front cover of The Illusion of Free Markets
The Illusion of Free Markets
Punishment and the Myth of Natural Order
Bernard E. Harcourt
Harvard University Press, 2011

It is widely believed today that the free market is the best mechanism ever invented to efficiently allocate resources in society. Just as fundamental as faith in the free market is the belief that government has a legitimate and competent role in policing and the punishment arena. This curious incendiary combination of free market efficiency and the Big Brother state has become seemingly obvious, but it hinges on the illusion of a supposedly natural order in the economic realm. The Illusion of Free Markets argues that our faith in “free markets” has severely distorted American politics and punishment practices.

Bernard Harcourt traces the birth of the idea of natural order to eighteenth-century economic thought and reveals its gradual evolution through the Chicago School of economics and ultimately into today’s myth of the free market. The modern category of “liberty” emerged in reaction to an earlier, integrated vision of punishment and public economy, known in the eighteenth century as “police.” This development shaped the dominant belief today that competitive markets are inherently efficient and should be sharply demarcated from a government-run penal sphere.

This modern vision rests on a simple but devastating illusion. Superimposing the political categories of “freedom” or “discipline” on forms of market organization has the unfortunate effect of obscuring rather than enlightening. It obscures by making both the free market and the prison system seem natural and necessary. In the process, it facilitated the birth of the penitentiary system in the nineteenth century and its ultimate culmination into mass incarceration today.

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The Image
Knowledge in Life and Society
Kenneth E. Boulding
University of Michigan Press, 1956
Boulding discusses the image as the key to understanding society and human behavior
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In Essentials, Unity
An Economic History of the Grange Movement
Jenny Bourne
Ohio University Press, 2017

The Patrons of Husbandry—or the Grange—is the longest-lived US agricultural society and, since its founding shortly after the Civil War, has had immeasurable influence on social change as enacted by ordinary Americans. The Grange sought to relieve the struggles of small farmers by encouraging collaboration. Pathbreaking for its inclusion of women, the Grange is also well known for its association with Gilded Age laws aimed at curbing the monopoly power of railroads.

In Essentials, Unity takes as its focus Grange founder Oliver Kelley and his home organization in Minnesota. Jenny Bourne draws upon numerous historical records to present a lively picture of a fraternal organization devoted to improving the lot of farmers but whose legacies extend far beyond agriculture. From struggles over minimum wage, birth control, and environmental regulation to the conflicts surrounding the Affordable Care Act, and from lunch-counter sit-ins to Occupy Wall Street, the Grange has shaped the very notion of collective action and how it is deployed even today. As this compact book so effectively illustrates, the history of the Patrons of Husbandry exposes the classic tension between the desires for achieving overall economic success and determining how the spoils are split.

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In Hock
Pawning in America from Independence through the Great Depression
Wendy A. Woloson
University of Chicago Press, 2009
The definitive history of pawnbroking in the United States from the nation’s founding through the Great Depression, In Hock demonstrates that the pawnshop was essential to the rise of capitalism. The class of working poor created by this economic tide could make ends meet only, Wendy Woloson argues, by regularly pawning household objects to supplement inadequate wages. Nonetheless, businessmen, reformers, and cultural critics claimed that pawnshops promoted vice, and employed anti-Semitic stereotypes to cast their proprietors as greedy and cold-hearted. Using personal correspondence, business records, and other rich archival sources to uncover the truth behind the rhetoric, Woloson brings to life a diverse cast of characters and shows that pawnbrokers were in fact shrewd businessmen, often from humble origins, who possessed sophisticated knowledge of a wide range of goods in various resale markets.
            A much-needed new look at a misunderstood institution, In Hock is both a first-rate academic study of a largely ignored facet of the capitalist economy and a resonant portrait of the economic struggles of generations of Americans.
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In Pursuit of Leviathan
Technology, Institutions, Productivity, and Profits in American Whaling, 1816-1906
Lance E. Davis, Robert E. Gallman, and Karin Gleiter
University of Chicago Press, 1997
In Pursuit of Leviathan traces the American whaling industry from its rise in the 1840s to its precipitous fall at the end of the nineteenth century. Using detailed and comprehensive data that describe more than four thousand whaling voyages from New Bedford, Massachusetts, the leading nineteenth-century whaling port, the authors explore the market for whale products, crew quality and labor contracts, and whale biology and distribution, and assess the productivity of the American fleet. They then examine new whaling techniques developed at the end of the nineteenth century, such as modified clippers and harpoons, and the introduction of darting guns. Despite the common belief that the whaling industry declined due to a fall in whale stocks, the authors argue that the industry's collapse was related to changes in technology and market conditions.

