, organization, and freedom: Explaining the great reversal

We suggest, in a Coase-Demsetz perspective, that the social demand for individual rights—or freedoms (whether civil, political or economic)—is derived from, because complementary to, the changing size of hierarchical organizations. The general downsizing and decentralization process observed worldwide after 1975 is itself the result of the information revolution and the resulting abundance of information. It follows that social demand for freedoms depends in turn—and inversely—on the cost of information (and thus on market imperfection) as well as on traditional determinants such as the distribution of resources and human capital. This implies that freedoms are adopted, implemented, or “produced” by various political regimes according to an objectively observable and contingent determinant. We believe this approach can shed light on the reason for the waxing and waning of freedoms in modern history.