Luca Fiorito

Human Nature and Economic Institutions Instinct Psychology, Behaviorism and the Development of American Institutionalism

Recent articles have explored from different perspectives the psychological foundations of American institutionalism from its beginning to the interwar years (Hodgson 1999; Lewin 1996; Rutherford 2000a, 2000b; Asso and Fiorito 2003). Other authors had previously dwelled upon the same topic in their writings on the originsand development of the social sciences in the United States (Curti 1980; Degler 1991; Ross 1991). All have a common starting point: the emergence during the second half of the nineteenth century of instinct-based theories of human agency. Although various thinkers had already acknowledged the role of impulses and proclivities, it was not until Darwins introduction of biological explanations into behavioral analysis that instincts entered the rhetoric of the social sciences in a systematic way (Hodgson 1999; Degler 1991). William James, William McDougall, and C. Lloyd Morgan gave instinct theory its greatest refinement, soon stimulating its adoption by those economists who were looking for a viable alternative to hedonism. At the beginning of the century, early institutionalists like Thorstein Veblen, Robert F. Hoxie, Wesley C. Mitchell, and Carleton Parker employed instinct theory in their analysis of economic behavior. Their attention wasdrawn by the multiple layers of interaction between instinctive motivation and intentional economic behavior. Debates on the role of instinctsin economicswere not confined to the different souls of American Institutionalism, and many more “orthodox†figures, like Irving Fisher or Frank Taussig, actively participated.

John R. Commons, Wesley N. Hohfeld and the Origins of Transactional Economics

This article assesses John R. Commonss adoption of Wesley N. Hohfelds framework of jural opposites and correlatives in order to construct his transactional approach to the study of institutions. Hohfelds influence on Commons, it is argued, was both positive and negative. On the one hand, Commons followed Hohfeld and recognized that such concepts as property and inheritance actually represent an aggregation of numerous types of legal relations. Hohfelds schema provided a powerful rhetorical and analytical tool whereby these highly abstract conceptions could be reduced to a limited number of primary elements. Moreover, Hohfelds schema appeared to be consistent with Commonss general methodological and psychological commitments. On the other hand, Commonss forging of the “transaction” as the elementary unit of economic analysis can be seen as an attempt to go beyond Hohfeld. Commons was in fact unsatisfied with Hohfelds bilateral treatment of jural relations and with his neglect of the role played by state officials in enforcing transactions and, in so doing, in promoting specific individual interests as collective public policies.

Lawrence Kelso Frank's Proto-Ayresian Dichotomy

For institutionalists working in theAyresian tradition, the dichotomy between technology and ceremony is still referred to as a “central analytical tool” (Waller 1982, 757). This dichotomous approach to the study of institutions considers technological advance as the most significant cause of social and institutional change. Peculiar to the institutional framework is an absolute and irreconcilable tension—the dichotomy— between the dynamic and progressive force of technology, and the static and conservative structure of ceremony and institutions. Clarence E. Ayres was the one who most systematically designed the dichotomy and elevated it to the status of paradigm, claiming that technological advances are the only way to undermine and modify the underlying value system within a culture. Accordingly, for Ayres, “deceremonialization, deinstitutionalization, and ‘institutional decomposition’ can occur only if there are advances in science and technology that are so rapid and pervasive that more and more people become increasingly occupied, in

Frank H. Knight, pragmatism, and American institutionalism: A note

Abstract This note deals with the debated question of whether, and to what extent, Frank Knights epistemology was consistent with the general philosophy of American pragmatism. First, in accord with recent interpretations, I provide new evidence illustrating that Knights views on science, knowledge and related philosophical topics present some important similarities with the pragmatic tradition. Second, I attempt to demonstrate that Knights unsympathetic reading of Dewy and pragmatism was, to a relevant extent, a consequence of his aversion to the so-called scientific wing of American interwar institutionalism.

ANTI-SEMITISM AND PROGRESSIVE ERA SOCIAL SCIENCE: THE CASE OF JOHN R. COMMONS

The aim of this article is to look at ideas of social welfare in the English political economy from the 16th to the early 18th Century. In doing so, we shall focus upon the relationship between English Mercantilist economic thought and the evolution of the institutional framework established in order to cope with the problem of poverty and unemployment. In other words, rather than viewing Mercantilism as an “exercise in economic nationalism” we shall inquiry it under the perspective of social policy. Although the most credited assessments of Mercantilism have depicted it as a doctrine which supported a “ruthlessly materialistic ruling class which did not merely neglect but actively exploited the poor”, by placing the emphasis on the role played by the allowance system in the overall strategy of poor relief in England throughout the 17th Century we shall see that during the Mercantilist period social policies were not neglectful of the need of the poor. This reinforced the idea of a social Mercantilism.

When Economics Faces the Economy: John Bates Clark and the 1914 Antitrust Legislation

The aim of this paper is to analyze John Bates Clarks influence in the passing of the Clayton and Federal Trade Commission Acts of 1914. It is argued that Clark was important to the passage of these acts in two ways. First, he exercised an indirect influence by discussing in academic journals and books problems concerning trusts, combinations, and the measures necessary to preserve the working of competitive markets. At least as importantly, Clark took an active role in the reform movement, both contributing to draft proposals for the amendment of existing antitrust legislation and providing help and advice during the Congressional debates that led to the passage of the FTC and Clayton Acts.

Between Progressivism and Institutionalism: Albert Benedict Wolfe on Eugenics

Albeit concerned with the biological element in social evolution, Albert B. Wolfe was among the very few economists of the progressive era who openly expressed his concerns about certain implications of eugenic rhetoric for the social science. Specifically, Wolfe questioned the strong hereditary boundaries that more extreme eugenicists suggested about human beings. As I will attempt to show in paper, a careful examination of Wolfe’s writings reveals that his reaction was rooted in the belief that many of the social problems which eugenicists attributed to hereditary limitations, were actually imputable to the influence that the social, economic, and physical environment exercised on the individuals.

A Scholar in Action in Interwar America: John H. Williams on Trade Theory and Bretton Woods

Interwar economic events were a powerful source of inspiration for those economists who studied the relation between theory and current problems with a view to prescribing original solutions for policy authorities. If we examine the presidential addresses at the annual meetings of the American Economic Association (AEA), we see that the difficulty in reconciling past economic doctrines with the events which were profoundly disturbing the working of the economic system was frequently deplored. Many scholars denounced the inherited corpus of economic theories as inadequate and misleading. Others asked whether the causes of economic maladjustments could exclusively be grouped in the short term of cyclical fluctuations which characterized the transition between equilibrium positions. Still others, more pragmatically, believed that there were major imperfections in economic policies and the institutional framework which needed to be profoundly rethought and redesigned.1

The Other J.M.: John Maurice Clark and the Keynesian Revolution

This paper suggests that Clarks views regarding the Keynesian Revolution illuminate some of the limitations of the Keynesian orthodoxy that developed after the war, bringing more institutional detail and a greater preoccupation with dynamic analysis. Clark developed the multiplier in dynamic terms and coupled it with the accelerator to provide the framework for business cycle theory. His analysis was not formalized and emphasized time lags and non-linearities, similar to Harrod. In addition, Clark was concerned with the inflationary consequences of Keynesian policies and he was dissatisfied with those mechanical interpretations of the income flow analysis, which came to be known as hydraulic Keynesianism. Clarks policy conclusions emphasized the need of balance between employment creation and price stability, and the need of cooperation between social groups.

American institutionalism at Chicago: A documentary note

Abstract This note provides new evidence concerning American institutionalism at Chicago during the 1920s and 1930s.