Douglass Cecil North (born November 5, 1920) is an American economist known for his work in economic history. He is the co-recipient with Robert William Fogel of the 1993 Nobel Memorial Prize in Economic Sciences.
- Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market. (footnote 4: The original contributions were those of Hayek (1937 and 1945)).
- Douglass North, in "Structure and Change in Economic History" (1981), p. 36
- Regarding social order, Fukuyama writes, "The systematic study of how order, and thus social capital, can emerge in spontaneous and decentralized fashion is one of the most important intellectual developments of the late twentieth century." He correctly attributes the modern origins of this argument to F.A. Hayek, whose pioneering contributions to cognitive science, the study of cultural evolution, and the dynamics of social change put him in the forefront of the most creative scholars of the 20th century. But Hayek's views about the "spontaneity" of social order remain controversial. In their extreme form, they imply that all deliberate efforts to manipulate social order — social engineering — are doomed to failure because the complex nature of our cultural heritage makes a complete understanding of the human condition impossible.
Hayek was certainly correct that we have, at best, a very imperfect understanding of the human landscape, but "spontaneous" it is not. What distinguishes human evolution from the Darwinian model is the intentionality of the players. The mechanism of variation in evolutionary theory (mutation) is not informed by beliefs about eventual consequences. In contrast, human evolution is guided by the perceptions of the players; their choices (decisions) are made in the light of the theories the actors have, which provide expectations about outcomes.
Douglass C. North (1990) Institutions, Institutional Change and Economic Performance
- 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.
- p. 39
- 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).
- p. 97; As cited in: Oliver E. Williamson (1996) The Mechanisms of Governance. p. 4
- Effective institutions raise the benefits of cooperative solutions or the costs of defection, to use game theoretic terms.
- p. 89
- Specialization in this world is rudimentary and self-sufficiency characterizes most individual households
- p. 119
- 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.
- p. 121
Quotes about North
- 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 Lance E. Davis 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.
- Alfred D. Chandler, Jr. The Visible Hand (1977) p. 5
- 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.
- Nobel Committee Award Ceremony Speech 1993 by Professor Lennart Jörberg of the Royal Swedish Academy of Sciences.
- Douglass C. North Library of Economics and Liberty