People From Boston

"International specialization and division of labor requires institutions and organizations to safeguard property rights across international boundaries so that capital markets as well as other kinds of exchange can take place with credible commitment on the part of the players."

"Specialization in this world is rudimentary and self-sufficiency characterizes most individual households"

"Institutions are the humanly devised constraints that structure political, economic, and social interactions. They consist of both informal constraints (sanctions, taboos, customs, tradition, and code of conduct) and formal rules (constitutions, laws, property rights)."

"Effective institutions raise the benefits of cooperative solutions or the costs of defection, to use game theoretic terms."

"We are far from understanding how to achieve adaptively efficient economies because allocative efficiency and adaptive efficiency may not always be consistent. Allocatively efficient rules would make today's firms and decisions secure - but frequently at the expense of the creative destruction process that Schumpeter had in mind."

"Order in the societies they describe is the result of a dense social network where people have an intimate understanding of each other and the threat of violence is a continuous force for preserving order because of its implications for other members of society."

"The first economic revolution was not a revolution because it shifted man's major economic activity from hunting and gathering to settled agriculture. It was a revolution because the transition created an incentive change for mankind of fundamental proportions. The incentive change stems from the different property rights under the two systems. When common property rights over resources exist, there is little incentive for the acquisition of superior technology and learning. In contrast, exclusive property rights which reward the owners provide a direct incentive to improve efficiency and productivity, or, in more fundamental terms, to acquire more knowledge and new techniques. It is this change in incentive that explains the rapid progress made by mankind in the last 10,000 years in contrast to his slow development during the long era as a primitive hunter/gatherer."

"Karl Marx and Adam Smith both subscribed to this view. They both saw successful growth as dependent on the development of efficient property rights. Their followers appear in the main to have forgotten this."

"Robert Fogel and Douglass North have been awarded this year's Prize in Economics for having renewed research in economic history by applying economic theory and quantitative methods in order to explain economic and institutional change."

"By that time a structure of property rights had developed in the Netherlands and England which provided the incentives necessary for sustained growth. These included the inducements required to encourage innovation and the consequent industrialization. The industrial revolution was not the source of modern economic growth. It was the outcome of raising the private rate of return on developing new techniques and applying them to the production process."

"Economic growth occurs if output grows faster than population. Given the described assumptions about the way people behave, economic growth will occur if property rights make it worthwhile to undertake socially productive activity. The creating, specifying and enacting of such property rights are costly... As the potential grows for private gains to exceed transaction costs, efforts will be made to establish such property rights. Governments take over the protection and enforcement of property rights because they can do it at a lower cost than private volunteer groups. However, the fiscal needs of government may induce the protection of certain property rights which hinder rather than promote growth; therefore we have no guarantee that productive institutional arrangements will emerge."

"Economists with a historical bent have only just begun to study institutional change and its impact on industrial organization. Douglass C. North has been the innovator here. In his work with he outlined a most useful theory of institutional change and applied it to American economic growth. In his study with Robert Paul Thomas he demonstrated how the changing industrial organization affected the rise of the west. The works of North and his colleagues use this sweeping panorama of history to test, buttress, and refine their theory. They have not yet focused on a detailed analysis of the historical development of any specific economic institution."

"The factors we have listed (innovation, economies of scale, education, capital accumulation, etc.) are not causes of growth; they are growth."

"Its objectives to suggest new paths for the study of European economic history rather than fit either of these standard formats. It is more than anything an agenda for new research."

"In some respects this is intended to be a revolutionary book, but in other respects it is very traditional indeed. It is revolutionary in that we have developed a comprehensive analytical framework to examine and explain the rise of the Western world; a framework consistent with and complementary to standard neoclassical economic theory."

"Where such a separation is complete one group of individuals, the security holders and in particular the stockholders, performs the function of risk-takers and suppliers of capital, while a separate group exercises control and ultimate management. In such a case, if profits are to be received only by the security holders, as the traditional logic of property would require, how can they perform both of their traditional economic roles? Are no profits to go to those who exercise control and in whose hands the efficient operation of enterprise ultimately rests? ...Furthermore, if all profits are earmarked for the security holder, where is the inducement for those in control to manage the enterprise efficiently? When none of the profits are to be received by them, why should they exert themselves beyond the amount necessary to maintain a reasonably satisfied group of stockholders."

"We live in a system described in obsolete terms. We have come to believe our own repeated declarations that our society is based on individual initiative – whereas, in fact, most of it is no more individual than an infantry division. We assume that our economic system is based on “private property.” Yet most industrial property is is no more private than a seat in a subway train, and indeed it is questionable whether much of it can be called “property” at all. We indignantly deny that we are collectivist, yet it is demonstrable that more than two-thirds of our enterprise is possible only because it is collectivist: what is really meant is that the State did not do the collectivizing."

