"Can We Save Veblen and Ayres from Their Saviors? A Response to Professor Klein." (Philip A. Klein)(response to David Hamilton in This Issue, P 1051)
Klein, Philip A., Journal of Economic Issues
One presumes from this title that I have so badly misinterpreted Ayres in my recent essay, "Ayres on Institutions" , that he needs to be "saved" from my dreadful misinterpretations. My purpose in writing the essay was to suggest that in one area, namely his perspective on institutions, Ayres presented a one-sided view.
Certainly, Professor Hamilton says many things with which I (and perhaps most institutionalists) would agree - e.g., "The obsolescence of the institutions is a function of the onward march of the mobilized technology." It is replete with a long discussion of the durability of the role of institutions including many historical examples. While all this is not without interest, I wonder what it is supposed to have to do with me? Am I supposed to be in disagreement with this discussion? (I am not.) If he is corroborating the point I was making about this duality, and he agrees with it, why does he suggest, as in his title, that anyone has to be protected from me?
The point I was making about Ayres's views was based largely on my memory of Ayres in his classes (not so much on possible alternative interpretations of either of his major books [1944; 1961]). In the classroom, I can never remember his speaking of institutions except in pejorative terms. I agree that Ayres (and Veblen, too) were criticizing capitalism because too often "pecuniary activity and ceremonial was primary and technological secondary." I was, however, trying to clarify the dual role that institutions play. I did not use the term "technological institutions," which he says "seems to clutter a theory calling for simplification." I would agree that this term (which I am not sure I have ever heard before) does not clarify the problem.
But institutions do play two roles, and Ayres mostly commented on only one of the roles. The two views of institutions are sometimes referred to as giving rise to either "instrumentally warranted" or "ceremonially warranted" behavior. Institutions that produce "technologically warranted behavior" support technological change and thus provide a stable way to permit societal adaptation to technological progress. Ayres said relatively little about this role. "Ceremonially warranted behavior," on the other hand, thwarts technological progress even as it provides for societal stability. …