Bowling for Fascism: Social Capital and the Rise of the Nazi Party

SHANKER SATYANATH

JOURNAL OF POLITICAL ECONOMY

Abstract: Using newly collected data on association density in 229 towns and cities in interwar Germany, we show that denser social networks were associated with faster entry into the Nazi Party. The effect is large: one standard deviation higher association density is associated with at least 15 percent faster Nazi Party entry. Party membership, in turn, predicts electoral success. Social networks thus aided the rise of the Nazis that destroyed Germany’s first democracy. The effects of social capital depended on the political context: in federal states with more stable governments, higher association density was not correlated with faster Nazi Party entry.

1688 and all that: property rights, the Glorious Revolution and the rise of British capitalism

GEOFFREY M. HODGSON

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 1

Abstract: In a seminal 1989 article, Douglass North and Barry Weingast argued that by making the monarch more answerable to Parliament, the Glorious Revolution of 1688 helped to secure property rights in England and stimulate the rise of capitalism. Similarly, Daron Acemoglu, Simon Johnson, and James Robinson later wrote that in the English Middle Ages there was a ‘lack of property rights for landowners, merchants and proto-industrialists’ and the ‘strengthening’ of property rights in the late 17th century ‘spurred a process of financial and commercial expansion’. There are several problems with these arguments. Property rights in England were relatively secure from the 13th century. A major developmental problem was not the security of rights but their feudal nature, including widespread ‘entails’ and ‘strict settlements’. 1688 had no obvious direct effect on property rights. Given these criticisms, what changes promoted the rise of capitalism? A more plausible answer is found by addressing the post-1688 Financial and Administrative Revolutions, which were pressured by the enhanced needs of war and Britain’s expanding global role. Guided by a more powerful Parliament, this new financial system stimulated reforms to landed property rights, the growth of collateralizable property and saleable debt, and thus enabled the Industrial Revolution.

Cognitive rules, institutions, and economic growth: Douglass North and beyond

AVNER GREIF &  JOEL MOKYR

JOURNAL OF INSTITUTIONAL ECONOMICS, Volume 13, Issue 1

Abstract:  Douglass North’s writing on institutional change recognized from the very start that such change depends on cognition and beliefs. Yet, although he focused on individual beliefs, we argue in this paper that such beliefs are social constructs. We suggest that institutions – rules, expectations, and norms – are based on shared cognitive rules. Cognitive rules are social constructs that convey information that distills and summarizes society’s beliefs and experience. These rules have to be self-enforcing and self-confirming, but they do not have to be ‘correct’. We describe the characteristics of such rules in the context of a market for ideas, and illustrate their importance in two developments central to the growth of modern economies: the rise of the modern state with its legitimacy based on consent, and the rise of modern science-based technology that was the product of the scientific revolution and the Enlightenment.

Micro foundations in the Great Divergence debate: opening up a new perspective

LUCA ZAN

HISTORY AND PHILOSOPHY OF ECONOMICS

Abstract: Prevailing approaches in historical studies adopt a macro view and place an overwhelming emphasis on the Industrial Revolution as a major discontinuity in Western development. On the contrary, recent research in accounting, management and business history has suggested a different direction. When opting for a micro-level focus, crucial discontinuities in management and accounting in the West can be traced back to the Renaissance Period. The paper thus searches for ‘micro foundations’ in managing and accounting practices to address the on-going debate on the East-West divergence. Despite the obvious problems with source availability, we outline a new research agenda for the debate.

The Economics of Property Rights in Early and Medieval Christianity

BENEDIKT KOEHLER

ECONOMIC AFFAIRS

Abstract: Early and medieval Christianity pioneered an economics of property rights that had no precedent in antiquity. The early Church Fathers Tertullian, Ambrose, and John Chrysostomos successively evolved conceptions of the right to own property as a prerequisite for poor relief, and the basis of the right to own property was later formulated by Pope John XXII to settle a dispute on this issue instigated by Francis of Assisi. This article challenges assessments advanced by Joseph Schumpeter, Jacob Viner, and Frank Knight, who argued that the doctrines of Christianity were devoid of economics, and draws attention to the work of Georg Ratzinger (1844–1899), who first expounded how in early Christianity property rights and poor relief were linked.

Suffrage, labour markets and coalitions in colonial Virginia

ELENA NIKOLOVA & MILENA NIKOLOVA

EUROPEAN JOURNAL OF POLITICAL ECONOMY

Abstract: We study Virginia’s suffrage from the early-17th century until the American Revolution using an analytical narrative and econometric analysis of unique data on franchise restrictions. First, we hold that suffrage changes reflected labour market dynamics. Indeed, Virginia’s liberal institutions initially served to attract indentured servants from England who were needed in the labour-intensive tobacco farming but deteriorated once worker demand subsided and planters replaced white workers with slaves. Second, we argue that Virginia’s suffrage was also the result of political bargaining influenced by shifting societal coalitions. We show that new politically influential coalitions of freemen and then of small and large slave-holding farmers emerged in the second half of the 17th and early-18th centuries, respectively. These coalitions were instrumental in reversing the earlier democratic institution\s. Our main contribution stems from integrating the labour markets and bargaining/coalitions arguments, thus proving a novel theoretical and empirical explanation for institutional change.

A model of the beginnings of coinage in antiquity

JACQUES MELITZ

EUROPEAN REVIEW OF ECONOMIC HISTORY, Volume 21, Issue 1

Abstract: There have been important advances by archeologists and numismatists in recent decades in the study of the beginnings of coinage in Ionia, Lydia, and Greece before the fifth century B.C. This paper provides a model of the birth of coinage that brings these advances into a broad analysis of the subject-matter. It pulls together many factors that are often treated separately. In addition, the model yields one important new result. Contrary to popular assumption, early coinage was not highly profitable. The Lydian government and the Greek city-states provided an extremely wide array of denominations of coins in a single precious metal at considerable cost. Their willingness to bear this cost must have reflected a political strategy of promoting coinage. Such a political strategy would also be easy to explain. As a large payer and recipient of money in the form of precious metals, the government had much to gain from the spread of coinage in order to economize on transaction costs in its own affairs.