Informal institutions are the voluntary social arrangements established between households that are used to solve problems that they cannot resolve on their own. Examples from seven ancient and premodern societies are used to illustrate the operation of informal institutions to mobilize labor, establish and maintain interhousehold social networks, obtain spouses, construct intergroup trade networks, and supply emergency support to avoid household failure.

Many past institutions were supported by forms of direct production, that is, by producing the resources that they required, instead of drawing resources from the individuals they were intended to serve. The way that systems of direct production were structured varied from society to society. Examples for direct production are examined from Sumeria, China, the Inka, Aztec Mexico, medieval Europe, Persia, and the 19th-century religious community of Zoar, Ohio.

Merchants were an important feature of the ancient commercial landscape. This chapter examines the merchant’s dilemma, the conditions that gave rise to their appearance, and the way that merchants operated in the ancient world. Structures of operation discussed include commenda partnerships, diaspora communities, and the role merchants played in the development of the putting-out system of managed production. Examples discussed include tribal merchants in New Guinea and South India as well as merchants in the state-level societies of Bronze Age Assur and Aztec Mexico.

After September 1992, there remained considerable uncertainty about the longer-term possibility of the UK eventually joining the Eurozone, a prospect that few liked, but equally almost no policy-maker wanted to rule out definitively. There thus remained a substantial ambiguity in the question of the UK’s relation to the giant monetary experiment of the European Union. The Bank started to think about exporting its new policy framework, based on an inflation target, as a superior model, also for European monetary management.

This introductory chapter outlines the transformation or modernization of the Bank of England in the twenty years after 1979: how governance and accountability were transformed, and communication was accorded a greater role, as the Bank moved to policy autonomy or operational independence from the UK government. The process amounted to what might be described as an informational revolution. The transformation of macro-economic management may also be considered as part of a broader process of globalization. Central banks everywhere became much more aware of international activities and developments, and policy-makers reflected more on how the UK was affected by what went on beyond its frontiers. There was also a greater legalization: a need for legislation to define what was involved in banking, and how to regulate banking. Finally, the nature and definition of money and of monetary stability became the subject of a political debate.

After September 1992, the Bank was at the forefront of the search for a new policy framework. It pushed the idea of central bank independence, that was heavily supported by academic theory, as well as by the framework established in 1991 at the Treaty of Maastricht. The reform was driven by the new Governor, Eddie George, but also by Chief Economist Mervyn King. The Bank also defined its mission in terms of three core purposes, monetary stability, financial stability, but also the promotion of the efficiency and effectiveness of the UK financial services sector; and reformed its administrative organization – a move that was highly unpopular with its staff. The key to the new policy was an inflation target, established by the government, and implemented through regular meetings of the Chancellor of the Exchequer (at that time Kenneth Clarke) and the Governor of the Bank. These attracted considerable publicity, and were known as the Ken and Eddie show: it was often thought to be an exercise in which a hawkish Governor pressed for interest rate rises, which a doveish and politically sensitive Chancellor resisted.

Marketplaces were the lifeblood of household provisioning and occurred in many state and stateless societies throughout the ancient and premodern past. This chapter examines the nature of market exchange, the different types of marketplaces documented in societies of different scale, and the factors involved in their origin. Case studies are discussed from multiple state and stateless societies around the world.