Douglas North's Theory Analysis

The following critique essay aims to critically engage with Douglass North’s Structure and Change in Economic History through an examination of North’s theoretical propositions and an analysis of his application of these theoretical foundations to various historical periods of rapid economic transformation. Specifically, the first section will pull out North’s primary theoretical assertions and assess their merits relative to their primary theoretical rivals. The second section will examine two of North’s attempts to apply his theory of economic change to empirical cases.
Theory: An Overview and Response to North’s Theoretical Claims
North seeks to establish a theory capable of explaining structural economic change. By “structure,” North is referring to those aspects of a society that determine economic performance such as technology, population, institutions, and ideology (North 3). North’s theory can be understood as an addition to the neoclassical model of an economy. Somewhat paradoxically, North justifies the use of the neoclassical approach as his starting point by citing its strong – and often violated – assumptions regarding the perfect flow of resources and information amongst economic actors. That is, because the …show more content…
However, a more careful look at this period reveals that human population growth appears to have been in a state of equilibrium for thousands of years prior to the adoption of plant cultivation. The assumption of positive population growth is central to North’s contention that hunting will be characterized by diminishing returns. North’s reasoning is that, hunting and gathering depletes the environment in which it takes place. However, such resource depletion requires a human population of sufficient size to extract natural resources at a rate that exceeds the natural rate at which these resources replenish