Here's Robert Solow defending institutional economics:

Clark's pessimism about closing the gap between the successful and less successful economies may derive from the belief that nothing much can change unless and until the mercantile and industrial virtues seep down into a large part of the population, as he thinks they did in preindustrial England. That could be a long wait. If that is his basic belief, it would seem to be roundly contradicted by the extraordinary sustained growth of China and, a bit more recently, India. Embarrassingly for Clark, both of those success stories seem to have been set off by institutional changes, in particular moves away from centralized control and toward an open-market economy.

http://blogs.ft.com/crookblog/2007/11/solow-on-clark.html

Bryan Caplan's series of reviews / posts in response are well worth the read:

http://econlog.econlib.org/archives/2007/09/a_farewell_to_a.html

Agreed!

vimothy,

I wonder how far Clark actually goes in his anti-institutionalist bent. He mentions Communism in passing as economically backwards, so clearly he has some view of its importance.

I took the book as an argument for the view that individual differences combined with economic system explain much of the variation in national wealth.

He actually accuses the economics profession of peddling un-provable idiocies, myths that institutions affect growth.

For instance, have a look at this conversation between Clark and James Robinson of Harvard.

Clark: Jim's statement is a spirited summary of economists' beliefs, but not an appeal to any compelling facts. It is a statement of faith, a Nicene Creed. It shows the yearning, the longing, of economists for eventual salvation through institutions. The facts, however, are that the Industrial Revolution was the result of cultural changes in England, not better incentives. By 1800 in successful economies people had embraced “thrift, prudence, negotiation, and hard work.” In most failed economies it is the failure of people to embrace these bourgeois values that explains economic failure.

http://online.wsj.com/article/SB119135743412446729.html

Agreed on the criticisms. While Clark doesn't appear to be an evolutionary psychologist, his perspective is very close to the Tooby/Cosmides “Psychological Foundations of Culture” line. In other words, he apparently views culture as merely a product of psychology, so therefore institutions are the result of psychology, and not a cause.

[1] http://www.tdaxp.com/archive/2007/12/31/guns-genomes-and-steel.html

Are you familiar with Michael Shermer? He works along similar vectors, but is less anti-economics and doesn't rely on such a contentious reading of Malthus. There's a good recording of a recent talk at Cato on their website here:

http://www.cato.org/event.php?eventid=4297

“The place to begin is the beliefs held by the members of society, because it is the beliefs which translate into the institutions which shape performance. Shared mental models reflecting a common belief system will translate into a set of institutions broadly conceived to be legitimate.”