Economic Writings Research Articles

"This Immense Expense of Art": George Eliot and John Ruskin on Consumption and the Limits of Sympathy

This essay attempts to better our understanding of George Eliot's conservatism by examining a body of ideas about consumption and moral obligation that she and John Ruskin share. I use a discussion of consumer ethics to explore the moral logic of their conservatism by examining the role of the aesthetic within it. Economic consumption and the aesthetic are subjects inextricably connected, not just because the discourses of political economy and aesthetics have a shared origin in eighteenth-century moral philosophy, but also because the discourse of aesthetics has long served to legitimize select modes and acts of consumption. By marking out a limit where one may reasonably cease to sympathize and instead devote energy (and money) to personal gratification, the treatment of consumption in George Eliot's Middlemarch (1871) offers an important articulation of moral thought. Eliot suggests that aesthetic pleasure can make consumption morally defensible, but she also anticipates Pierre Bourdieu's critique of the aesthetic: her novel represents both the display of cultural capital and the exercise of the aesthetic disposition as ways of maintaining social and economic hierarchies. She thus at once critiques and participates in the system within which the aesthetic functions to preserve social and political stasis. Using John Ruskin's economic writings to expose Middlemarch as a novel of consumer ethics, this essay examines Eliot's representation of personal economic consumption as an emergent mode of social and political agency that might operate productively within that stasis.

Business‐government relations: beyond lobbying

PurposeParallel with business and society relationships, the business and government relationship needs greater attention. Business and government relations beyond short‐term lobbying could be seen as a strategic activity aimed at creating sustainable value for the company. As such it would become much easier to achieve competitive advantage and align the company's commercial with the public interest. This paper seeks to examine this issue.Design/methodology/approachThe paper aims to scan the issue with a view to further research.FindingsThe economic crisis and the imminent new wave of regulation make a new approach to lobbying more pressing.Originality/valueThe paper is based on political and economic writings and on practical experience in the public and private sector.

Rhetoric and Metaphor in Economic Writings

Rhetoric and Metaphor in Economic Writings

Circulation and representation: Jews, department stores and cosmopolitan consumption in Germany, c.1880s–1930s

This essay looks at the problem of Jews and cosmopolitanism from the perspective of consumer culture in modern Germany. It focuses on German department stores, the great majority of which were owned by Jews, and which were stationary sites for the convergence of goods, styles, people and capital from all over the world. The essay then traces discourses on and representations of circulation across a variety of media and genres, including department store advertisements, economic writings, anti-department store propaganda and fiction, showing how department store owners and their harshest critics drew on a common set of terms and symbols to represent modern mass consumption. While department stores used cosmopolitanism to promote their goods and create enticing product displays and consumer spectacles, their critics charged that these stores, because of their cosmopolitanism, were insufficiently rooted in German traditions and mores and represented a threat from the Jewish East.

Keynes and ‘Psychology’

Keynes’ views on expectations, rationality and business decision making have often been misunderstood, most recently by George Akerlof and Robert Shiller in their book, Animal Spirits. In this paper I discuss the role of “psychology” in Keynes’ economic writings, with particular reference to the General Theory. I outline the nature and significance of their misinterpretation in Section 1. Then, in Section 2, I summarise the literature on Keynes, Bloomsbury and Freudian psychology. I argue that it makes far too much of a very tenuous connection between the Cambridge economist and the Viennese psychologist, and cite the (very limited) evidence concerning Freud’s influence on Keynes. In Section 3, I conduct a detailed textual analysis of the use of “psychological”, and related terms, in the General Theory. In Section 4, I extend the discussion to Keynes’ entire Collected Works, before and after 1936. I conclude, in Section 5, that Keynes’ use of “psychology” is unsystematic and confusing, and should have been avoided.

The trials of theory: Psychology and institutionalist economics, 1910–1931

The rise of the institutionalist school of economics, in the 1910s and 1920s, has recently been given the historical attention it deserves. However, historical studies of the school have left two questions unanswered. First, to what extent was the institutionalist's interest in academic psychology (frequently declared in their meta-economic writings) realized in their economic writings? Second, what evidence of a fruitful collaboration with institutional economics can be found in the work of psychologists? In this paper I consider the meta-economic statements of three key institutionalists, Wesley C. Mitchell, John M. Clark, and Walton H. Hamilton, and two key economic works by Mitchell and Clark. I contend that these works show little systematic engagement of academic psychology. A study of psychological literature of the period yields the same conclusion; in particular, industrial psychology did not come into fruitful contact with institutional economics, despite the parallel interests of the two fields and their parallel rise after World War I.

