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³ Regarding self-regulation, see Mullineux, A. W., Business Cycles and Financial Crises (Hemel Hempstead, U.K., 1990).Google Scholar See also Hansen, Per H., “Bank Regulation in Denmark from 1880 to World War II: Public Interests or Private Interests?” in Business History 43 (Jan. 2001): 43–68CrossRefGoogle Scholar, for the relation between crises and regulation. For the relation of the Kreuger crash to SEC regulation in 1934, see Flesher, D. and Flesher, T., “Ivar Kreuger's Contribution to U.S. Financial Reporting,” Accounting Review 61, no. 3 (July 1986), 421–34.Google Scholar

⁴ For two classic articles, see Stigler, G. J., “The Theory of Economic Regulation,” in Bell Journal of Economics and Management Science.2 (1971): 3–21CrossRefGoogle Scholar; and Posner, R. A., “Theories of Economic Regulation,” in Bell Journal of Economics and Management Science 5, no. 2, (1974): 335–58.CrossRefGoogle Scholar

⁵ Kindleberger and Aliber, in Manias, Panics and Crashes, 115–16, maintain that it was a bubble, while Garber, Peter, in Famous First Bubbles: The Fundamentals of Early Manias (Cambridge, U.K., 2000)Google Scholar, and Thompson, Earl A., “The Tulipmania: Fact or Artifact,” Public Choice 130, nos. 1–2 (2006): 99–114CrossRefGoogle Scholar, argue that there was no bubble. In his article, Thompson claimed that regulatory changes led to the dramatic decline in the price of tulip bulbs, which constituted a rational response to the changes. A different, microhistorical, perspective, is taken by Goldgar, Anne, in Tulipmania: Money, Honor and Knowledge in the Dutch Golden Age (Chicago, 2007), 18.CrossRefGoogle Scholar

⁶ See, for instance, Cohen, Patricia, “Ivory Tower Unswayed by Crashing Economy,” New York Times, 5 Mar. 2009Google Scholar; and, more generally, Galbraith, John Kenneth, Economics in Perspective: A Critical History (Boston, 1987).Google Scholar

⁷ The point could be made that the instability that followed was a direct cause of the managed economies, but, to my knowledge, such causality has not been demonstrated. Rather, it could be argued that the high and stable growth of this period was the result of a unique combination of a number of factors. See, for instance, Reich, Robert, Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (New York, 2007), 15–49Google Scholar; and Eichengreen, Barry, The European Economy since 1945: Coordinated Capitalism and Beyond, (Princeton, 2007).Google Scholar

⁸ Vernon, R., “International Investment and International Trade in the Product Cycle,” Quarterly Journal of Economics 2 (1966): 190–207CrossRefGoogle Scholar; and Schumpeter, Joseph A., “The Process of Creative Destruction,” in Schumpeter, , Capitalism, Socialism and Democracy (New York, 1942), 81–86.Google Scholar

⁹ For popular delusions, see the classic by MacKay, Charles, Extraordinary Popular Delusions and the Madness of Crowds (New York, 1980Google Scholar; originally published in 1841). For the Charles Ponzi scheme, see Zuckoff, Mitchell, Ponzi's Scheme: The True Story of a Financial Legend (New York, 2005).Google Scholar

¹⁰ See, for instance, Smith, Roy C. and Walter, Ingo, “Four Years after Enron: Assessing the Financial-Market Regulatory Cleanup,” Independent Review 11 (Summer 2006): 53–66.Google Scholar

¹¹ The disciplines of behavioral economics and behavioral finance are gaining ground. See, for instance, Ariely, Dan, Predictably Irrational: The Hidden Forces that Shape Our Decisions (New York, 2008)Google Scholar; and Akerlof, George A. and Shiller, Robert J., Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism (Princeton, 2009).Google Scholar

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¹³ This topic is discussed by Coffee, J. C. Jr. in “A Theory of Corporate Scandals: Why the USA and Europe Differ,” Oxford Review of Economic Policy 21, no.2 (2005): 198–211.CrossRefGoogle Scholar Coffee argues that the issue of different corporate governance systems is important. For business systems, see Whitley, Richard, “Dominant Forms of Economic Organization in Market Economies,” in Organization Studies 15, no. 2 (1994): 153–82.CrossRefGoogle Scholar

