The Social Psychological Underpinnings of Commons's Institutional Economics: The Significance of Dewey's Human Nature and Conflict

Albert, Alexa; Ramstad, Yngve
December 1997
Journal of Economic Issues (Association for Evolutionary Economi;Dec97, Vol. 31 Issue 4, p881
Academic Journal
Economist John R. Commons asserted in the preface to his book "Legal Foundations of Capitalism," that he sought to formulate a volitional conception of market processes to supersede the mechanistic and naturalistic theories forwarded by his predecessors. While it was no doubt clear to all readers of this remarkable work that it had psychological underpinnings unlike those reflected in the writings of previous economic theorists, Commons regrettably failed to make his psychological presumptions explicit. Rectifying this defect and making clear why he deemed it necessary to synthesize psychology into the very core of economics were clearly among Commons's central objectives as he worked out the reformulation of economics presented in his magnum opus, "Institutional Economics." There Commons coined the term negotiational psychology in reference to the mental process that precedes the act of choice. Unfortunately, despite his intentions and even though he succeeded in making clear why he considered it so important to incorporate psychology into the explanatory structure of economics, Commons failed again in "Institutional Economics," to enunciate a direct statement of the psychological framework he associated with his negotiational psychology.


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