Notes on Contributors

Notes on Contributors

Memorializing John K. Galbraith: A Review of His Major Works, 1908–2006

This paper attempts to address the essential legacy of Kenneth Galbraith (1908–2006) spread over a broad range of subjects. Galbraith is a forerunner of the most popular, imaginative and idea creating economic writers of the last century. His economic eyes were the first to discern the historic and institutional forces behind the countervailing powers of big business and big unions, the culmination of techno structure in the land-capital dominance of the evolution of factors of production, the pairing of buyers and sellers for market clearance in disequilibrium, and as Milton Friedman stated, the only person who has made a serious attempt to justify price and wage controls.

William Thomas Thornton’s ‘The True Consequences of the Repeal of the Corn Laws’ with an Introduction and Annotations

In early 1841, William T. Thornton (1813-1880) accepted an invitation to address members of the Travellers' Club on the divisive issue of the repeal of the Corn Laws. Until his return to England in 1835, Thornton had led a peripatetic life, initially travelling to Malta in the 1820s where he resided with a well-connected relative, Sir William Henry Thornton, the Auditor-General, before sallying off to the Ottoman capital, Constantinople, where he secured employment on the staff of the British Consul, John Cartwright. When he returned from the Levant he settled in London where he gained employment at the East India Company, a position secured through family connections. Thornton had been appointed to the lowest rung within the Company's administrative structure, but he was now confidently making his way in the world and seemed destined for bigger things. At some stage between his return to London in 1835 and his presentation to the Travellers' Club in 1841 the foundation for his life-long interest in political economy was laid. This interest led initially to his embarking upon an examination of the economic impact of the Corn Laws, followed by the Travellers' Club presentation and finally the penning of a little-known pamphlet titled The True Consequences of the Repeal of the Corn Laws (1841), judiciously published by Effingham Wilson, a London bookseller renowned for issuing material other London publishers were reluctant to handle. This pamphlet, which has never before been republished, is reproduced in full below. Its publication can be justified on several grounds. First, even though the pamphlet constitutes Thornton's earliest efforts as an economic writer it has only ever been acknowledged in the literature by Grampp (1956), whose passing reference to it was accompanied by a very peculiar reading of Thornton on the Corn Laws and money wages. Second, it should be understood that the pamphlet is a piece of comparative juvenilia that contributed to the wider economic debate on agricultural protection along partisan lines. For example, Thornton's use of a simplistic wage fund construction to determine money wages allows the reader to better gauge how far he had travelled by the 1860s when he presented a more sophisticated critique of the wage fund in terms of supply and demand theory. Third, the impression of juvenilia is reinforced by tracing the approach that Thornton adopts when accounting for changes in the pattern of trade after repeal. His study is quite compatible with, and the language indicates that it was constructed in terms of, an absolute advantage argument rather than along Ricardian comparative advantage lines. Fourth, his view of the incidence of tax, although largely correct, is open to criticism due to the narrowness of its premise. Fifth, the pamphlet anticipates a number of economic topics that Thornton canvassed more thoroughly in his Overpopulation and Its Remedy (1846) and A Plea for Peasant Proprietors (1848), both of which received handsome notices in the leading Victorian periodicals of the day. From this perspective, Thornton's pamphlet may be seen as representing a capsule summary of the two more assured works he published during the late 1840s which announced his arrival as both an important and a new economic voice.

