Anne Mayhew

Contrasting origins of the two institutionalisms: the social science context

Work of institutionalists, both old and new, is usually compared to that of other economists. Here it is compared to developments in other social sciences. Old institutionalism is based on a strategy of seeing mankind as product of culture; old institutionalism is part of culture-based twentieth-centry social science. New institutionalism has developed in a peiord when the trend is to favour a view of mankind as ‘rational chooser’. In part this trend reflects an adoption of the models of neoclassical economics by other social scientists. Parallels in the development of the new institutionalism and the development of choice-focussed approaches in other social sciences are too many and too close to be coincidental, but there are no simple explanations of why the two developments are so similar. Comparison of the two contexts does, however, allow clarification of debates over rationality and endogeneity of institutions. It also leads to the conclusion that the questions aksed in the two institutionalisms are...

The National Banking System and Southern Economic Growth: Evidence from One Southern City, 1870–1900

Evidence from banks in one southern city casts doubt upon the view that the quasi-monopolistic structure of the national banking system financed American industrialization by depriving southern and western regions of relatively inexpensive money. An increased number of national banks were lending much more locally in the 1880s and 1890s in Knoxville, Tennessee, than they were in the 1860s and 1870s. The national banking expansion and associated expansion in the number of state-chartered banks appear to have resulted from a local boom rather than from removal of barriers to entry.

Foreign Investment, Economic Growth, and Theories of Value: Evidence from Economic History

This chapter advances two propositions: (1) foreign investment is not needed for economic growth; and (2) foreign investment is wrongly thought of as a requirement for growth because of a deep confusion of machines and of financial claims on those machines. I begin by reexamining evidence for the first proposition and then try to explain why this evidence has not altered the view that monetary foreign investment is required for growth.

An Introduction to Institutional Economics: Tools for Understanding Evolving Economies

The analytical approach, that is, the Original Institutional Economics (OIE), is shown to be founded on three interrelated concepts—enculturation, empiricism in aid of both understanding and policy, and evolution—that are crucial to understanding economic systems. The theoretical framework that has been constructed by institutional economists over the past 100 or so years is explored as are some of the theoretical controversies of recent decades. Differences and similarities between OIE and textbook economics, as well as noninstitutionalist heterodox approaches to economics, are delineated. Finally, three recent works of Institutional Economics—a study of the use of consumer credit, of the labor market associated with casinos, and differences among markets—are used to illustrate the OIE approach in use. JEL Classifications: A12, B15, B25, B40

Fred Block and Margaret R. Somers: The Power of Market Fundamentalism: Karl Polanyi’s Critique

Fred Block and Margaret R. Somers, both distinguished sociologists, have produced a book that is all of the following: (i) an account of the life and career of Karl Polanyi, paired with a summary o...

Hobson, Veblen and American Institutionalism

Was John A. Hobson an institutionalist? Institutionalism has usually been regarded as peculiarly American. However, Hobson shared with the institutionalists an appreciation of the inadequacy of received economic theory to describe an industrial society. More importantly, many of his own analyses were similar to those of American institutionalists. We here attempt to answer our question by looking for a common core in the analyses of both. In doing so we focus upon a comparison of Hobson and Thorstein Veblen, who was a contemporary of Hobson’s and who first articulated many of the basic propositions of institutionalism.1