How are the views on evolution of Marxism and Institutionalism related? It depends which institutionalists and which Marxists one is consulting. An "older generation" of institutionalists - such as Wendell Gordon, David Hamilton, Marc Tool, and Walter Neale - have consistently argued that Institutionalism and Marxism are hostile to each other. A "younger generation" of radical institutionalists - such as Doug Brown, William Dugger, Ann Jennings, Ron Phillips, Ron Stanfield, and William Waller - see much in common between Marxism and Institutionalism. (For literature on this division, see Dugger 1989; O'Hara 1995; and Shuklian 1995.)
There is similarly an "older generation" of Marxists - from Kautsky to Stalin and his many followers - who, though they differ violently in many respects, agree on an economic or technological reductionism, a technologically based labor theory of value, and an assessment of people such as the older generation of institutionalists as "bourgeois liberals" or, later, "cold war liberals" (always stated with great disdain). Yet there is also a "younger" generation of radicals or Marxists - such as Sam Bowles, David Gordon, Stephen Resnick, Thomas Weisskopf, and Richard Wolff - who, though they disagree vehemently on many issues, all would reject economic reductionism, reject any simplistic technologically based labor theory of value, and welcome some types of institutional analysis. Thus there was great hostility among the two older generations, while there is cooperation among the younger generation.
"Younger" and "older" are terms relating to the evolution of the discipline and not necessarily to age. Perhaps, a more appropriate terminology for the Marxian dichotomy would be to say that the old Marxism was the official dogma of the Social Democrats until World War I and then of the Soviet Union for its whole life; people were executed for not following Stalin's interpretation of Marx. The new Marxism is a critical method of thought, opposed to any dogma and critical of the establishment in all countries, including those calling themselves socialist.
This article cannot cover all of the areas of criticism of Marxism by the older generation of institutionalists, but rather concentrates on the criticism of Marx's evolutionary theory by Geoffrey Hodgson (1993, 1994).
VEBLEN'S CRITICISMS OF MARXIAN EVOLUTIONARY THEORY
Hodgson follows to some extent the criticisms of Marx by Veblen (1919). At the time Veblen wrote, much of Marx was unpublished and the dominant interpretation was that of the German Social Democrats, full of economic reductionism and Hegelianism, issues discussed below. Veblen often spoke in his essays on Marxism (1919) about "Marx and his followers," so it was the dominant Socialist interpretation that he attacked. The main complaint against Hodgson is that he writes only about the older generation's "official" interpretation of Marx and ignores the contrary interpretation in every instance, even though there has been a very large amount of critique of official dogma by more critical Marxists (see Sherman 1995, Chapter 1, for a sketch of the literature).
Veblen had the highest praise for the totality of Marx's work (1919: 409), but he asserted that Marx's evolutionary theory was Hegelian rather than Darwinian (1919: 413). Veblen argued that materialism is an inverted Hegelianism that sees history determined "inevitably" by impersonal economic forces. Veblen correctly reflects the prevailing German Social Democratic version of Marxism - which is only one interpretation of Marx and not necessarily the correct one. Veblen argues that there is no necessary series of stages, but merely a cumulative causation that leads where it decides to go (see for example, Veblen's two essays analyzing Marx in Veblen, 1919).
Veblen argues against dualism, saying that there is no separate world of ideas that is determined by a separate world of economics, but that the two interact all of the time in one social matrix. …