The United States and the world economy in the future: America′s global exceptionalism firmly rooted in entrepreneurship

Morris Beschloss is a former corporate CEO, an economic analyst, writer and lecturer. He appears on television and radio and has a daily blog in newspapers across the USA. I asked him to write about the future of the economies of the countries around the world in the next 5 to 10 years. This is his response. As a background for our readers, Keynesian economic theory was developed by John Manyard Keynes, a British economist in the 1930s. Keynes believed that increased government spending during economic recessions could revive the economy. According to Dick Armey, a Professor of Economics and former Member of the US Congress (WSJ; February 4, 2009; “Washington could use less Keynes and more Hayek”), Keynes believed that “general employment was always positively correlated with the aggregate demand for consumer goods. Keynes argued that government should intervene in the economy to maintain aggregate demand and full employment, with the goal of smoothing out business cycles. During recessions, he asserted, government should borrow money and spend it.” His macroeconomic theories have been adopted by most western countries and have been embraced by the Obama administration in the USA. His policies are also the basis of Chinese economics, which is Marxist in origin. Friedrich Hayek, a contemporary of Keynes and a Noble economist from Austria, disagreed with Keynes and supported classic economic theory that advocated “balanced budgets and government restraint.” Another Nobel economist, James Buchanan, argued “that the great flaw in Keynesian economics is that it ignores the obvious self-interested incentives of government actors implementing fiscal policy and creates intellectual cover for what would otherwise be viewed as self-serving and irresponsible behavior by politicians. It is also very difficult to turn off the spigot in better economic times, and Keynes blithely ignored the long-term effects of financing an expanded deficit.” Armey stated that “if the government borrows the money for the stimulus, then it will either have to print money later or raise taxes to pay it back. If the government prints the money, it will increase inflation, which will decrease the value of the dollar … Hayek viewed the boom and bust of the business cycle as primarily a monetary phenomenon created by government’s artificial inflation of money and credit … The problem with government attempts to manipulate the economy through fiscal policy — spending that takes resources away from those who are productive and redistributes it to politically-favored interests — is that they are audacious. It assumes that government knows better how to spend and invest than individuals acting in their families’ best interest … no one spends someone else’s money better than they spend their own.” So, those are the opposing macroeconomic theories that are influencing the economies of the world today. What is happening in your country now and how will those changes affect your practice of medicine? Read Morrie’s comments below. — Editor-in-Chief

Isaac Butt and the Early Development of the Marginal Utility Theory of Imputation

One of the most remarkable and hitherto unnoticed developments in nineteenth-century British thought, was Isaac Butt's (1) attempt to combine Mountifort Longfield's theory of profit (2) with the general utility teachings of Jean Baptiste Say (3) and thereby develop one of the earliest presentations (if not the earliest) of the marginal utility theory of imputation. The idea that the valuation of productive resources is inextricably linked to the of the commodities they help produce constitutes a theme throughout all of Say's writings on economics. However, the more technical question of exactly how this value created is exactly apportioned among the productive factors is one that Say himself did not attempt to answer. The answer to this question depended on (i) finding some method of individually assessing the relative importance of resources that are employed in combination and (ii) demonstrating that the spontaneous forces of the market do in fact reward factors in accordance with their relative importance. Longfield had provided such principles in the course of his own account of how the national product is distributed among the three great classes of society--the landlords, capitalists, and workers. (4) It remained for Longfield's disciple Isaac Butt to combine the technical apparatus provided by his teacher with the general utility orientation of Say and thereby arrive at an early version of what in the latter part of the nineteenth century became a leading doctrine of the utility school--the marginal utility theory of imputation. During the last quarter of the nineteenth century and thereafter, sprang up an extensive literature on the historical origins of the doctrines of the marginal utility school of economics. (5) For almost half a century, the search for precursors, (which uncovered such giants as von Thunen, Gossen, and Cournot) bypassed completely the writings of a small but unquestionably original group of economists who wrote and lectured at Trinity College, Dublin, during the first part of the nineteenth The creation of the Whately Chair of Political Economy at that college in 1832 made it financially possible for a variety of talented minds to turn their energies to the subject matter of this nascent science. However, despite the preponderance of original ideas and discoveries in their published lectures, the economic writings of authors such as Longfield and Butt remained obscure and without much influence outside Ireland. (6) This oversight was largely remedied when in 1903 E. A. G. Seligman published his now famous essay, On Some Neglected British Economists. (7) Seligman lauded the and distribution theories of the two earliest Irish professors, Longfield and Butt, and declared that they had made important contributions to the early development of marginalist doctrine. Years later, in 1945, R. D. Collison Black went a step further and established the fact that something closely approaching a 'subjective school' existed at Dublin University in the mid-nineteenth century. Black reviewed practically the whole of the published writings of the early line of Whately professors at Trinity College, Dublin, and found them more congenial to the utility theory than the writings of their English contemporaries across the channel. (8) Seligman and Black's complementary interpretations were taken over and reinforced by Schumpeter in his History of Economic Analysis. (9) When assessing Butt's individual contribution to economics, Black was reluctant to credit him with having advanced the utility doctrine beyond the state in which it was left by his precursor Black writes that there is no considerable development of [utility] ideas in Butt's work, but he uses them as an introduction to a theory of original based upon productivity considerations, after the method of Longfield. (10) Neither Black nor any other writer has developed this statement further and the contemporary reader is apt to overlook the fact that by working out a novel theory of original prices, Butt was actually (with the aid of Longfield's analytic apparatus) presenting an embryonic version of the marginal utility theory of imputation. …

