INSTITUTIONALISM |Tenets | Institutionalist School | |Resources || | Home | Intro | Writings | biography | thoughts | contemporaries | institutionalism | |
"The institution (habit of thought) of ownership or property is a conventional fact; and the logic of pecuniary thinking - that is to say, of thinking on matters of ownership - is a working out of the implications of this postulate, this concept of ownership or property. The characteristic habits of thought given by such work are habits of recourse to conventional grounds of finality or validity, to anthropomorphism, to explanations of phenomena in terms of human relation, discretion, authenticity, and choice. The final ground of certainty in inquiries on this natural-rights plane is always a ground of authenticity, of precedent, or accepted decision. ... The end of such reasoning is the interpretation of new facts in terms of accredited precedents, rather than a revision of the knowledge drawn from past experience in the matter-of-fact light of new phenomena. The endeavor is to make facts conform to law, not to make the law or general rule conform to facts. The bent so given favors the acceptance of the general, abstract, custom-made rule as something real with a reality superior to the reality of impersonal, non-conventional facts. Such training gives reach and subtlety in metaphysical argument and in what is known as the "practical" management of affairs; it gives executive or administrative efficiency, so-called, as distinguished from mechanical work. "Practical" efficiency means the ability to turn facts to account for the purposes of the accepted conventions, to give a large effect to the situation in terms of the pecuniary conventions in force."
THORSTEIN VEBLEN, in: 'Theory Of Business Enterprise', 1904, chap. 9.
INSTITUTIONALISM |Tenets | Institutionalist School | |Resources |
Tenets of Institutionalism
Source: Association For Evolutionary Economics
Basic convictions of the evolutionary institutionalism:
Source: Atkins, W.E. "Comment." American Economic Review (Supplement), vol. 22 (1932), pp. 111-112.
The American Institutionalist School.
The American Institutionalist School, commonly associated with Thorstein Veblen, John Commons and Wesley Mitchell, was for a brief period effectively the orthodoxy in the United States, between 1888 and the end of the 1920s.
The Institutionalist school developed in the late 1880s in the United States and was heavily influenced by the German Historical School and the English Historicists. In the beginning, they did not shy away from direct confrontation with Classical and then Neoclassical economics, although their real targets were the plethora of apologists that dominated the American scene. Deploring the universalist pretensions of much of economic theory, the Institutionalists stressed the importance of historical, social and institutional factors which make so-called economic "laws", contingent on these factors. Much of everything in the economic world, they argued, was not immutable but rather conditioned by the influence of an always changing history - whether acting on the individual directly, or indirectly through the institutions and society which surround him.
Their success was ephemeral. The methodological battle between Richard T. Ely and Simon Newcomb had robbed the Institutionalists of their early strongholds, the Johns Hopkins University and the American Economic Association (AEA). The growing sway of the Marginalist Revolution over American academia - particularly at the hands of I. Fisher at Yale, Taussig at Harvard and Knight at Chicago, gnawed further away at the Institutionalists' position.
By the1920s, few schools remained in Institutionalist hands - Columbia under Wesley Mitchell and Wisconsin under John Commons and other smaller departments like the New School and the University of Texas. Cornell could also be included if one considered the more theoretical American Psychological School of Frank A. Fetter and Herbert Davenport and Frank H. Knight, which combined the work of Veblen with that of Austrians, to be an offshoot of American Institutionalism.
During this time, they withdrew from confrontation with the Neoclassical mainstream by concentrating on what became one of their major legacies: the empirical measurement of business cycles and the compilation of records of economic history. Wesley C. Mitchell founded the National Bureau of Economic Research (NBER) for precisely that purpose and, under his leadership, many economists concentrated on these laborious tasks - leaving us a quantitative legacy which lasts to this day. However, even this apparently innocuous task led to another confrontation: an empirical Methodenstreit - only now with Koopmans and the Cowles Commission econometricians.
A mighty blow was delivered by the Keynesian Revolution which rendered their role as heterodox critics of the Neoclassical orthodoxy partly superfluous. Nonetheless, for many years, the dissenting voices of John Kenneth Galbraith and Robert L. Heilbroner maintained the old school alive.
Early American Institutionalists
The American Institutionalist School
|
Business Cycle Institutionalists
Modern American Institutionalists
|
Some Resources on American Institutionalism.