Naomi Lamoreaux Cultural
Change and Business History
Abstract
This paper draws on
the literature of experimental economics to suggest a model of cultural change
with applications to business history. The model is based on experiments
involving the public goods game, in which players are given an initial
endowment of money and told that they can keep it or contribute some or all of
it to a common fund. The fund earns interest, and, at the conclusion of the
game, the total is divided among all the players, regardless of the magnitude
of their contributions. In most settings, players initially contribute a
significant fraction of their endowment to the fund, but some choose to free
ride on others’ investments. If the game is repeated for multiple periods,
players observe this free riding and stop putting their money in the fund. If
the rules are changed, however, so that free riders can be punished, players
will start contributing again and the common fund will grow and provide general
benefits. Although this game is typically used to study topics such as tax
avoidance and the provision of schools, roads, hospitals, and other similar
investments, I argue that cultural practices have many of the features of
public goods and that insights from these experiments can be used to explore
systematically the dynamics of cultural change.
The
Entrepreneurial Culture and the Mysteries of Economic Development by Louis Galambos
Abstract
Culture is easy to
study but difficult to specify. This essay attempts to pin down this illusive
subject by linking it to entrepreneurship—that is to specific efforts to
combine land, labor, capital, and knowledge in the creation of economic
activity that has some aspect of novelty. Entrepreneurship is important because
of its central role in capitalism. Culture is important because it influences
the willingness of individuals to take the risk of exploring possibilities for
entrepreneurial ventures even though the most of them will be unsuccessful in
the long-run. In search of entrepreneurial culture in America around 1800, this
paper examimes immigration, agriculture, commerce, and the beginnings of the
Industrial Revolution in the US. These insights are then employed in an
examination of the post-WWII efforts of the World Bank—most of which failed—to
promote economic growth in nations that had not yet experienced
“modernization.”
And here is the flyer for a new journal on Capitalism and History, coming out in 2019. I would love to see a meeting of this advisory board. Although I have been very critical of several people on the list, this looks like it could be a serious attempt to bring together historians and economists working on economic history.
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