The emergence of the international debt crisis in the 1980s is typically explained through exogenous shocks to the global economic system, first generating excess liquidity and then creating conditions which render previously attractive lending operations unprofitable. Thus, the international debt crisis is explained as a historical accident, driven by exogenous changes in the global markets. In fact, however, this debt crisis was not a unique occurrence, but rather the last event in a sequence of debt crises. Latin America alone has now experienced a total of five severe crises since the early 19th century. The central argument of this dissertation is that all these crises are characterized by the same structural forces which drive borrowing countries to take on an excess amount of capital, while commercial lenders are driven to engage in excessive lending. On the borrowing side, populist behavior was pervasive during the borrowing binges throughout history. Political leaders made use of the availability of capital from abroad to soothe social dissatisfaction at home and to strengthen their alliances in order to improve their leadership position. In fact, during the 1970s, borrowing volumes almost invariably increased substantially during periods of political instability or at times of elections. In a formal approach, such behavior can only be captured by substituting the political leader as crucial decision-making agent for the standard planner, typically used in economic modeling. A game-theoretic sequential equilibrium model is used to reveal the incentives for the politician to borrow beyond the socially optimal level. On the lending side, commercial creditors can consistently be separated into leaders and followers, be it in the form of investment banks and bondholders or money-center banks and small regional banking houses. Invariably, the leaders derived additional benefits from the lending operations which did not accrue to the followers. It therefore paid for the leaders to expand the lending volume, and required them to convince the followers of the profitability of these loans. A formal model based on informational asymmetries resulting from the segmentation of the banking industry during the 1970s shows the tendency to lend in excess of the social optimum.

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This dissertation traces the commodification of money in the U.S. after World War II. In 1945, all money was issued either directly by the government or, under conditions determined by the government, by commercial banks. Today, forms of money that are issued by private firms without government backing make up the majority of all money claims, and a significant part of the U.S. payment system is operated by a private organization. These forms of money were essentially in existence by 1980; hence this dissertation focuses on their emergence between the late 1940s and the late 1970s. The new forms of money emerged outside public purview. In part, this was the result of their wholesale character: they were used not by the many households and small businesses that each made modest payments but by the few large organizations that moved vast sums around. But it was also the result of a fundamental choice made by these large organizations. They created new forms of money not by trying to change public laws but by evading them, through private contract and private law. While public discourse and democratic decision-making played virtually no role in the process, the state as an issuer of financial instruments did. Central bank deposits and government securities formed the basis on top of which private actors built crucial parts of the new forms of money. Creating a new form of money is difficult because its creators need to achieve two potentially contradictory goals. To get private actors to join the market, the creators need to convince them that the products traded are equivalent to money. To keep public actors from shutting down the market, the creators have to convince them that the products traded are not money (otherwise, the creators would be involved in counterfeiting). The former goal, I will argue against non-sociological explanations, cannot be achieved only by discovering an opportunity for arbitrage, exploiting a legal loophole, or making use of technological change. As important as these cognitive innovations are, the creators of a new form of money also need to be able to mobilize preexisting social relationships, so that the necessary transaction volume to render a financial instrument a form of money is achieved. The latter goal—keeping the state from shutting down the new form of money—was particularly hard to achieve in the postwar U.S. with its policy monopoly over money exercised by the Federal Reserve, a knowledgeable and powerful institution. I will argue that private actors found it possible to create a new form of money when the Federal Reserve saw the innovation only secondarily as concerned with money and primarily as furthering one of its other goals, in particular the financing of the U.S. government and the functioning of the banking system. Drawing on new archival data, this dissertation traces the eventful process through which the creators of private money navigated the two conflicting imperatives. Chapters 2–4 investigate new forms of money as a store of value. Chapter 2 describes how securities firms and corporate treasurers created a pioneering money market—the one in repurchase agreements—and how the major commercial banks reacted by calling for a restoration of the old monetary system. Chapter 3 shows that, when this call went unheeded by the Federal Reserve, the commercial banks themselves began to create new money markets, with effects that percolated through the entire financial system and led participants to reassess their roles and the norms that guided their interactions. Chapter 4 explains the management of the first major crisis of the money market, in 1974, as a silent triumph of the commercial banks over the Federal Reserve—in a moment of weakness, the money market became entrenched. Chapter 5 turns to money as a means of payment. It shows that, in contrast to the decentralized emergence of the money market, major commercial banks in the late 1960s built a new payment system through coordinated action and, in the crisis of 1974, took tremendous risks to stabilize that new form of money.

Bibliography: pages 421-450.

