New Institutional Economics (NIE) has been celebrated as a path-breaking approach to the understanding of capitalism. This article advances a conceptual critique of NIE approaches to economic history. The author suggests that NIE cannot solve the underlying tension, that its economics remains ahistorical, and that when history, social relations and realism are invoked, the economics disappears, being replaced by various cultural and state-centred explanations. Therefore NIE is not so much a research programme in progress, but rather an indication of the degeneration of the tools of neo-classical economics.