Market dominance and endogenous decline: the contribution of historical analysis

The advances in economic and social history over the past years enabled me to empirically test assumptions about the long-run development of markets. The review by Geoff Hodgson of the resulting book, The Invisible Hand?, is lucid but incomplete. I argue that the rise to dominance of factor markets, followed by that of financial markets, took place already in several early cases, and that all market economies, through an endogenous process, saw the accumulation of wealth and, next, the translation of this wealth into political leverage, creating a feedback loop with negative outcomes which is very hard to break.