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The general process of institutionalization in the European Union is examined from a macro perspective, building on the theoretical materials developed in the earlier book European Integration and Supranational Governance, and examining the extent to which linkages between rule-making (legislation), dispute resolution, and different forms of transnational activity have created a dynamic, inherently expansionary system. The process is evaluated from the standpoint of institutionalist theory by testing specific hypotheses against relatively comprehensive quantitative measures of integration: trading, legislating, litigating, and lobbying within the context of the Treaty of Rome. The main findings are that (1) increasing economic transactions, (2) the construction of the Brussels complex, (3) the capacity of supranational authorities to produce legislation, and (4) the operation of the European Commission (EC) legal system have become linked through a complex set of feedback loops that binds them together in a self-reinforcing system that broadly determines the course of integration. Although the perspective used is a macro one, the authors emphasize actors and agency: as increasing numbers of actors learn how to be effective in the EC, they build and consolidate new arenas for political activity, thereby bolstering the centrality of supranational governance.

This chapter looks at sexually tinged relationships. It builds on a two-dimensional classification of sexual relationships dependent on their duration (brief or durable) and their breadth (narrow or broad). It adds a new and interesting complication: that the organizational setting in which a sexually tinged relationship occurs significantly affects its meaning, its appropriate economic transaction, and the efforts of third parties to control or suppress them. The chapter stresses the following points: (1) The widespread belief that money corrupts intimacy blocks our ability to describe and explain how money, power, and sex actually interact. (2) The opposite belief—that sex operates like an ordinary market commodity—serves description and explanation no better. (3) The intersection of sex, money, and power does indeed generate confusion and conflict, but that is precisely because participants are simultaneously negotiating delicate, consequential, interpersonal relations and marking differences between those relations and others with which they could easily and dangerously be confused. (4) In everyday social life, people deal with these difficulties with a set of practices we can call “good matches.”

This chapter gives an overview of arguments prominent in the economics of suretyship law. The intention was to show that economics may help answer some puzzling questions of suretyship law, but also to make some recommendations on how suretyship law may be improved. In order to provide a balanced view, the economic model of sureties who behave rationally was countered by the findings of behavioural economics. The theoretical discussion was supplemented by a comparison of family suretyship law in Germany and England, which showed that different legal orders react differently to the problems that may arise from suretyships. There seems to be two paradigms from which suretyship law may be derived: on the one hand the liberal paradigm, which assumes that sureties act with a high level of rationality and thus views a modest regulation of suretyship transactions as sufficient; and on the other hand the paternalistic paradigm, which assumes subjects are only bounded rationally and have to be protected against their sometimes irrational behaviour.

This chapter focuses on the one area of economic regulation that seems to complement, rather than thwart, markets. It makes the case against international cooperation regarding competition policy. The case rests on three propositions: A large portion of international economic transactions involve innovative, knowledge-based industries; no international consensus exists about the optimal structure of such industries; and in the absence of consensus about optimal industry structure, cooperation that purports to promote competition policy may instead protect incumbents and stifle innovation. It argues that the case for international cooperation over competition policy turns on dubious premises and unrealistic hopes. It might just be possible that someone can design an institution that both insulates competition policy specialists from the conventional pressure to provide rents to special interests and confines the range of cooperation to subjects on which competition policy has reached a solid and general consensus. But specifying either of these features seems challenging, and imposing both, highly unlikely.

This chapter discusses the economic status and ethnicity of petitioners and litigants. A good number of people of high and middling economic status appear as petitioners and litigants, and there is no reason to believe that any of the major ethnic groups of the province avoided the justice system as a rule. Nevertheless, the very poor seem to be underrepresented as petitioners and litigants. The costs of petitioning and litigation perhaps deterred some. But the economic profile of petitioners was also the result of ideas about what sorts of disputes were appropriate to bring before a state official: overwhelmingly, the petitions complain of wrongs that involved property or economic transactions.

