Moral Consequences of Economic Growth: The John R. Commons Lecture, 2006 *

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I feel highly honored to receive this distinguished award from Omicron Delta Epsilon. I feel honored not only because of the fine record of Omicron Delta Epsilon, and the distinguished group of economists whom the society has recognized in this way in the past, but I am particularly pleased to receive an award in memory of John R. Commons, whom I consider a deeply sympathetic figure in several significant ways.

John R. Commons' interests ranged well beyond economics. One of his early books--published, incidently, by what was then called simply the Bureau of Economic Research (not yet the National Bureau)--was titled Representative Democracy; it was about the theory of government, and it offered detailed proposals for restructuring voting as well as other mechanics of how representative democracies should work. Another of Professor Commons' early books was Social Reform and the Church; in it he paralleled the interests and backgrounds of an earlier generation of scholars, the founders of the American Economic Association including such figures as John Bates Clark, Richard T. Ely and Simon Patten, all three of whom emerged out of America's Social Gospel tradition (a movement that, in a way that is little remarked on today, had a very important influence not just on the early days of the A.E.A. but on the development of economic thinking more generally in the latter decades of the nineteenth century).

John R. Commons also had his roots in a conception of economics as a form of natural science. He is best known today, of course, as the principal architect of what was then called "institutional economics," a branch of our discipline that is being revived today in the work, for example, of my Harvard colleague Andrei Shleifer as well as of Daron Acemoglu at MIT. The very first sentence of Professor Commons' 1934 textbook, Institutional Economics--a work of his mature years, published when he was 72 years of age--read, "This book is modeled upon textbooks in the natural sciences." But he immediately went on to make clear that the intellectual origins of his work were actually historical, and that they drew on the experience not just of the United States but of Europe as well: "Since I base my analysis on the Anglo-American common law, I begin with the English Revolution of 1689; then follows the World War of the French Revolution 1789"--an interesting way to describe the French Revolution--"then the American Revolution of 1861, an outcome of the suppressed European Revolution of 1848...." (Commons was born during the Civil War, and like many of his generation he thought of the true American Revolution as the war that began in 1861, not the one that began in 1775). He went on to list what he called "the War of a Dozen Revolutions beginning in 1914," and then to refer to "the revolutionary cycle of which we [he meant the world of the of the 1920's and 30s] are now a part."

The principal focus of Professor Commons' work, however, was squarely on economics, and in particular the role of economic relations in a society. His work was not about atomistic agents making economic decisions in an individual capacity. His description of the field he helped to create emphasized that "Institutional economics ... gives to collective action its proper place of deciding conflicts and maintaining order in a world of scarcity, private property and the resulting conflicts." He went on to say, "out of scarcity derives not only conflicts but the collective action that sets up order on account of mutual dependence." Political theorists would immediately recognize the central influence of such figures as Hobbes and Locke, and Americanists will likewise see the echo of Tocqueville. Economists today would, I hope, see the subsequent links to key figures in our own profession like Albert Hirschman.

Finally, John R. Commons had a keen sense of the connections between positive economics and the realm of normative thinking that also encompasses our ethical and moral concerns. …