But it is precisely that inescapable fact --that perverse micro-incentives at the individual level, driven by basic human nature, run everything at the ground l

But it is precisely that inescapable fact --that perverse micro-incentives at the individual level, driven by basic human nature, run everything at the ground level-- that often creates the need for institutions like government in the first place! Whenever there are tragedy-of-the-commons like externalities / collective action problems, in many cases it is provably superior to have even highly deficient government-like institutions than fully unconstrained individual action[1]. Think, for instance, any of today's failed states to see what total lack of basic governance actually looks like. [1] http://en.wikipedia.org/wiki/The_Logic_of_Collective_Action http://en.wikipedia.org/wiki/The_Logic_of_Collective_Action