"Essentially these stockholders, though still politely called "owners", are passive. They have the right to receive only. The condition of their being is that they do not interfere in management."

"Berle and Means’ book remains the point of departure and the central reference for reflection about corporate governance. It has given rise to differing, even contradictory interpretations, which explains how it could be used in support of opposing theories, notably on the question of the relationship between shareholders and managers. Thus, it has been used to argue in favor of the shareholder conception that is now dominant, even though it contains, as we shall see, a conception of the corporation that is radically different to the contractualist view that underpins the current doctrine of shareholder primacy."

"As Adolf Berle, a fellow cold warrior, once remarked, 'Being vindicated by history is cold comfort.' For one thing, the political scars of those with whom one has polemicized seem more long-lasting and painful than their memories of the political issues that gave rise to them. And yet indifference to the political life of one's times I deem a flagrant expression of moral irresponsibility. Those who profess such indifference owe the intellectual and cultural freedoms in which they luxuriate to the commitment and sacrifices of others."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"Now appears the fourth stage. In this situation emerge the newer mechanisms, the fiduciary institutions, by which these dispersed stockholdings are at once more becoming concentrated."

"No large concentrated stockholding exists which maintains close relationship with the management or is capable of challenging it, so that the board of directors may regularly expect a majority... to follow their lead. Thus they need not consult with anyone when making up their slate of directors... They select their own successors."

"[The corporation is an invaluable auxiliary to the conduct of foreign affairs by the Government, and] has become an international as well as a national instrument. It is a mighty institution which thus far has not become, and has manifested no great desire to become, an independent political force. In international life it is an experiment in non-national organization, pledged only to discharge certain economic functions."

"[Corporations must manifest in this area a conscience, or be required to] accept direction from the conscience of the government. This conscience must be built into institutions so that it can be invoked as a right by the individuals and interests subject to the corporate power... For twentieth-century capitalism will justify itself not only by its out-turn product, but by its content of life values."

"Major corporations in most instances do not seek capital. They form it themselves."

"[The communist state has thus far proved itself a] brutal, blunt, and fumbling instrument, [while elsewhere capitalism has been evolving its own"

"Why have stockholders?... What contribution do they make, entitling them to heirship of half the profits of the industrial system, receivable partly in the form of dividends, and partly in the form of increased market values resulting from undistributed corporate gains? Stockholders toil not, neither do they spin, to earn that reward. They are beneficiaries by position only. Justification for their inheritance must be sought outside classic economic reasoning.... [and] can be founded only upon social grounds... that justification turns on the distribution as well as the existence of wealth. Its force exists only in direct ratio to the number of individuals who hold such wealth. Justification for the stockholder's existence thus depends on increasing distribution within the American population. Ideally the stockholder's position will be impregnable only when every American family has its fragment of that position and of the wealth by which the opportunity to develop individuality becomes fully actualized."

"The Russian revolution was nominally based on Communist dogma; but its significant struggle was to find some instrument by which a vast backward country could be mauled into industrialization. The capitalist revolution in which the United States was the leader found apter, more efficient and more flexible means through collectivizing capital in corporations."

"The rise of the modern corporation has brought a concentration of economic power which can compete on equal terms with the modern state - economic power versus political power, each strong in its own field. The state seeks in some aspects to regulate the corporation, while the corporation, steadily becoming more powerful, makes every effort to avoid such regulation... The future may see the economic organism, now typified by the corporation, not only on an equal plane with the state, but possibly even superseding it as the dominant form of social organization. The law of corporations, accordingly, might well be considered as a potential constitutional law for the new economic state, while business practice is increasingly assuming the aspect of economic statesmanship."

"The property owner who invests in a modern corporation so far surrenders his wealth to those in control of the corporation that he has exchanged the position of independent owner for one in which he may become merely recipient of the wages of capital... [Such owners] have surrendered the right that the corporation should be operated in their sole interest..."

"In its new aspect the corporation is a means whereby the wealth of innumerable individuals has been concentrated into huge aggregates and whereby control over this wealth has been surrendered to a unified direction. The power attendant upon such concentration has brought forth princes of industry, whose position in the community is yet to be defined. The surrender of control over their wealth by investors has effectively broken the old property relationships and has raise the problem of defining these relationship anew. The direction of industry by persons other than those who have ventured their wealth has raised the question of the motive force back of such direction and the effective distribution of the returns from business enterprise."

"Language use is a curious behavior, but once the transition to language is made, literature is a likely consequence, since it is linked to the dynamic of the linguistic symbol through the functioning of the imagination."

