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This paper is an initial attempt to discuss the American institutionalist movement as it changed and developed after 1945. Institutionalism in the inter-war period was a relatively coherent movement held together by a set of general methodological, theoretical, and ideological commitments (Rutherford, 2011). Although institutionalism always had its critics, it came under increased attack in the 1940s, and faced challenges from Keynesian economics, a revived neoclassicism, econometrics, and from new methodological approaches derived from various versions of positivism. The institutionalist response to these criticisms, and particularly the criticism that institutionalism “lacked theory,” is to be found in a variety of attempts to redefine institutionalism in new theoretical or methodological terms. Perhaps the most important of these is to be found in Clarence Ayres’ The Theory of Economic Progress (1944), although there were many others. These developments were accompanied by a significant amount of debate, disagreement, and uncertainty over future directions. Some of this is reflected in the early history of The Association for Evolutionary Economics.

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In 1969, Warren Nutter left the University of Virginia Department of Economics to serve as the Assistant Secretary of Defense for International Security Affairs in the Nixon administration. During his time in the Defense Department, Nutter was deeply involved in laying the groundwork for a military coup against the democratically elected president of Chile, Salvador Allende. Although Nutter left the Pentagon several months before the successful 1973 coup, his role in Chile was far more direct than the better-known cases of Friedrich Hayek, Milton Friedman, James Buchanan, and Arnold Harberger. This chapter describes Nutter’s role in Chile policymaking in the Nixon administration. It shows how Nutter’s criticisms of Henry Kissinger are grounded in his economics, and compares and contrasts Nutter with other economists who have been connected to Pinochet’s dictatorship.