Summary and Info
The economics profession is under attack, both externally and internally. For all of it's protestations of being "scientific" it seems to have failed miserably if it's task is to illuminate the workings of the economic system. Economics and meteorology share a similar degree of contempt and disdain as forecasts are widely off the mark and no-one appears to hold any of the practitioners accountable.
The science of economics is seen as remote and disappearing up itself as it becomes more and more abstract and formalistic and divorced from the day to day reality that those of us in the world have to face.
Heretics have abounded for years but it is only in recent years that the temple of economics appears to be in danger of collapse from internal subsidence.
One of the biggest critics has taken the form of a rsurgence of interest in thei ideas of the Institutionalists of whom Thorstein veblen was a major proponent. Characteristically these ideas have combined with more modern analysis and led to the emergence of evolutionary economics. In this volume some of the major theoretical building blocks are examined and their relevance to the current situation established. Crucially their work is placed within a dichotomy of Marxist and Hayekian thought allowing the validity of evolutionary ideas to be established through critical analysis of the two diametrically opposing viewpoints.
This is a very important book, not only for bringing the ideas of the evolutionary economists to a wider audience, but also for those of the other traditions to examine the central tenets of their own theories and see how they hold up to the crticisms levelled against them.
For my own part I am intrigued with the notion of institutions themselves and their establishment as a type of embodied knowledge gained through repeated transactions resulting in a mechanism for reducing transactions costs for future exchange participants. While Hodgson et al have a different interpretation, I am not convinced that their position automatically excludes the notion of institutions created through the establishment of a spontaneous order.
However, I digress. This is a very powerful book which ought to be causing severe shockwaves in the economics establishment such that the high priests of the movement should be considering their positions. I would highly recommend careful study of this book and other works of this movement, but with scepticism.
More About the Author
Geoffrey Martin Hodgson (born 28 July 1946) is a Research Professor of Business Studies in the University of Hertfordshire, and also the editor-in-chief of the Journal of Institutional Economics.