"The failing of contemporary criticism is double: Hand in hand with the suppression of aesthetic autonomy, one finds also a growing reluctance to recognize the complex and dynamic temporality of literature. By dynamic temporality I mean that immanent sense of time within the literary work, its ability to reach backward, as part of a tradition, and forward, as a vehicle of innovation and anticipation. This sort of temporality is quite different from a single-minded and frequently reductionist focus on historical context."

"The more rigorously criticism historicizes a work of art, in the sense of lodging it in the context of the moment of its production, the less likely it becomes for criticism to be able to explain either its own subsequent interest in the work or the possibility of lay—that is, nonacademic—interest in reading it."

"Presentism implies not only a shift toward contemporary material (older material is denounced polemically as tied to dead authors), but an implicit structuring of time as always only a present, without a recollection of its past, without an aspiration to a future."

"The simultaneity of the disappearance of literature (as aesthetic) and history (as development), which we can observe around us in the academy, points to a fundamental commonality; unraveling one implies unraveling the other, since both are grounded in the same goal-oriented structures that postmodern sensibility opposes. Both civilizational history and autonomous literature are constitutively teleological, dependent on notions of progress toward goals, and they both therefore face resistance from the antidevelopmentalism of contemporary intellectual life."

"The modern reading of ancient literature involves a mode of reception that is not merely scholarly or antiquarian. Instead, aesthetic experience allows for a direct relationship between reader and work, despite the historical distance. Today’s consumer cannot participate in the ancient economy by trying to use an Athenian coin as legal tender; but today’s reader can participate in the ancient literary imagination though an authentic engagement with the Homeric text (no matter how much contemporary circumstances necessarily also enter into that encounter with the ancient text). Thus the historicist imperative of periodization evidently stands at odds with the potential for immediacy associated with literary reception and aesthetic experience."

"The point is not that contemporaneity is insignificant. ... It is rather that there is something more important at stake in the temporal character of literature: its relation to history, understood as change and development, rather than as context and frame."

"Benjamin describes the revolutionary moment when the past suddenly bursts into the present, as if rising from the grave to rectify the wrongs it suffered at the hands of a banally triumphant progress. Thus Benjamin’s historical materialism implies a capacity to link otherwise separate and distant moments in time through a profound empathy. The empathy takes on a revolutionary character by disrupting the regularity of quotidian temporality. Without this sort of tie to the past, no critical stance in the present is possible."

"Periodization sequesters human experience. The historicist separation of the past from the present prohibits empathy with the past and therefore precludes criticism in the present."

"The relevance of canonicity has nothing to do with the notion of codified establishments of hierarchical judgment (for which it typically attracts revisionist hostility). Instead, canonicity is important as the capacity to permit vibrant reading relationships to works from the past. ... Whatever else the canon may do, its primary function has been the preservation of the reception of literature across periodic borders, thereby calling into question the significance of those borders or the fetishism of contexts. The canon tunnels under the Berlin Wall that periodizers erect between literary regimes. As a fundamental level, therefore, periodization stands at odds with canonicity. Canonicity maintains, cultivates, and develops community over time and across generations; periodization breaks up that identity and suppresses the historical continuities through a strategy of temporal separation."

"The assertion of the priority of contemporaneity, the celebration of the present, defines the politics of periodization. It is either a matter of our present, defined as the vanguard of historical progress, or it is the historical present of the objects of study, presumed to be fully grounded in that single, isolated moment of time. In either case, the classificatory impulse inherent in periodization tends to proscribe the more complex temporalities of tradition and anticipation."

"Periodization is the disciplinary strategy with which the present establishes its rule over all time and encourages conformism, to the detriment of autonomy, individual and aesthetic."

"The reified focus on the moment of literary production, in a distanced context—the typical topic of periodization—suppresses the experience of reception, the actualization of the past in the reader’s present."

"Historicism runs counter to the specific capacity of the literary work to escape the limits of historical time, to allow for the cross-generational flourishing of tradition, and open the present to a multidimensional temporality."

"The social sciences, ultimately, are about patterns, rules, and phenomena available to certain objective forms of explanation; the humanities, especially the study of literature, are about exceptional cases, singular works, and individuals that require subjective understanding."

"Flaubert poses as the outsider with insider information who excoriates a reality as degraded and mendacious. It is as if the literary standing of the author in the world of imagination and fiction paradoxically grants him a greater access to the truth than would be available in the falseness of empirical existence."

"Literature is most social when it is least social."

"The very natural tendency to use terms derived from traditional grammar like verb, noun, adjective, passive voice, in describing languages outside of Indo-European is fraught with grave possibilities of misunderstanding."