Providing a wealth of historical information, In Pursuit of Leviathan is a classic industry study that will provide intriguing reading for anyone interested in the history of whaling.
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In the Long Run We're All Dead
The Lives and Deaths of Great Economists
Björn Frank
Haus Publishing, 2023

A fascinating and entertaining account of the lives of the most important economists of the past.

Until the late nineteenth century, economics couldn’t be studied at the university level; the field was the domain of well-educated figures whose radical curiosity drew them to a discipline that was little understood and often ridiculed. In the Long Run We’re All Dead tells the story of one of those figures in each of its thirteen chapters. Each of these extraordinary lives is worthy of fiction, and the manner of their deaths, oddly, often illuminates their work. Björn Frank shows us how these economists developed the theories for which they became famous and explains those ideas—utilitarianism, social costs, the endowment effect, and others—with reference to the lives of their creators in an engaging, irreverent, even comic style. Frank also takes daring leaps into speculation, considering how the principles of these long-gone economists might be applied to problems of today and of the future.

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Indian Work
Language and Livelihood in Native American History
Daniel H. Usner Jr.
Harvard University Press, 2009

Representations of Indian economic life have played an integral role in discourses about poverty, social policy, and cultural difference but have received surprisingly little attention. Daniel Usner dismantles ideological characterizations of Indian livelihood to reveal the intricacy of economic adaptations in American Indian history.

Officials, reformers, anthropologists, and artists produced images that exacerbated Indians’ economic uncertainty and vulnerability. From Jeffersonian agrarianism to Jazz Age primitivism, European American ideologies not only obscured Indian struggles for survival but also operated as obstacles to their success. Diversification and itinerancy became economic strategies for many Indians, but were generally maligned in the early United States. Indians repeatedly found themselves working in spaces that reinforced misrepresentation and exploitation. Taking advantage of narrow economic opportunities often meant risking cultural integrity and personal dignity: while sales of baskets made by Louisiana Indian women contributed to their identity and community, it encouraged white perceptions of passivity and dependence. When non-Indian consumption of Indian culture emerged in the early twentieth century, even this friendlier market posed challenges to Indian labor and enterprise. The consequences of this dilemma persist today.

Usner reveals that Indian engagement with commerce has consistently defied the narrow choices that observers insisted upon seeing.

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Industrial Eden
A Chinese Capitalist Vision
Brett Sheehan
Harvard University Press, 2015

This illuminating study of the evolution of Chinese capitalism chronicles the fortunes of the Song family of North China under five successive authoritarian governments. Headed initially by Song Chuandian, who became rich by exporting hairnets to Europe and America in the early twentieth century, the family built a thriving business against long odds of rural poverty and political chaos.

A savvy political operator, Song Chuandian prospered and kept local warlords at bay, but his career ended badly when he fell afoul of the new Nationalist government. His son Song Feiqing—inspired by the reformist currents of the May Fourth Movement—developed a utopian capitalist vision that industry would redeem China from foreign imperialism and cultural backwardness. He founded the Dongya Corporation in 1932 to manufacture wool knitting yarn and for two decades steered the company through a constantly changing political landscape—the Nationalists, then Japanese occupiers, then the Nationalists again, and finally Chinese Communists. Increasingly hostile governments, combined with inflation, foreign competition, and a restless labor force, thwarted his ambition to create an “Industrial Eden.”

