TexasBob noted that "Is it possible to have any economic freedom in a theocratic state?," or something to that effect. That's a loaded question. I understand what he is getting at, but the phrasing of the question is where I take issue.
1) First, I don't like the phrase "theocratic state." When people talk of the state, they usually have the modern monopolist-territorial taxation machine in mind (Hoppe's definition). Most theocrats (I don't even think I am one, but that is beside the point) are actually against such a state.
2) Anyway, TB's point assumes a statist outlook. He is assuming a top-down structure. Again, most theocrats have opposed that outlook. Given a theonomic model, the govt would only be financed by 10-13% of the people's income. The modern state is financed by 40-70% of the income. Simply stated, it is hard to start pogroms without a large bank account (which a theocratic state wouldn't have). A theonomic model would be a loose confederation of independent commonwealths.
3) Why haven't theonomists responded to Douglass North? I don't know. Probably because most theonomists are dead by now. And to the living ones (Gentry), they are responding to challenges that are not economical in nature. But North is an economist. Surely he could do it. Yes, he could. I don't know why he doesn't. I think with the election coming up, crash of the dollar, and rise of a statist govt, he has other things on his plate.
TB, I appreciate your questions. I don't know if I will pursue this line of thought in the near future (might come back to it). I don't really consider myself a theonomo-theocrat, so I won't spend much time defending them.