POLITICAL ECONOMY, THE STATE, AND REVOLUTION IN EIGHTEENTH-CENTURY FRANCE

Among the stunning changes in material and intellectual life that transformed eighteenth-century Europe, perhaps none excited as much contemporary consternation as the twin-headed growth of a modern commercial economy and the fiscal–military state. As economies became increasingly based on trade, money, and credit, and states both exploded in size and forged seemingly insoluble ties to the world of finance, intellectuals displayed growing anxiety about just what kind of political, economic, and social order was taking shape before their eyes. Two important new books by Michael Sonenscher and John Shovlin, Before the Deluge: Public Debt, Inequality, and the Intellectual Origins of the French Revolution and The Political Economy of Virtue: Luxury, Patriotism, and the Origins of the French Revolution, tackle these apprehensions and the roles they played in forging French political and economic writings in the second half of the eighteenth century. Both authors also take the further step of demonstrating the impact of the ideas they study on the origins of the French Revolution.

Werner Stark and Jeremy Bentham's Economic Writings

Since its publication in three volumes in 1952–1954, Werner Stark's edition of Jeremy Bentham's Economic Writings has been the standard source for the study of the economic thought of Jeremy Bentha...

“Un Impérialiste Libéral”? Jean-Baptiste Say on Colonies and the Extra-European World

Jean-Baptiste Say is remembered as the father of French economic liberalism and as the origin of a long line of French writers who opposed colonization on the basis of free-trade arguments. This article argues that because Say's commentators have primarily focused on his economic writings, they have misinterpreted his overall thought on colonies and on the extra-European world. Far from always defending the political independence of extra-European societies, Say put forward the same sort of argument in favor of European domination as his friend James Mill. By investigating Say's early writings and lesser-known texts, this article suggests that Say's colonial writings need to be reassessed in light of the specific intellectual and political context of the late eighteenth century. In doing so it also offers new insights into the intellectual origins of so-called French imperial liberalism. On présente souvent Jean-Baptiste Say comme un défenseur français des doctrines libérales de l'économie politique anglaise. On lui attribue également l'origine d'une tradition française d'opposition au colonialisme fondé sur des arguments économiques de libre-échange. Cet article suggère que les commentateurs de Say, parce qu'ils se sont principalement intéressés à ses écrits économiques, n'ont pas saisi la portée générale de sa pensée coloniale. Say n'a pas toujours défendu l'indépendance politique des sociétés non européennes ; au contraire, il a parfois mis en avant les mêmes arguments que son ami James Mill en faveur de la domination européenne dans le monde. A travers une analyse des écrits de jeunesse de Say, ainsi que de certains textes jusqu'ici négligés, cet article considère les écrits coloniaux de Say à la lumière du contexte intellectuel et politique de la fin du dix-huitième siècle. Ce faisant, il suggère de nouvelles perspectives pour l'étude des origines de « l'impérialisme libéral » français.