Brett Sheehan shows how the Song family engaged in eclectic business practices that bore the imprint of both foreign and traditional Chinese influences. Businesspeople came to expect much from increasingly intrusive states, but the position of private capitalists remained tenuous no matter which government was in control. Although private business in China was closely linked to the state, it was neither a handmaiden to authoritarianism nor a natural ally of democracy.

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The Industrialization of São Paulo, 1800-1945
By Warren Dean
University of Texas Press, 1969

São Paulo is one of the few places in the underdeveloped world where an advanced industrial system has grown out of a tropical raw-material-exporting economy. By 1960 there were 830,000 industrial workers in the state, producing $3.3 billion worth of goods. It had become Latin America’s largest industrial center.

This is a study of the early years of manufacturing in São Paulo: how it was influenced by the growth and decline of the coffee trade; where it found its markets, its credit, and its labor force; and how it confronted the competition of imports. The principal focus, however, is on the manufacturers themselves, whose perceptions of their opportunities determined how industrialization was brought about. Warren Dean discusses their social origins, their connections with other sectors of the elite, their attitudes toward workers and consumers, and their view of the potentialities of economic development. He analyzes the political activities of the manufacturers, to discover both how they promoted their interests and how they confronted the larger challenge of social and political transformation.

Paradoxically, the industrialization of São Paulo is not a “success story” of private entrepreneurship. Until after World War II manufacturing grew quite slowly, and its hallmarks were always low productivity, technical backwardness, and consumer hostility. More than half of the state’s present large-scale factory production and nearly all of its heavy industry was built by foreign capital or state enterprise, not by privately owned firms. Dean shows that this outcome is partly a consequence of the historical experience of domestic manufacture.

Throughout the book the author points out the “peculiar articulations” of the industrial system of São Paulo—the significant social and political interests that determined what kinds of development were possible. The result is an exposition of an unusual case study in twentieth-century economic development.

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Industry, the State, and Public Policy in Mexico
By Dale Story
University of Texas Press, 1986

The industrialization process in Mexico began before that of any other nation in Latin America except Argentina, with the most rapid expansion of new industrial firms occurring in the 1930s and 1940s, and import substitution in capital goods evident as early as the late 1930s. Though Mexico’s trade relations have always been dependent on the United States, successive Mexican presidents in the postwar period attempted to control the penetration of foreign capital into Mexican markets.

In Industry, the State, and Public Policy in Mexico, Dale Story, recognizing the significance of the Mexican industrial sector, analyzes the political and economic role of industrial entrepreneurs in postwar Mexico. He uses two original data sets—industrial production data for 1929–1983 and a survey of the political attitudes of leaders of the two most important industrial organizations in Mexico—to address two major theoretical arguments relating to Latin American development: the meaning of late and dependent development and the nature of the authoritarian state. Story accepts the general relevance of these themes to Mexico but asserts that the country is an important variant of both.

With regard to the authoritarian thesis, the Mexican authoritarian state has demonstrated some crucial distinctions, especially between popular and elite sectors. The incorporation of the popular sector groups has closely fit the characteristics of authoritarianism, but the elite sectors have operated fairly independently of state controls, and the government has employed incentives or inducements to try to win their cooperation.

In short, industrialists have performed important functions, not only in accumulating capital and organizing economic enterprises but also by bringing together the forces of social change. Industrial entrepreneurs have emerged as a major force influencing the politics of growth, and the public policy arena has become a primary focus of attention for industrialists since the end of World War II.

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An Inquiry into the Nature and Causes of the Wealth of Nations
Adam Smith
University of Chicago Press, 1977
Adam Smith's The Wealth of Nations was recognized as a landmark of human thought upon its publication in 1776. As the first scientific argument for the principles of political economy, it is the point of departure for all subsequent economic thought. Smith's theories of capital accumulation, growth, and secular change, among others, continue to be influential in modern economics.

