The Origins and Theoretical Foundation of Original Institutional Economics Reconsidered

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.