Academic journal article Journal of Economic Issues

Institutional Economics, Instrumentalist Political Theory, and the American Tradition of Empirical Collectivism

Academic journal article Journal of Economic Issues

Institutional Economics, Instrumentalist Political Theory, and the American Tradition of Empirical Collectivism

Article excerpt

The political counterpart of institutional economics is, no doubt, the instrumentalist political theory of John Dewey, and the recent literature on him is huge. [1] Indeed, the influence of Dewey and his followers' thought on institutional economists is undeniable. [2] Yet important aspects of it remain unexplored and unrelated to present concerns. It is my contention that with certain qualifications and modifications it and another closely related interpretation of our political tradition provide considerable insight into the political meaning of institutionalism. This interpretation was originally provided by Currin V. Shields (1952), then a political scientist at UCLA, who viewed the history of our political thought and practice through the lens of what he called the "American tradition of empirical collectivism." [3] Thus instrumentalist political theory and empirical collectivism are treated here as two facets of the paradigm of evolutionary economics.

According to Shields, the tradition is a political theory, a heuristic device, and a historical perspective on American political thought and behavior that extends back to the first English settlements in the New World. He stated that there are three principles specifying an "order of preferences to be observed in undertaking collective action" (106):

1. Employed to solve only bona fide public problems.

2. Undertaken by the agent of the community best able to dispose of the problems.

3. Involve minimal interference in the life of the community.

Shields also argued that "the empirical collectivist never propounds a pat formula for collective action; he is wedded to no doctrinaire analysis of political history or human behavior; he is hobbled by no preconceptions about political problems or their solution." Yet there appear to be some powerful "preconceptions" about political theory and political action in the claim that collective action should (1) be employed to solve only bona fide public problems, (2) be undertaken by the agent of the community, that is, level of government, best able to dispose of the problem, and (3) involve minimal interference in the life of the community, that is, avoid tearing or rending its social fabric. Why, then, is it claimed that the American tradition of empirical collectivism is without presuppositions? Perhaps what Shields meant was that empirical collectivism is not "unduly burdened" by preconceptions about political problems or their solution.

The literature on the political theory of institutional economics nowhere situates it in a specific political culture which possesses adequate historical continuity. Typically, the main decisional rules of the American polity are not explicitly outlined, and its cultural mores as regards institutional change are not overtly stated. However, many institutionalists focus on the size and scope of government, the level of government selected as a tool for amelioration, and the malleability as well as the fragility of the social fabric of the community when analyzing public policy. This means they are within the tradition of empirical collectivism in their respect for the three principles for problem resolution that it endorses even though they may not be consciously aware of the theoretical structure of the venerable tradition itself.

The purpose of this article is thus to situate institutional economics and economists in a specific political culture which possesses historical continuity and contemporary policy relevance. Essentially, this means to place it in the American tradition of empirical collectivism. As outlined, however, this tradition has several frailties which need to be corrected and, in any case, it needs to be updated. Criteria must be added which help (1) make the distinction between what is public and what is individual, (2) choose the most effective instrument of change from among federal, state, and local government, and (3) designate ameliorative policies which will not rend or tear the social fabric of the community. …

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