Inputs and Institutions as Conservative Elements

Abstract:     
Ludwig von Mises argued that capital goods were 'conservative elements' that constrain future production decisions. Similarly, social capital and institutions also constrain future production decisions. These insights are applied to the institutional transformation of the post-Reconstruction American South. It is argued that the structure of social capital that developed in the South was inappropriate to the formal institutions that emerged as a result of the Civil War and Reconstruction. The tensions between institutions and social capital are examined in the context of racist lynching.

Keywords: institutions, US South, racism, lynching

JEL Classification: B53, N11, N91, O18

Accepted Paper Series