This reprint of Edwin Cannan's definitive 1904 edition of The Wealth of Nations includes Cannan's famous introduction, notes, and a full index, as well as a new preface written especially for this edition by the distinguished economist George J. Stigler. Mr. Stigler's preface will be of value for anyone wishing to see the contemporary relevance of Adam Smith's thought.
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The Institutional Revolution
Measurement and the Economic Emergence of the Modern World
Douglas W. Allen
University of Chicago Press, 2011

Few events in the history of humanity rival the Industrial Revolution. Following its onset in eighteenth-century Britain, sweeping changes in agriculture, manufacturing, transportation, and technology began to gain unstoppable momentum throughout Europe, North America, and eventually much of the world—with profound effects on socioeconomic and cultural conditions.

In The Institutional Revolution, Douglas W. Allen offers a thought-provoking account of another, quieter revolution that took place at the end of the eighteenth century and allowed for the full exploitation of the many new technological innovations. Fundamental to this shift were dramatic changes in institutions, or the rules that govern society, which reflected significant improvements in the ability to measure performance—whether of government officials, laborers, or naval officers—thereby reducing the role of nature and the hazards of variance in daily affairs. Along the way, Allen provides readers with a fascinating explanation of the critical roles played by seemingly bizarre institutions, from dueling to the purchase of one’s rank in the British Army.
 
Engagingly written, The Institutional Revolution traces the dramatic shift from premodern institutions based on patronage, purchase, and personal ties toward modern institutions based on standardization, merit, and wage labor—a shift which was crucial to the explosive economic growth of the Industrial Revolution.
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Institutions and Social Order
Karol Soltan, Virginia Haufler, and Eric M. Uslaner, Editors
University of Michigan Press, 1998
"Institutionalism" is the buzzword of the 1980s and 1990s in the social sciences. What is new in the contemporary analysis of institutions and what does it offer to the study of social order? In this book a distinguished group of social scientists drawn from political science, economics, and sociology, explore this question and show us how different theoretical approaches to institutional analysis can be joined to build a more thorough understanding of institutions.
The modern analysis of institutions has taken two separate paths. Rational choice theories identified institutions as a strategic response to collective action problems and as instruments for the promotion of cooperation. Contrary to these theories, such cooperation is fundamental to social order and a prerequisite for economic growth and development. An alternate form of institutionalism, drawn from sociological and historical analysis, de-emphasized the role of choice, strategy, and design in the construction of many of the major institutions in social life. This form of institutional analysis pointed to the role of prior choices, common norms, and culture in making certain options and choices unthinkable or impossible. Institutions, according to this view, may represent a certain kind of social order, but they do not always promote cooperation and economic growth. The more recent theories in the "new institutionalism" bring these seemingly irreconcilable perspectives closer together. New institutionalists argue that institutions must be grounded in the social fabric, and thus rational choice must be combined with historical and cultural variables. The papers collected in this volume address the merging of rational choice and historical-sociological institutionalism in the "new institutionalism."
The contributors are Randall L. Calvert, Christopher Clague, Kathleen Cook, Peter Hall, Virginia Haufler, James Johnson, Gary Miller, Karol Soltan, Rosemary C. R. Taylor, Eric M. Uslaner, and Barry Weingast.
Karol Soltan is Associate Professor of Political Science, University of Maryland. Eric M. Uslaner is Professor of Political Science, University of Maryland. Virginia Haufler is Assistant Professor of Political Science, University of Maryland.
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Inventing the Electronic Century
The Epic Story of the Consumer Electronics and Computer Industries, With a New Preface
Alfred D. Chandler Jr.
Harvard University Press, 2005
Consumer electronics and computers redefined life and work in the twentieth century. In Inventing the Electronic Century, Pulitzer Prize–winning business historian Alfred D. Chandler, Jr., traces their origins and worldwide development. From electronics prime mover RCA in the 1920s to Sony and Matsushita’s dramatic rise in the 1970s; from IBM’s dominance in computer technology in the 1950s to Microsoft’s stunning example of the creation of competitive advantage, this masterful analysis is essential reading for every manager and student of technology.
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The Invention of the Economy
David S. Grewal
Harvard University Press

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Invested
How Three Centuries of Stock Market Advice Reshaped Our Money, Markets, and Minds
Paul Crosthwaite, Peter Knight, Nicky Marsh, Helen Paul, and James Taylor
University of Chicago Press, 2022
Invested examines the perennial and nefarious appeal of financial advice manuals.
 
