Malcolm Rutherford is Professor at the University of Victoria, Canada. He is the world wide, universe wide, authority on the history of American Institutionalism. He is also one of my favorite historians of anything as he writes rigorous and engaging, archive based social history of ideas. (lots of attributes) I emailed him three questions.
1. Why is the history of American institutional economics interesting?
It is interesting for several reasons. It was (is) the most substantial and longest lasting non “orthodox” tradition in American economics. In terms of American academic economics, much more substantial than Marxism or historicism. Apart from its own intrinsic interest in its attempt to explicitly incorporate institutions in economics, it is interesting because: 1) its history tells us a vast amount about the way in which academic economics has evolved and changed in the US.; and 2) because its relative decline in the post World War II period tells us a lot about how and why neoclassical economics rose to ascendency.
2. What is the thing that scholars in HET get most wrong about the history of institutional economics?
A couple of things. Institutionalism is still over-identified with Veblen and with his attempt to build an evolutionary theory. Institutionalists such as Hoxie and Mitchell gave up on that aspect of Veblen’s thinking fairly quickly. What institutionalism as a movement was really about was an empirical view of science and the ideal of “social control.” When you look at the institutionalist literature in detail the rhetoric of “science” and “social control” is overwhelming. Science, for institutionalists, meant a critical investigation of the actual functioning of economic institutions. Social control meant finding methods to control economic activity to supplement the market. These methods could involve government regulation or planning, but could also involve novel forms of enterprise with different structures of incentives from the usual corporate form. Perhaps because of the over-identification with Veblen, it is still not properly appreciated just how “mainstream” institutional economics was in the 1920s and 30s, but institutionalists such as Mitchell and J. M. Clark were entirely a part of the establishment of economics.
3. What insights can we expect from your own and from others’ research in the near future?
Well, I can’t really speak for others, but I am working on a book that will pull together the past 12 or so years of my research on the institutionalist movement. It will be called “Science and Social Control: The Institutionalist Movement in American Economics, 1918-1945. Look for it at Amazon sometime next year!!