¹⁴ One such study, prepared from a behavioral finance perspective, is by Lai, L., “The Norwegian Banking Crisis: Managerial Escalation of Decline and Crisis,” Scandinavian Journal of Management 10, no. 4 (1994): 397–408.CrossRefGoogle Scholar For an instructive discussion of behavioral finance, see Bondt, Verner de, “Bubble Psychology,” in Hunter, William C., Kaufman, George G., and Pomerleano, Michael, eds., Asset Price Bubbles: The Implications for Monetary, Regulatory, and International Policies (Cambridge, Mass., 2003), 205–16.Google Scholar There is also an enormous literature on individual firm failures, such as, for instance, on Enron: Eichenwald, Kurt, Conspiracy of Fools: A True Story (New York, 2005)Google Scholar; and on Long Term Capital Management: Lowenstein, R., When Genius Failed: The Rise and Fall of Long Term Capital Management (New York, 2001).Google Scholar Although many books on failure are of high quality, they have not been written by business historians. In the interwar period, the Kreuger scandal in 1932 was the most important, and the literature on that scandal is abundant and growing. See, for instance, Shaplen, R., Ivar Kreuger: Genius and Swindler (1960); and the excellent Harvard Business School case by Geoffrey Jones and Ingrid Vargas, “Ivar Kreuger and the Swedish Match Empire,” Harvard Business School case 804–078.Google Scholar

¹⁵ For the institutional framework, see North, Douglass C., “Institutions and the Performance of Economies Over Time,” in Menard, Claude and Shirley, Mary M., Handbook of New Institutional Economics (Dordrecht, 2005), 21–30.CrossRefGoogle Scholar For some important recent work on the incentive structure and how it may lead to excessive risk taking, see Smith, Roy C. and Ingo, Walter, “Four Years After Enron: Assessing the Financial-Market Regulatory Cleanup,” Independent Review 11 (Summer 2006): 53–66Google Scholar; Smith, Roy, and Ingo, Walter, Governing the Modern Corporation: Capital Markets, Corporate Control, and Economic Performance (Oxford, 2006), ch. 11, 270–92CrossRefGoogle Scholar; and McKenna, Chris, The World's Newest Profession: Management Consulting in the Twentieth Century (Cambridge, U.K., 2006), ch. 9, 216–44.CrossRefGoogle Scholar For social and cultural perspectives on failure, see, for instance, Sandage, Scott A., Born Losers: A History of Failure in America (Cambridge, Mass., 2005)CrossRefGoogle Scholar; and Mihm, Stephen, A Nation of Counterfeiters: Capitalists, Con Men and the Making of the United States (Cambridge, Mass., 2007).CrossRefGoogle Scholar

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¹⁷ Granovetter, Mark, “Economic Action and Social Structure: The Problem of Embeddedness,” American Journal of Sociology 91 (Nov. 1985): 481–510.CrossRefGoogle Scholar

¹⁸ This question is addressed directly by Naomi Lamoreaux in this issue.

¹⁹ See, for instance, Dore, R., “Financialization of the Global Economy,” in Industrial and Corporate Change 17, no. 6, (2008): 1097–112.CrossRefGoogle Scholar See also, Wade, R., “Financial Regime Change?” New Left Review 53 (Sept.-Oct. 2008): 5–21.Google Scholar

²⁰ Regarding this point, it is worth noting that organizational failure is a multidimensional concept. Failure is a social construction, and its meaning depends on one's perspective. See Anheier, Helmut K. and Moulton, Lynne, “Studying Organizational Failures,” in Anheier, Helmuth K., ed., When Things Go Wrong: Organizational Failures and Breakdowns (London, 1999), 273–90.CrossRefGoogle Scholar

²¹ See the presidential address by Patrick Fridenson to the 2004 annual meeting of the Business History Conference: Fridenson, Patrick, “Business Failure and the Agenda of Business History,” Enterprise & Society 5, no. 4 (2004): 562–82.CrossRefGoogle Scholar