Hostname: page-component-7479d7b7d-c9gpj Total loading time: 0 Render date: 2024-07-12T15:33:22.999Z Has data issue: false hasContentIssue false
  • English
  • Français

THE ORIGINS AND THEORETICAL FOUNDATION OF ORIGINAL INSTITUTIONAL ECONOMICS RECONSIDERED

Published online by Cambridge University Press:  20 June 2017

Bruce E. Kaufman
Bruce E. Kaufman*
Affiliation:
Department of Economics, Georgia State University; and Centre for Work, Organization and Wellbeing and Department of Employment Relations and Human Resources, Griffith University.
Get access Rights & Permissions [Opens in a new window]

Abstract

John Maurice Clark (1936) described original institutional economics (OIE) as an “elusive movement” and observed, “doubt has arisen whether it has any definable meaning at all” (p. 426). Many subsequent books and articles, with Malcolm Rutherford (2011) being the latest, have addressed this conundrum and sought to identify and describe the animating ideas behind OIE, the people who were the key contributors, and the extent to which they developed a common paradigm vision and theoretical statement. However, widely divergent narratives and non-commensurable interpretations remain. This paper, using a new research strategy, provides another examination of the early OIE story. Rather than beginning with Thorstein Veblen about 1900 (the traditional approach), the paper starts with the founding of OIE in 1918 and examines what the four leading OIE scholars—Walton Hamilton, Clark, Wesley Mitchell, and John Commons—say on OIE’s origins, paradigm vision, and role of Veblen. The conclusions are considerably revisionist.

Type
Articles
Information
Journal of the History of Economic Thought , Volume 39 , Issue 3 , September 2017 , pp. 293 - 322
Copyright
Copyright © The History of Economics Society 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Adams, Henry. 1887. “Relation of the State to Industrial Action.” Publications of the American Economic Association 1 (6): 471–549.Google Scholar
Aspromourgos, Tony. 2009. The Science of Wealth: Adam Smith and the Framing of Economics. London: Routledge.Google Scholar
Biddle, Jeff. 1990. “The Role of Negotiational Psychology in J. R. Commons’s Proposed Reconstruction of Political Economy.” Review of Political Economy 2 (1): 1–25.CrossRefGoogle Scholar
Biddle, Jeff, and Samuels, Warren. 1998. “John R. Commons and the Compatibility of Neoclassical and Institutional Economics.” In Holt, S. and Pressman, R., eds., Economics and Its Discontents: Twentieth Century Dissenting Economists. Northampton: Elgar, pp. 40–55.CrossRefGoogle Scholar
Clark, John Bates. 1886. The Philosophy of Wealth. Boston: Ginn.Google Scholar
Clark, John Bates. 1899. The Distribution of Wealth. New York: Macmillan.Google Scholar
Clark, John Maurice. 1923. Studies in the Economics of Overhead Costs. Chicago: University of Chicago Press.Google Scholar
Clark, John Maurice. 1924. “The Socializing of Theoretical Economics.” In Tugwell, R., ed., The Trend of Economics. New York: Knopf, pp. 73–104.Google Scholar
Clark, John Maurice. 1926. Social Control of Business. Chicago: University of Chicago Press.Google Scholar
Clark, John Maurice. 1936a. “Past Accomplishments and Present Prospects of American Economics.” American Economic Review 26 (March): 1–11.Google Scholar
Clark, John Maurice. 1936b. Preface to Social Economics. New York: Farrar.Google Scholar
Coase, Ronald. 1937. “The Nature of the Firm.” Economica 4 (November): 386–405.CrossRefGoogle Scholar
Coase, Ronald. 1998. “The New Institutional Economics.” American Economic Review 88 (May): 72– 74.Google Scholar
Commons, John. 1893. The Distribution of Wealth. New York: Macmillan.Google Scholar
Commons, John. 1899–1900. “A Sociological View of Sovereignty.” American Journal of Sociology 5 (July–November): 1–15, 155–171, 347–366; (January–May): 544–552, 683–695, 814–825; 6 (July): 67–89.CrossRefGoogle Scholar
Commons, John. 1919. Industrial Goodwill. New York: McGraw.Google Scholar
