*The Institutional Revolution*

The author is Douglas W. Allen and the subtitle is Measurement & the Economic Emergence of the Modern World.  I thoroughly enjoyed this excellent book, here is a summary paragraph:

Having consistent weights and measures, like knowing the precise time, allowed for — almost by definition — more accurate and less costly monitoring.  The lowered transaction costs of measurement meant that institutions which relied on measurement could be used more effectively.  Productivity could be measured in terms of output per unit of time, speeds could be accurately recorded and tracked, commerce could flourish without confusion and error, land and buildings could be surveyed accurately, and fraud could be mitigated.  Today, these matters are dealt with easily and to a much tighter standard.  Without the ease of measurement, the variability of life would be drastically higher; we would be uncertain about what we were getting and giving in most exchanges.

Allen (p.177) argues that private lighthouses worked well when ships had to hug the coast, but less well when sail power improved and ship routes became more distant and more variable and less tied to port proximity and coast hugging.  Also good was the discussion of how Industrial Revolution factories were located in isolated areas to minimize theft costs (pp.214-215), and how this later changed.

The book is due out in December.


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