Institutions, ideas and economic change: Some reflections on Geoffrey Hodgson's 'Culture and Institutions'

Professor Hodgson in his review of my A Culture of Growth (Princeton University Press, 2016) raises a number of important issues. One of them is the usefulness of the concept of a 'market for ideas' as an analytical tool in discussing the way cultural change affects economic change. Even though there is no price mechanism that clears the market, many basic components of the economic analysis of markets carry through and enriched by evolutionary concepts. A second question is the importance of cultural entrepreneurs, who play an important role in my book. It should be stressed that such 'Vital Few' were rarely indispensable, yet their influence on subsequent events may have imparted a direction on events and accelerated them. In any event, the success of such entrepreneurs was an indication of an intellectual environment sufficiently open to new ideas to be consistent with major new ideas such as the possibility and desirability of sustained economic progress.