Commons, John. 1923. “Wage Theories and Wage Policies.” American Economic Review 13 (1): 110– 117.Google Scholar
Commons, John. 1924. The Legal Foundations of Capitalism. New York: Macmillan.Google Scholar
Commons, John. 1934a. Institutional Economics: Its Place in Political Economy. New York: Macmillan.Google Scholar
Commons, John. 1934b. Myself. Madison: University of Wisconsin Press.Google Scholar
Commons, John. 1950. The Economics of Collective Action. Madison: University of Wisconsin Press.Google Scholar
Dorfman, Joseph. 1959. The Economic Mind in American Civilization. Volume 4. New York: Viking.Google Scholar
Dorfman, Joseph. 1963. “The Foundations of Commons’ Economics.” In Commons, J., The Distribution of Wealth. Reprinted edition. New York: Kelly, pp i–xv.Google Scholar
Edgell, Stephen, and Tilman, Rick. 1989. “The Intellectual Antecedents of Thorstein Veblen: A Reappraisal.” Journal of Economic Issues 23 (December): 1003–1026.CrossRefGoogle Scholar
Elsner, Wolfram, Heinrich, Torsten, and Schwart, Henning. 2014. The Microeconomics of Complex Economies: Evolutionary, Institutional, Neoclassical, and Complexity Perspectives. Oxford: Academic Press.Google Scholar
Evensky, Jerry. 2005. Adam Smith’s Moral Philosophy. New York: Cambridge University Press.CrossRefGoogle Scholar
Ely, Richard. 1884. The Past and Present of Political Economy. Baltimore: Johns Hopkins University Studies in Historical and Political Science (March), pp. 143–202.CrossRefGoogle Scholar
Ely, Richard. 1893. Outlines of Economics. New York: Hunt & Eaton.Google Scholar
Ely, Richard. 1914. Property and Contract in Their Relation to the Distribution of Wealth. Volume 1. New York: Macmillan.Google Scholar
Ely, Richard. 1929. “The New Economic World and the New Economics.” The Journal of Land & Public Utility Economics 5 (November): 341–353.CrossRefGoogle Scholar
Ely, Richard. [1931] 2002. The Story of Economics in the United States. “Research in the History of Economic Thought and Methodology” series. Edited by Samuels, W.. New York: JAI.Google Scholar
Ely, Richard. 1932. “Roundtable Conferences: Institutional Economics.” American Economic Review 22 (March): 114–116.Google Scholar
Gruchy, Allan. 1972. Contemporary Economic Thought: The Contribution of Neo-Institutionalist Economics. Clifton: Kelly.Google Scholar
Hamilton, Walton. 1915. “The Development of Hoxie’s Economics.” Journal of Political Economy 24 (November): 855–883.CrossRefGoogle Scholar
Hamilton, Walton. 1917. “Book Reviews.” Annals of the American Academy of Political and Social Science 72 (July): 239–240.CrossRefGoogle Scholar
Hamilton, Walton. 1918a. “The Place of Value Theory in Economics: I.” Journal of Political Economy 26 (March): 217–245.CrossRefGoogle Scholar
Hamilton, Walton. 1918b. “The Place of Value Theory in Economics: II.” Journal of Political Economy 26 (April): 375–407.CrossRefGoogle Scholar
Hamilton, Walton. 1919. “The Institutional Approach to Economic Theory.” American Economic Review 9 (March): 309–318.Google Scholar
Herbst, Jurgen. 1965. The German Historical School in American Scholarship. Ithaca: Cornell University Press.Google Scholar
Hodgson, Geoffrey. 2000. “What Is the Essence of Institutional Economics?” Journal of Economic Issues 34 (June): 317–329.CrossRefGoogle Scholar
Hodgson, Geoffrey. 2001. How Economics Forgot History: The Problem of Historical Specificity in Social Science. London: Routledge.CrossRefGoogle Scholar
Hodgson, Geoffrey. 2004. The Evolution of Institutional Economics. London: Routledge.CrossRefGoogle Scholar
Homan, Paul. 1932. “An Appraisal of Institutional Economics.” American Economic Review 22 (March): 10–17.Google Scholar
Kaufman, Bruce. 1999. “Emotional Arousal as a Source of Bounded Rationality.” Journal of Economic Behavior and Organization 38 (2): 35–44.CrossRefGoogle Scholar
Kaufman, Bruce. 2004. The Global Evolution of Industrial Relations. Geneva: ILO.Google Scholar
Kaufman, Bruce. 2007. “The Impossibility of a Perfectly Competitive Labor Market.” Cambridge Journal of Economics 41 (September): 775–788.CrossRefGoogle Scholar
