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Institutions in Heterodox Economics

Paper Session

Sunday, Jan. 3, 2021 12:15 PM - 2:15 PM (EST)

Hosted By: Association for Evolutionary Economics
  • Chair: Tae-Hee Jo, State University of New York-Buffalo

Institutional Analysis in Heterodox Economics

Tae-Hee Jo
,
State University of New York-Buffalo

Abstract

An institutional analysis presumes a shared and clear meaning of institutions. However, even institutional economists in the tradition of Veblen, Commons, and Ayres seem to have a broadly-defined (and often confusing) meaning of institutions. The difficulty of defining institutions and, thereby, of analyzing institutions is due largely to the evolutionary, structural, and ideational nature of institutions. A negative consequence of not having a clear-cut meaning of institutions is that when heterodox economists of various persuasions deal with institutions they often use a vulgar, misleading concept that undermines the institutional analysis as a socio-historical inquiry into the evolving economic system and its components. I argue that institutionalists, among others, should challenge the asocial-ahistorical analysis of institutions. To do so, not only should the meaning of institutions be clarified (vis-à-vis a vulgar notion of institutions), but also institutional analysis needs to be developed as institutions change. This paper explores how institutionalists and other heterodox economists understand and analyze institutions in order to develop a heterodox analysis of capitalism. In doing so, two heterodox approaches—the social structures of accumulation and the capital as power—that are closely related to institutionalism will be examined.

Regulation Theory and Institutions

Lynne Chester
,
University of Sydney

Abstract

The analytical focus of Régulation theory is institutions to elucidate, inter alia, the operation, evolutionary nature and distinctive features of different periods of capitalism, trajectories of growth and the causes of crises. Institutions are also the focal point of analysis for Original Institutional Economics given their pivotal role in structuring social interactions and processes and thus the functioning of the capitalist economy and social provisioning. This paper examines the conceptual and analytical frameworks of these two schools of heterodox economic thought to determine if closer engagement between these schools could advance our understanding of the increasingly complex contemporary provisioning processes of capitalism. In particular, the paper explores the conception of institutions informing Régulation theory and Original Institutional Economics. It is posited that Régulation theory provides ‘institutional insights’, which could be usefully deployed by Original Institutional Economics, despite the lack of definitional clarity of the term ‘institution’ which also pervades many other heterodox schools of thought, and thus hampers theorising and empirical analyses. The paper concludes that greater definitional clarity can be achieved if the social ontology underpinning the conceptualisation of an institution is always rendered explicit. If not, the methodological usefulness of an institution to provide a cogent articulation of the context (totality) and outcomes of social inquiry (and policy prescriptions arising) is reduced, and thus an opportunity lost to provide a powerful alternative that cannot be easily dismissed or ‘reconfigured’ by the mainstream

Exploring Kernels of Institutionalist Thought in Sraffa’s Economic Theory and Archival Material

Scott Carter
,
University of Tulsa

Abstract

The economic theory of Piero Sraffa is highly abstract and theoretical and not usually associated with institutionalist thought. However with the opening of the Sraffa archive many aspects of the relationship Sraffa may have had to various schools of thought can now be explored. This essay explores the importance of various socially-specific conditions and structures on Sraffa’s theory of value and distribution that strictly-speaking may be categorized as “institutions" broadly conceived. Here “institutions” can be seen as determinant mechanisms under whose conditions the model of value and distribution closes “outside” the scope of the analytical core of the theory. Sraffa’s archival material from the 1920s contains notes and references to T. Veblen, J.M. Clark, F.A. Walker, E. Seligman, A. Young, and W.C. Mitchell, among others. In these notes Sraffa mentions “institutions” on several occasions, mostly in reference to the question of the determinants of income distribution generally and that of the wage-rate specifically. In section 44 in Production of Commodities by Means of Commodities, Sraffa mentions that that the rate of profit may be susceptible to being determined by forces outside the system of equations. In his book refence is only given to the rate of interest but in his notes Sraffa mentions specifically the stock market and the banking sector and identifies them as “institutions.” In this essay we explore the question as to whether the “prelude to a critique of economic theory” that Sraffa’s book was intended to provide can include the sustained critique of and developments by the institutionalist school of thought.

Gender and Institutions: Linguistic Categories and Normative Behavior

Ann Davis
,
Marist College

Abstract

There is a rich legacy of institutional economics upon which to draw. This paper will apply the method of historical institutionalism to the topic of gender, focusing on a key term, the related institutions, and associated expertise. That is, gender is a category which can be used to assign to aspects of human biology certain functions which are particular to a certain period, a form of reification. In this way, those institutions can be naturalized, as if they were inherent to biology itself. The category of “gender” is commonly understood to be associated with specific forms of the family, and the assignment of responsibility for child care, as well as certain practices related to sexuality. But there is a large literature on the history of family forms and relation to economic structures, such as capitalism. These gender norms and practices become important in economics when child care becomes “unpaid labor,” and when sexuality is moralized instead of the economy. That is, within Judeo Christian ethics, sexuality is specified and subject to heavy sanctions, while the economy is a morality free zone, implicitly authorizing inequality. This allows the instrumental use of labor to become routine within market economies, while the full power of religious institutions is focused on sex and reproduction, contraception and abortion. Gender inequality is reinforced, and lays a foundation for other types of discriminatory categories to be tolerated among the population. In the search for “equal” rights for women, it is important to consider the overall institutional framework, so that feminism doesn’t simply intensify individual competition in the labor market or contribute to the “global care chain” of exploitative relations for domestic workers, but rather focuses on the provision of public goods like health care, education, and the environment.
JEL Classifications
  • B4 - Economic Methodology