Towards a Late View of Capitalism: Dehistoricized Finance in The Financier

Towards a Late View of Capitalism:Dehistoricized Finance in The Financier Alison Shonkwiler A reader first encountering Theodore Dreiser's The Financier (1912)1 might find it curious that a novel that so closely tracks a series of shady financial deals appears at the same time as a tribute to the historical rise of finance capitalism. The financier in question, Frank Cowperwood, attains wealth and prominence in Philadelphia in the late 1860s, is ruined during the financial panic of 1871, and is tried and convicted for a scheme in which he borrows money in an attempt to save his business. After his release from prison, Cowperwood exploits the great panic of 1873 to recover his fortune and triumph over the rivals who had sought to destroy him. In this final turn of events, the text's de-emphasis of moral accountability is perhaps most striking; the drama of Cowperwood's "great hour" appears fully at odds with a negative judgment on his amorality or opportunism. That the financier achieves his greatest strength at a moment of widespread economic ruin might suggest that the text shares the age's deep ambivalence about financial titans, reflecting what historian Steve Fraser calls the characteristically American fascination with and profound mistrust of Wall Street. And, indeed, although Dreiser is certainly clear-eyed about the risks of financial expansion-the concentration of economic power into fewer hands, and the ability of business to outpace the law-his sweeping descriptions of historical events tend to read less as social critique than as paeans to the massive new opportunities of the period and the exceptional individuals who realize them. Yet even in its embrace of such contradictions, I wish to argue, the text produces not a historical ambivalence about the rise of the financier but a formal ambivalence in the novel's account of historical change. In the formal intimacy of the text's financial descriptions is to be found perhaps the most sensitive register of historical tremors, where fissures of opportunity are constantly [End Page 42] being opened and closed by the movement of history, and where the details of what is possible, from a pragmatist's standpoint, produce expectations for the material shape of the future. The financier's operations both embrace and refute a progressivist view of history, revealing the tension in the novel between the "natural" system of capitalism and the role of capitalism's historical agent-such as he is. The text's argument over the randomness of events versus the evolutionary trajectory of history is hardly an inconsistency: in accommodating order and disorder, progression and disruption at the same time, Dreiser's account of history corresponds to the views of many scientific historians and economic writers of the period.2 But more to the point, it becomes the source of one of the text's most productive interrogations: the question of what capital can or cannot do in particular historical circumstances. With this approach, it becomes possible to see the text as not simply "borrowing" from biographical history to explain the financier, nor treating as this figure as a self-sufficient explanation of history, but instead as using the emergence of the financier to negotiate between competing models of history. Donald Pizer's observation that the historical narrative in the Cowperwood trilogy feels "forced" (7) might lead some to question what does not feel forced in a long and unwieldy narrative that, in its attention to the details of financial transactions, is certainly unequalled in American literary realism. The extensive descriptions in The Financier (Howard Horwitz calls them "transcriptive" [201]) together with Dreiser's commentary about the nation's post-Civil War economic and geographical growth (he even notes historical milestones that the country has not yet passed), have been viewed as examples of the text's unsuccessful integration of aesthetic and historical concerns. Recent analyses have attended in particular to the novel's awkwardly alternating plot structure, its excess of financial detail, and its heavy-handed metaphors of strength and weakness, using such formal deficiencies as a lens into the text's governing systems of value and representation.3 But I suggest that as a means to identify some of...

Classical libertarianism: The economic perspectives of Milton Friedman including his likely views on the ‘proper’ role of government in the subprime mortgage debacle

This study presents the libertarian ideas of Milton Friedman, the Nobel Prize in Economics awardee in 1976 and the most influential libertarian of the twentieth century. Specifically, the foundations of Milton Friedman's libertarianism, which are private property rights, competitive markets, economic, political and civic freedoms and the limited role of Federal government, are articulated. Further, public policy issues where Milton Friedman's suggested reforms have been successfully implemented in varying degrees are also detailed. They include (1) floating the dollar, (2) ending the military draft, (3) repealing interest rate ceilings, (4) treasury innovations such as auctions and inflation indexed bonds, (5) ending rent control, (6) deregulation in industries such as banking and telecommunications and (7) promoting market completion and individual choice in primary and secondary schools. Also, presented are Milton Friedman's likely economic assessments of the Federal government's, including both the Federal Reserve System and the Department of Treasury, economic stimulus programmes to resuscitate the economy from the subprime mortgage debacle. These inferences about Milton Friedman's likely economic assessments are based upon his published economic writings and a recent interview with his long-time collaborator, Anna Schwartz. Mr Friedman's likely economic assessments, as a short list, include (1) the grade for the monetary policy of the Federal Reserve System in the subprime mortgage debacle was below average because it did not address the fundamental problem of the financial markets being unable to accurately price the risky securitised subprime mortgage products and the mistaken belief that credit default swaps (CDSs) would adequately hedge their future asset risks, (2) that the Paulson II economic stimulus plan lacked any rigorous and systematic economic justification because it rewards financial institutions that have performed poorly and because it results in partial nationalisation of the financial services system, (3) the Paulson plans result in a large increase in government size via a large increase in government expenditures and (4) there will be multiple challenges to capitalism as the primary resource allocator. Also discussed are the determinants of the subprime mortgage debacle including (1) the increased demand for securitised mortgage products resulting in significantly lower mortgage lending standards for home loan borrowers and (2) the belief that CDSs could/would reduce the risk associated with the ownership of subprime mortgage tranches. These two phenomena have led to a number of sinister economic results such as (1) the absence of market clearing transactions and hence (2) market prices for securitised subprime mortgages, (3) meaningful assessments of the probabilities of default/bankruptcies of many firms in the financial services industry.

