For Joseph Schumpeter, the heart of the capitalist system was the entrepreneur – an extraordinary individual who had the foresight to see profit in new products or production processes as well as the tenacity to overcome any obstacles that stood in the way. Schumpeter believed that the rise of large firms in the early 20th century was making the entrepreneur obsolete. By investing in in-house research and development (R&D) laboratories staffed by teams of engineers and scientists, large firms had routinized the process of innovation, “depersonalized and autonomatized” technological change, so that the incremental advances were realized “as a matter of course.” In such an environment not only did “personality and will power,” and thus the entrepreneur, “count for less,” but the greater efficiency of large-scale enterprises was undermining the small- and medium-size firms that historically had been the spawning ground for heroic innovators with radically new ideas about how to do things. These developments, Schumpeter foretold, would have profound consequences for the entire society. Because entrepreneurs were the primary political supports for “private property and free contracting,” their eclipse would pave the way for socialist revolution.

Stanley Engerman and Kenneth Sokoloff have been leaders in renewing interest in institutions and their impact on economic development. The papers in this volume are concerned with human capital in its many dimensions, and bring to fore the role of political, social, and economic institutions in human capital formation and economic growth. The papers address a broad range of issues, from nutrition in pre-modern societies to twentieth-century advances in medical care, from the institutions that concerned workers in the middle and lower ranges of the wage scale to the factors that affected the performance of those who reached the pinnacle in business and art, and from political systems that stifled the advance of literacy to those that promoted public and higher education. Just as human capital has been a key to economic growth, so has the emergence of appropriate institutions been a key to human capital formation. It is this theme that underlies the papers in this volume.

Along with Stan Engerman, Robert Fogel pioneered the use of anthropometric evidence to study economic growth, and helped expand our view of human capital. Formal schooling, apprenticeship programs, specialized job training in the workplace, and learning-by-doing all raise productivity, but other forms of human capital investment are also important. The notion that health and physical size and strength can affect labor productivity is not new, but Fogel has brought these forms of human capital to center stage.

The importance of institutions in economic growth has come to be more fully appreciated in recent years, and schools are widely acknowledged as among the most fundamental of such institutions. Levels of schooling and literacy have been related theoretically as well as empirically to labor productivity, technological change, and rates of commercial and political participation. It is well understood, moreover, that in addition to promoting growth, education institutions can have a powerful influence on the distribution of their benefits through providing avenues for individuals to realize upward mobility. Despite these reasons why the substantial differences in the prevalence of schooling and literacy across countries may have been important contributors to disparities in their patterns of economic growth, we lack a basic understanding of how these differences first emerged and evolved over time.

The New World is ideal for studying investment in schooling and literacy, because many of the societies arising out of European colonization were sufficiently prosperous by the early nineteenth century to support the broad establishment of institutions of primary education. Only a relatively small number, however, made such investments on a scale sufficient to serve the general population before the twentieth century. At a general level, such contrasts in institutional development across the Americas have often been attributed to differences in wealth, national heritage, culture, or religion, but systematic comparative studies are rare.