This chapter begins with a discussion of the different forms and shapes of suretyships, and the diverse legal responses to them. It then addresses the question of whose interests should prevail. This is followed by discussions covering information disclosure and form-based requirements, intervention in the terms of the suretyship contract, legal rules affecting the context in which suretyships are agreed and enforced, and the constitutional dimension to the control exercised over private relationships, including contracts.

This chapter assesses the shift in credit practices and its implications for how colonial subjects experienced the future. Ideas about money and economic relationships had also transformed by the end of the colonial era, leading to a far more flexible system of credit and trade. By 1800 a more liberal market for credit and a new attitude toward risk and just pricing could be found throughout New Spain. Innovative financial instruments created opportunities for sophisticated financial hedging and risk management. Yet custom and values strongly influenced these innovations. They grew out of a tradition in Christian theology in which the church carved out a role for itself as a protector of the poor and where in theory, if not always in practice, its regulatory authority over economic transactions ensured some basic amount of market justice.

This chapter summarizes the main findings of the study of the U.S. economic embargo against Cuba and provides some suggestions for a more effective U.S. policy toward Cuba. The United States and Cuba face a tough road toward finding a common ground. Five decades of animosities and mutual distrust are not so easy to erase. Havana has made abundantly clear that it will not make any unilateral concessions to improve relations with its powerful northern neighbor. Washington is still defending the embargo as a useful instrument of economic coercion. In reality, the greatest accomplishment of the embargo was to undermine U.S. ability to influence positive changes on the island while failing to deprive the Castro government of the financial wherewithal to resist those changes.

This introductory chapter sets out the book’s purpose, which is to present a wide range of economic research on conflict. It brings together a variety of approaches, from the purely game-theoretical to the experimental, that all have in common a rational-choice perspective on conflict—a topic that often in the past has been thought to involve the inherently irrational. It is argued that economics needs a theory of conflict because economic transactions, even when they are not outright conflicting, necessarily take place in the shadow of conflict. An overview of the subsequent chapters is also presented.

Chapter 2 examines how commissioning parents create and make sense of their relations with surrogates, egg donors, and the children born through surrogacy. This chapter asks: How do intended parents narrate their family’s origin stories? Within these narratives, what kinds of racial ideologies do they rely on? The chapter argues that commissioning parents construct boundaries that position the surrogate as racially Other to themselves and their families, in ways that allow them to focus on Indian women alternately as objects of rescue or as shrewd actors involved in economic transactions. The chapter shows how these narratives serve to naturalize inequities between commissioning parents and surrogates in order to justify their participation in unequal economic arrangements.

This chapter argues that before societies organized on a scale larger than the tribe, living conditions and human mentality did not conceive of profits. People had little material wealth or desire for gain, and their sense of time made calculation difficult. The possibility of profit first emerged in the organized irrigation societies of Egypt and southern Mesopotamia, an area known as Sumeria whose natural endowments made trade important. Their leaders began to accumulate material wealth. Traders could then earn profits, perhaps most often from buying and selling slaves, and use the profits for their own benefit. Other opportunities for profit, such as crop loans, shipping, and retailing followed. Over the next thousand or so years, culminating in the reign of Babylonia's King Hammurabi, most key business developments followed improvements in government. Another key development was the invention, discovery, or creation of tools that would be essential to business becoming a common and competent activity: calculation, writing, forecasting, and legal systems.

This chapter introduces a system of financial accounts to allow for a representation of monetary policy implementation at the basic level of economic transactions. Transactions are represented within a closed economy consisting of four sectors: households, banks, corporations (including the government), and the central bank. This approach makes it possible to capture all transactions of relevance for monetary policy implementation and liquidity crises in a systematic way. Liquidity flows can be followed through the system, making it possible to identify the liquidity buffers a monetary system has, with which to cushion changes in the asset allocation of the household sector without economic damage. The financial accounts logic will be applied throughout the book.