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This study examines the socioeconomic aspects of ethnicity as a way to understand African-American entrepreneurship in the early twentieth century. In an attempt to separate the influence of ethnicity from the social and environmental elements that restrained many African-American entrepreneurs, the study focuses on the African-American funeral industry. The funeral industry provides a rare example of an industry that successfully operated on a voluntarily segregated basis. Sheltered from discrimination and racism, African-American funeral directors not only survived and surpassed their white counterparts, but also organized a national fraternity of economic and political elite who wielded significant power in the United States.;This reinterpretation of the African-American community's economic system and power structure in the early twentieth-century begins by portraying the achievements of two funeral directors located in Richmond, Virginia. The study uses their own statements to explain their commercial and social successes. The remainder of the study places their pattern of achievement in the larger context. This context includes the history of funeral directing in America, death rituals and their origins in African-American culture, folk beliefs, and African-American insurance enterprises.;The African-American insurance industry provided the financial support for the funeral directors' activities. African-Americans purchased at least one billion dollars worth of insurance by the end of the 1930's. Most insurance money entered the community through direct payments to the funeral director. By being the gatekeeper for a substantial flow of capital into the community, the funeral industry supported and financed many auxiliary community businesses.;In the African-American community, death rituals both created a sense of community and provided the economic basis to support that community. This study points out that the funeral business created by African-American entrepreneurs became an economic and cultural institution of wide significance in African-American business and social history. In this rare industry where racism did not place an economic cost on conducting business, this study proves African-American entrepreneurs experienced unprecedented success that scholars have been slow to recognize.

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Colonial Norfolk, Virginia, developed a more diversified economy than much of the rest of the tobacco-growing Chesapeake. Through a vigorous trade to the West Indies in agricultural products, local merchants prospered, and in 1736 a group of the leading local traders received a charter incorporating Norfolk town as a borough. From that time until the Revolution, through the offices of mayor and aldermen, who corresponded to county magistrates elsewhere in Virginia, the founding merchants and their hand-picked successors governed the town.;Norfolk's merchant-magistrates retained their grip on the town's political and economic life until after the Revolution, despite competition from new arrivals who came to Norfolk after 1750. This influx of new men resulted from economic developments in the wider Atlantic trading world which fueled significant local commercial expansion and created tensions resulting in violence in Norfolk in the 1760s.;The turbulence of the 1760s played a role in determining how Norfolk's merchant-magistrates reacted to the growing imperial crisis. While the established leaders formed the core of the area's patriot group during the Revolution, many of the newer arrivals remained loyal to Great Britain. at the beginning of the conflict, Norfolk Borough was almost totally destroyed, and its merchants, patriot and loyalist, became dispersed.;Norfolk's patriot merchants provide much-needed aid in supplying Virginia during the Revolution, and their wartime careers placed them in a favorable position to resume leadership of the borough after the war. In the post-war years, while the merchant-magistrates lost their oligarchic hold on local government with the revision of the borough charter in 1787, Norfolk's commercial vitality resumed. By 1800, Norfolk's leading merchants saw their economic preeminence confirmed through the establishment of the Norfolk branch of the Bank of the United States and the Norfolk Chamber of Commerce in 1800.

This dissertation looks at the formation of property rights institutions, using the creation of property rights in the radio spectrum in the United States from 1899 to 1934 as a case study that sheds light on both economic theories of institutional change and current policy debates over spectrum allocation. I first develop a theoretical framework for understanding the creation of property rights, recognizing that property rights can take on diverse forms that distribute the costs and benefits associated with resource use in different ways. This diversity is constrained by five economic factors—resource characteristics, technology, product markets, existing institutions, and ideologies. My historical case study provides compelling empirical support for theories developed by Douglas North and other “New Institutional” economists that stress the importance of existing institutions and ideologies in shaping property rights, placing these factors on an equal level with the first three, which have been the basis of neoclassical property rights theory. I argue that serious consideration of the roles played by existing institutions and ideologies in shaping property rights logically points to the need to redefine current theoretical assumptions about individual economic actors and to incorporate concepts of power into economic analysis. The historical component of my dissertation is based on research at six historical archives. I focus on the economic history of spectrum property rights in the United States before World War I, choosing this time period for two reasons. First, as my research shows, the activities of early commercial wireless firms of this period were crucial in shaping a unique system of spectrum property rights in the United States. Second, the importance of this period in shaping the structure and allocation of spectrum rights has gone largely unrecognized both in the existing radio history literature and in the economic literature on property rights in the spectrum. In the concluding chapter I argue that economic analyses of spectrum property rights must incorporate the distinctive enforcement issues associated with resource characteristics of the radio spectrum, and the public goods attributes of spectrum product markets. Such considerations are important in efforts to preserve and extend public and other non-profit rights not only to the spectrum but also in other areas of telecommunications.