Who hasn’t wished for a surefire formula for riches and a ticket to the good life? For three centuries, investment advisers of all kinds, legit and otherwise, have guaranteed that they alone can illuminate the golden pathway to prosperity—despite strong evidence to the contrary. In fact, too often, they are singing a siren song of devastation. And yet we keep listening.
 
Invested tells the story of how the genre of investment advice developed and grew in the United Kingdom and the United States, from its origins in the eighteenth century through today, as it saturates our world. The authors analyze centuries of books, TV shows, blogs, and more, all promising techniques for amateur investors to master the ways of the market: from Thomas Mortimer’s pathbreaking 1761 work, Every Man His Own Broker, through the Gilded Age explosion of sensationalist investment manuals, the early twentieth-century emergence of a vernacular financial science, and the more recent convergence of self-help and personal finance. Invested asks why, in the absence of evidence that such advice reliably works, guides to the stock market have remained perennially popular. The authors argue that the appeal of popular investment advice lies in its promise to level the playing field, giving outsiders the privileged information of insiders. As Invested persuasively shows, the fantasies sold by these writings are damaging and deceptive, peddling unrealistic visions of easy profits and the certainty of success, while trying to hide the fact that there is no formula for avoiding life’s economic uncertainties and calamities.
 
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Investing Japan
Foreign Capital, Monetary Standards, and Economic Development, 1859–2011
Simon James Bytheway
Harvard University Press, 2014

Investing Japan demonstrates that foreign investment is a vital and misunderstood aspect of Japan’s modern economic development. The drive to become a modern industrial power from the 1860s to the 1930s necessitated the adoption and internalization of foreign knowledge. This goal could only be achieved by working within the overarching financial and technological frameworks of Western capitalism. Foreign borrowing, supported by the gold standard, was the crux of Japan’s pre-war capital formation. It simultaneously financed domestic industrial development, the conduct of war, and territorial expansion on the Asian continent. Foreign borrowing also financed the establishment of infrastructure in Japan’s largest cities, the nationalization of railways, the interlinked capital-raising programs of “special banks” and parastatal companies, and the rapid electrification of Japanese industry in the 1920s.

Simon James Bytheway investigates the role played by foreign companies in the Japanese experience of modernization while highlighting their identity as key agents in the processes of industrialization and technology transfer. Investing Japan delivers a complex, multifaceted analysis, intersecting with the histories of formal and informal economic imperialism, diplomacy, war financing, domestic and international financial markets, parastatal and multinational enterprise, and Japan’s “internationalization” vis-à-vis the emerging global market.

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Ireland's Economic History
Crisis and Development in the North and South
Gerard McCann
Pluto Press, 2011

With clarity and depth, Gerard McCann explores the complex developments that have shaped Ireland’s economic development, north and south, and led to recurring crises and instability.

The Irish economy has been traditionally portrayed as a product of its political divisions and the colonial legacy, divided and analysed in terms of the hegemonic tensions that exist on the island. Influenced by these divisions, academics have tended to look at a two-region approach to economic development, without adequately acknowledging the interactive nature of the island economy as a source of the crises or as a solution to systemic divergence.

McCann's definitive and dynamic history of the Irish economy circumvents conventional analyses and investigates the economic development of the island economy as a whole, highlighting where aggressive differentiation has been divisive and destabilising. He concludes by considering an alternative integrated and cohesive process of economic development.

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