Institutional Theory and History of the US Economy

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• Institutional Theory and History of the US
  Economy
• Syllabus
• Instructor Information
• James I. Sturgeon
• Office WiWi 2.14
• E-mail sturgeonj_at_umkc.edu
• Introduction
• This course will consist of an examination of
  the history, theory and policy of the
  Institutions of American economy.
• The evolution of technology and its role in
  shaping these institutions is a principal focus.
  The theoretical perspective
• is that of institutional economic theory of the
  last 100 years.
• Students are to read the following
• Reading List
• C. E. Ayres, The Theory of Economic Progress, ch
  6 - 9
• Michael Best, The New Competition, ch 1 -3
• Paul David, Clio and the Economics of QWERTY,
  AER, May 1985.
• Thorstein Veblen, The Theory of Business
  Enterprise Ch 1- 3 7
• Robert Montgomery, "Historical Fact" Unpublished
  Paper

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Figure 1 The Dichotomy of Culture and Institutions
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Principle Theoretical Framework Analytical
Dichotomy of Cultural Behavior and Structure
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• Principle Hypothesis
• Continuity of Technology
• Discontinuity of Tradition and Ceremony

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The
Evolution of Production Its Organization Plant
Economy
Ownership/Control Purpose/End
Scope Handicraft (hand tools)
Money Proprietor/Partner
Production for use Regional
Factory (machines) Money gt
Credit P/P Manager gt joint stock
Production for sale Regional/National Industr
ial (Machine Process) Credit
Stockholder/Managerial Capital gains
National/Int l
Absentee Owner
Technological (Elect.
Mach Pro Credit Stock -- Absentee
Owner Asset Value
Anational Securities
Managerial Elite
Manipulation
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Economic History

• Neolithic Period -- (12-13K years ago)
• Settled Life -- Civilization -- Mesopotamia
• First Agricultural Revolution
• Wheat and Water
• Accumulation
• Tools

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Wheat
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Water

• The Fertile Crescent
• Mesopotamia
• Iraq
• Turkey
• Syria
• The Tigris Euphrates Rivers

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Economic History

• Medieval Era (500 1400 AD)
• Feudalism -- Western Europe
• Second Agricultural Revolution (900 - 1500 AD)
• Stirrup
• Horse Collar

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Modern Horse Collar
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Economic History

• Medieval Era (500 1400 AD)
• Feudalism -- Western Europe
• Second Agricultural Revolution (900 - 1500 AD)
• Stirrup
• Horse Collar
• Horse Power
• Vertical Plow

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Economic History

• Medieval Era (500 1400 AD)
• Feudalism -- Western Europe
• Second Agricultural Revolution (900 - 1500 AD)
• Stirrup
• Horse Collar
• Horse Power
• Vertical Plow
• 3 Field Crop Rotation

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Two Field Crop Rotation
Wheat - Year 1 Fallow - Year 2 Fallow - Year 1 Wheat - Year 2
Field one 300 acres Field two 300 acres
Three Field Crop Rotation
Wheat - year 1 Legume- year 2 Fallow year 3 Legume-year 1 Fallow - year 2 Wheat - year 3 Fallow - year 1 Wheat - year 2 Legume - year 3
Field one 200 acres Field two 200 acres Field Three 200 acres
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• Two field rotation
• Plowing 300 (300 x 2) 900 Acres
• Crop 300 Acres
• Ratio 300/900 .33
• Three field rotation
• Plowing 200 200 (200 x 2) 800 Acres
• Crop 400 Acres
• Ratio 400/800 .50
• How much new land can be brought into production
• with same amount of work?
• 100 acres
• 50 acres
• 75 acres

25 wheat 25 legume 25 Fallow 25 Fallow
100 but 75 new land in production
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Economic History

• Scientific Revolution (1500 - 1700 AD)
• Astronomy, Physics and Mathematics
• Industrial Revolution (circa 1750 AD)
• Steam Engine

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Economic History

• Scientific Revolution (1500 - 1700 AD)
• Astronomy, Physics and Mathematics
• Industrial Revolution (circa 1750 AD)
• Steam Engine
• Lunar Society of Birmingham
• Third Agricultural Revolution (1794 Present)
• Iron Plow
• Mechanical Reaper

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Wheat Threshing Contest
Paris Exhibition 1854

• Six men with flails -- 60 liters of wheat
• Belgian thresher -- 150
• French thresher -- 250
• English thresher -- 410
• US thresher -- 740

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