Glorious Revolution Week, the end: are institutional economics a gamy theory?

The Glorious Revolution is a cardinal event in the eyes of modern economic historiography. Not only did it provide the setting for the Industrial Revolution, but it also became a textbook example of the impact of institutional change upon the economy. The 1989 article by North and Weingast is said to be the most quoted in the discipline. Indeed it formalized the process of historical change, but also strongly hinted at what good institutions should be.

North D. and Weingast B. (1989) The economic impact of institutions

North, Douglass C. and Barry Weingast (1989) “Constitution and Commitment: The Evolution of Institutional Governing Public Choice in Seventeenth-Century England”, The Journal of Economic History, 49/4: 803-832.

Disclaimer: this summary is written by the contributors of the blog and not by the author of the article. Any mistake is Manuel’s fault (and he shall be punished).

“Put simply, successful long-run economic performance requires appropriate incentives not only for economic actors but for political actors as well. Because the state has a comparative advantage in coercion, what prevents it from using violence to extract all the surplus?”

The XVth World Economic History Congress is over!

Oooof, it’s over!

The 15th World Economic History Conference’s over, over 1300 participants from every continents, sort of the Olympics for hitory buffs and math geeks put together. On the very positive side: no organizational problems, everything seems to have moved smoothly and if it wasn’t for the quality of Dutch food in general the whole thing would have been perfect on a logistics point of view (thank you Jessica and Paula).

On The Economist view of what the crisis means for economics

The meltdown of modern economic theory.

The Economist has published on its last edition three articles on the impact of the crisis on economics as a science. The first article is a general view on the matter, the second has to do with macroeconomic debates and the third on the state of financial economics.

I think that readers will find it interesting to read the reflection of The Economist’s writers on this issue. How is it that economics got into this impasse?

Here are some excerpts that I found interesting in each of the articles.

De Roover R. (1955) Old dead right men

De Roover, Raymond (1955) “Scholastic Economics: Survival and Lasting Influence from the Sixteenth Century to Adam Smith”, The Quarterly Journal of Economics, 69/2, 161-190.

However economics textbooks sometimes mention Thomas Aquinas, they generally overlook the fact that he was followed by almost five centuries of refined followers who greatly improved and expended his system. Of course, those scholars never considered economics as a field in itself but as an appendix to ethics and law (p.162).