Economics and Religion (The International Library of Critical Writings in Economics) ‐ Edited by Paul Oslington

Economic RecordVolume 84, Issue 267 p. 524-526 Economics and Religion (The International Library of Critical Writings in Economics) - Edited by Paul Oslington Ian Smith, Ian Smith University of St AndrewsSearch for more papers by this author Ian Smith, Ian Smith University of St AndrewsSearch for more papers by this author First published: 03 December 2008 https://doi.org/10.1111/j.1475-4932.2008.00521.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Volume84, Issue267December 2008Pages 524-526 RelatedInformation

An Inquiry into the Nature and Effects of Henry Thornton's Christian Faith on the Existence and Content of His Economic Writings

Since the reintroduction of Henry Thornton's Enquiry into the Nature and Effects of the Paper Credit of Great Britain (1802) by Friedrich Hayek in 1939, Thornton has been regarded as one of the world's premier monetary theorists. In his own time, Thornton was better known for joining with William Wilberforce to assemble the “Clapham sect.” This group of evangelical Christians pressed the cause of Christ in all manner of venues, most prominently in seeking to end the slave trade and in working to repatriate freed slaves to Africa. Thornton served on numerous committees working on these and other projects, gave profusely from his own income to support these causes, and wrote far more on Christian subjects than on economics. Yet, in a time when political economy and religion mixed rather easily, Thornton's Paper Credit appears to be not a work in moral philosophy or Smithian political economy but a technical treatise on monetary theory and policy. Is it possible that such a devout believer, living in an era when political economy and religion so easily intertwined, would not seek to advance his religious agenda along with his economic agenda? This article concludes that it was indeed possible; the Paper Credit itself contains no religious arguments whatsoever, and Thornton's policy prescriptions make sense on narrow economic grounds. However, Thornton's work on economics is connected to his faith in one important way: Thornton was a “doer,” not just a “hearer,” and a doer of the Gospel could not avoid lending his expertise to his country in the dark days of the Napoleonic wars. Thus Thornton appears as a disinterested economist whose motivation to serve came from his devotion to Christ.

Economics and psychology: Economic psychology according to James Mill and John Stuart Mill

James and John Stuart Mill contributed to shaping both political economy and academic psychology. Their main publications in economics and psychology reflected the state of the art in both sciences and gave new impetus to the thinking. The paper examines to what extent they used academic psychology in their economic writings and economics in their psychological writings. The upshot is that there was little cross-fertilization. The psychological assumptions underlying economics, economic psychology in its basic sense, were in their treatment based on common-sense psychology and not on academic psychology. In his treatise on psychology in which he reviewed current academic psychology, James Mill devoted some chapters to motives related to money and wealth. He thus approached economic psychology in a psychological context. His son John Stuart succinctly formulated the idea of the economic man and explored in depth the simple psychological law that ‘a greater gain is preferred to the smaller’. He propounded an important division of labor between economics and psychology.

Contractual Enforcement Institutions and the Structure of Information

Many economic writers on contract theory have assumed that legal institutions are simply unable to do the job of enforcement, and have thus attempted to devise arrangements that motivate the parties to keep their commitments even though a government tribunal would be unable to tell whether they had performed. But non-legal enforcement mechanisms operate both as substitutes and complements for legal mechanisms (and as substitutes and complements for each other). This essay sketches how parties should choose among available enforcement mechanisms, based on the costs of information and other transaction costs.