Bringing the Social Back into Economics : Progress or Reductionism ?

ions unless they enter into the motivational concreteness of one or more individuals. 16 In his latest contribution, North (1999) displays a remarkable panache for having his cake and eating it. He deploys optimising agents within given constraints but they are bound to evolving ideological beliefs. He privileges the latter causally but also allows for circular interaction. And whilst most change is incremental, it can also be rapid. 17 See also Lamoreaux et al (1997) and Lamoreaux (1998). 18 Note that Gibbons (1997, p. 127) observes in his survey: Game theory is rampant in economics ... game-theoretic models allow economists to study the implications of rationality, self-interest and equilibrium, both in market interactions ... and in nonmarket interactions. 19 That this is so is recognised in terms of denial, Lamoreaux et al (1997, p. 77): We do not see business historians as research assistants for economists who engage in a higher level of thinking. But this is only in order to encourage historians themselves to engage in or apply such higher level thinking in comparative work. 20 However, for Crafts, whilst he "can be construed in terms of modern microeconomics ... (this) does not mean that his underlying view of the role of the state in the development process is acceptable", because of his neglect of sources of total factor productivity and the dangers of government as opposed to market failure. 21 For a major platform in the launch of the post-Washington consensus, see Stiglitz (1998), contributing as Chief Economist and Senior Vice-President at the World Bank. For critical reception, see Fine (1999j) and Standing (1999) for example. 22 This approach is beautifully complemented in-house by North (1999, p. 23/4): There is no such thing as laissez-faire ... Any market that is going to work well is structured ... by deliberate efforts to make the players compete by price and quality rather than compete by killing each other ... What you try to get government to do ... is to structure the game so you force the players to compete by price and quality rather than compete in other ways. It means you must structure factor and product markets differently; it means you must structure a labour market, a capital market. I feel very conscious of this because for the last half-dozen years I have been an adviser to the World Bank on a set of policies in which we have attempted to look at how to structure various kinds of markets to work well. And it has been an education. With telecommunications ... the structure at one moment of time which might work well, is not going to be the same as at another moment of time, because technology has changed the industry from being a natural to being a competitive industry. And therefore radically different policies may be involved, with respect to the way in which you want the game structured to get the results that you want. 23 See Fine (1999a, b and e-g). This summary draws upon Fine (1999h). 24 Social capital signifies a sort of commodity fetishism raised to the level of capital.