Transaction Costs through Time

Abstract

"An economic definition of transaction costs are the costs of measuring what is being exchanged and enforcing agreements. In the larger context of societal evolution they are all the costs involved in human interaction over time. It is this larger context that I wish to explore in this essay. The concept is a close kin to the notion of social capital advanced by James Coleman (1990) and applied imaginatively to studying the differential patterns of Italian regional development by Robert Putnam in 'Making Democracy Work' (1993). This essay, therefore, is a study in economic history which focuses on the costs of human coordination and cooperation through time which I regard as the key dilemma of societies past, present and future."