Kaufman, Bruce. 2008. Managing the Human Factor: The Early Years of Human Resource Management in American Industry. Ithaca: Cornell University Press.Google Scholar
Kaufman, Bruce. 2010. “The Theoretical Foundation of Industrial Relations and Its Implications for Labor Economics and Human Resource Management.” Industrial and Labor Relations Review 64 (1): 817–851.CrossRefGoogle Scholar
Kaufman, Bruce. 2013a. “The Optimal Level of Market Competition: Neoclassical and New Institutional Conclusions Critiqued and Reformulated.” Journal of Economic Issues 42 (September): 639–672.CrossRefGoogle Scholar
Kaufman, Bruce. 2013b. “Sidney and Beatrice Webb’s Institutional Theory of Labor Markets and Wage Determination.” Industrial Relations 52 (July): 765–791.CrossRefGoogle Scholar
Kaufman, Bruce. 2014. “Labor Law Reform in India: Insights from the Tangled Legacy of Sidney and Beatrice Webb.” Indian Journal of Industrial Relations 50 (1): 2–23.Google Scholar
Kaufman, Bruce. 2016. “Adam Smith’s Economics and the Modern Minimum Wage Debate: The Large Distance Separating Kirkcaldy from Chicago.” Journal of Labor Research 37 (1): 29–52.CrossRefGoogle Scholar
Khurana, Rakesh. 2007. From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. Princeton: Princeton University Press.CrossRefGoogle Scholar
Knight, Frank. 1932. “The Newer Economics and the Control of Economic Activity.” Journal of Political Economy 40 (August): 433–476.CrossRefGoogle Scholar
Knight, Frank. 1935. “Review: Institutional Economics: Its Place in Political Economy.” Columbia Law Review 35 (May): 803–805.CrossRefGoogle Scholar
Koopmans, Tjalling. 1947. “Measurement without Theory.” Review of Economics and Statistics 29 (August): 161–172.CrossRefGoogle Scholar
Koot, Gerald. 1987. English Historical Economics, 1870–1926. New York: Cambridge University Press.Google Scholar
Lerner, Max. 1935. “Review: Institutional Economics.” Harvard Law Review 48 (December): 360–365.CrossRefGoogle Scholar
Marshall, Alfred. 1890. Principles of Economics. London: Macmillan.Google Scholar
McCann, Charles. 1986. Order and Control in American Socio-Economic Thought. London: Routledge.Google Scholar
Medema, Steven. 2009. The Hesitant Hand: Taming Self-Interest in the History of Economic Thought. Princeton: Princeton University Press.CrossRefGoogle Scholar
Mitchell, Wesley. 1913. Business Cycles. Berkeley: University of California Press.Google Scholar
Mitchell, Wesley. 1924a. “The Prospects of Economics.” In Tugwell, R., ed., The Trend of Economics. New York: Knopf, pp. 3–37.Google Scholar
Mitchell, Wesley. 1924b. “Commons on the Legal Foundations of Economics.” American Economic Review 14 (June): 240–253.Google Scholar
Mitchell, Wesley. 1935. “Commons on Institutional Economics.” American Economic Review 25 (December): 635–652.Google Scholar
Mitchell, Wesley. 1939. The Backward Art of Spending Money, and Other Essays. New York: McGraw- Hill.Google Scholar
Mitchell, Wesley. 1949. Types of Economic Theory. Two volumes. New York: Kelly.Google Scholar
Nyland, Chris, and Bruce, Kyle. 2001. “Scientific Management, Institutionalism, and Business Stabilization: 1903–1923.” Journal of Economic Issues 35 (December): 955–978.Google Scholar
Pearson, Heath. 1997. Origins of Law and Economics. London: Cambridge University Press.CrossRefGoogle Scholar
Perlman, Mark, and McCann, Charles. 1998. The Pillars of Economic Understanding: Ideas and Traditions. Ann Arbor: University of Michigan Press.CrossRefGoogle Scholar
Polanyi, Karl. 1944. The Great Transformation. New York: Farrar and Rinehart.Google Scholar
Potts, Jason. 2000. The New Evolutionary Microeconomics. Armonk: Elgar.Google Scholar
Rader, Benjamin. 1966. The Academic Mind and Reform: The Influence of Richard T. Ely on American Life. Lexington: University of Kentucky Press.Google Scholar
Ramstad, Yngve. 1989. “‘Reasonable Value’ versus ‘Instrumental Value’: Competing Paradigms in Institutional Economics.” Journal of Economic Issues 23 (September): 761–777.CrossRefGoogle Scholar
