Institutionalism between the Wars

By Rutherford, Malcolm | Journal of Economic Issues, June 2000 | Go to article overview

Institutionalism between the Wars


Rutherford, Malcolm, Journal of Economic Issues


Recently, I completed a paper on institutional economics in the 1920s [Rutherford, forthcoming]. That paper is more than 60 pages in length and could easily have been longer. Indeed, most of the comments I received suggested expanding one or more parts of it. To deal with institutionalism over the entire interwar period in any real depth would take up a good part of a book, but this is a conference paper, and the constraints of the form mean that I will have to confine myself to a small number of central points. Some of the material in this presentation is taken from my paper on institutionalism in the 1920s, but I will attempt to expand that discussion along the time dimension while severely compressing the amount of detail provided.

My focus will be on what I consider to have been the defining characteristics of interwar institutionalism. Although I do want to say a few things about later developments that run through the 1940s and beyond, I think it is especially important to get as good an understanding as we can of what institutionalism was during the interwar period because that was when institutionalism developed as a movement and became a force to be reckoned with in American economics. Examining the nature of interwar institutionalism will help us to understand not only why it appealed and grew as a movement, but also what happened later to diminish its popularity. In this way also, institutionalism, as it exists today, can be put in historical context and understood as the outcome of a particular set of circumstances: circumstances that involved not only institutionalism itself, but also American economics and American social science more generally.

The Formation of Institutionalism as a Movement

The conventional view of institutional economics is that it was "founded" by Thorstein Veblen, John R. Commons, and Wesley Mitchell, although with Veblen as perhaps the leading figure. This view of a founding triumvirate, however, did not just instantly spring up with the movement itself, but was a later interpretation of institutional history, a construction, and one I suspect was largely the work of Joseph Dorfman.

The use of the term "institutional economics" seems to have developed between 1916 and 1918. In 1916, Walton Hamilton mentioned that Robert Hoxie had called himself an institutional economist, so the term was in verbal use by then [Hamilton 1916], but it appears to have been restricted to only one or two people. Its first prominent use in the literature of economics occurred in 1918 with Hamilton's AEA conference paper titled "The Institutional Approach to Economic Theory," published in the AEA proceedings in 1919 [Hamilton 1919b]. Hamilton's argument was for an economics focussed on institutions, based on a modern social-psychological foundation, and relevant to problems of policy, or "social control." This conference session also included a paper from J. M. Clark, who argued along related lines [Clark 1919], and was chaired by Walter Stewart, who used the opportunity to urge "the union of the statistical method and the institutional approach" [Stewart 1919]. The idea of there being something that could be called institutional economics took hold; the terms "institutional approach" and "institutional economics were in common use by 1927, and the terms "institutionalism" and "institutionalist" were appearing in print by 1931.

In the period from 1918 through the 1920s, there were a very significant number of articles, addresses, conference sessions, books, and textbooks that promoted this institutional approach within the profession at large and a considerable network of personal contacts between the people most involved. As I have discussed in detail elsewhere [Rutherford, forthcoming], the leaders of this movement were Hamilton, Clark, and Mitchell. A nice example of this can be found in a 1923 letter to Mitchell from Rexford Tugwell, in which Tugwell talks of Mitchell's "institutional economics" and continues: "I believe this is also the general orientation of J. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Institutionalism between the Wars
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.