Ramstad, Yngve. 2001. “John R. Commons’ Reasonable Value and the Problem of Just Price.” Journal of Economic Issues 35 (June): 253–277.CrossRefGoogle Scholar
Robbins, Lionel. 1932. The Nature and Significance of Economic Science. London: Macmillan.Google Scholar
Roscher, Wilhelm. 1878. Principles of Political Economy. Chicago: Callaghan.Google Scholar
Rosenberg, Nathan. 1960. “Some Institutional Aspects of the Wealth of Nations.” Journal of Political Economy 68 (6): 557–570.CrossRefGoogle Scholar
Ross, Dorothy. 1991. The Origins of American Social Science. New York: Cambridge University Press.Google Scholar
Rothschild, Emma. 1992. “Adam Smith and Conservative Economics.” Economic History Review 45 (1): 74–96.CrossRefGoogle Scholar
Rutherford, Malcolm. 2007. “American Institutionalism and Its British Connections.” European Journal of the History of Economic Thought 14 (June): 291–323.CrossRefGoogle Scholar
Rutherford, Malcolm. 2011. The Institutional Movement in American Economics, 1918–1947. New York: Cambridge University Press.CrossRefGoogle Scholar
Rutherford, Malcolm. 2013. “Warren Samuels, the Journal of Economic Issues, and the Association for Evolutionary Economics.” Research in the History of Economic Thought and Methodology 31A: 61–72.CrossRefGoogle Scholar
Samuels, Warren. 1973. “Adam Smith and the Economy as a System of Power.” Indian Journal of Economics 20 (January–March): 363–381.Google Scholar
Samuels, Warren. 1989. “The Legal-Economic Nexus.” George Washington Law Review 57 (August): 1556–1578.Google Scholar
Samuels, Warren. 1998. “Introduction.” In Samuels, W., ed., The Founding of Institutional Economics. London: Routledge, pp. xi–xii.CrossRefGoogle Scholar
Samuels, Warren. 2000. “Institutional Economics after One Century.” Journal of Economic Issues 34 (June): 3015–3015.CrossRefGoogle Scholar
Samuels, Warren. 2011. Erasing the Invisible Hand. New York: Cambridge University Press.CrossRefGoogle Scholar
Samuelson, Paul. 1976. Economics. Tenth edition. New York: McGraw-Hill.Google Scholar
Schumpeter, Joseph. 1954. History of Economic Analysis. New York: Oxford University Press.Google Scholar
Scott, DR. 1933. “Veblen Not an Institutional Economist.” American Economic Review 23 (June): 274–277.Google Scholar
Smith, Richmond. 1886. “Methods of Investigation in Political Economy.” Science 8 (July 23): 81–87.CrossRefGoogle Scholar
Sismondi, Jean Léonard, Charles. [1819] 1991. New Principles of Political Economy. Translated by Hyse, Richard. New Brunswick: Transaction.Google Scholar
Sobel, Irvin. 1979. “Adam Smith: What Kind of Institutionalist Was He?” Journal of Economic Issues 13 (June): 347–368.CrossRefGoogle Scholar
Tilman, Rick. 1992. Thorstein Veblen and His Critics, 1891–1963. Princeton: Princeton University Press.CrossRefGoogle Scholar
Towne, Henry. 1886. “The Engineer as Economist.” Transactions of the American Society of Mechanical Engineers 7: 428–432.Google Scholar
Veblen, Thorstein. 1898. “Why Is Economics Not an Evolutionary Science?” Quarterly Journal of Economics 12 (July): 373–393.CrossRefGoogle Scholar
Veblen, Thorstein. 1899. The Theory of the Leisure Class. New York: Macmillan.Google Scholar
Veblen, Thorstein. 1904. The Theory of Business Enterprise. New York: Scribners.Google Scholar
Veblen, Thorstein. 1921. The Engineers and the Price System. New York: Huebsch.Google Scholar
Webb, Sidney, and Webb, Beatrice. 1923. The Decay of Capitalist Civilization. London: Fabian Society.Google Scholar
Williamson, Oliver. 1985. The Economic Institutions of Capitalism. New York: Basic Books.Google Scholar
Winter, Sidney. 2014. “The Future of Evolutionary Economics: Can We Break out of the Beachhead?” Journal of Institutional Economics 10 (December): 613–644.CrossRefGoogle Scholar
Yang, Xiaokai. 2001. Economics: New Classical versus Neoclassical Frameworks. London: Blackwell.Google Scholar
Yonay, Yuval. 1998. The Struggle over the Soul of Economics: Institutionalist and Neoclassical Economists in America between the Wars. Princeton: Princeton University Press.CrossRefGoogle Scholar