Economics in the Shadows of Darwin and Marx

Economics in the Shadows of Darwin and Marx

Essays on Institutional and Evolutionary Themes

Geoffrey M. Hodgson

Economics in the Shadows of Darwin and Marx examines the legacies of these two giants of thought for the social sciences in the twenty-first century.

Chapter 8: What are Institutions?

Geoffrey M. Hodgson

Subjects: economics and finance, economic psychology, evolutionary economics, history of economic thought, institutional economics


The proper subject-matter of economic theory is institutions. Walton Hamilton, ‘The Institutional Approach to Economic Theory’ (1919) 8.1 INTRODUCTION The word ‘institution’ has a long history in the social sciences, dating back at least to Giambattista Vico in his Scienza Nuova of 1725.1 Today, in economics, sociology, politics and geography, there has been a revived interest in institutions and in various institutionalist theoretical approaches. A prominent sociological journal has noted ‘the current institutional turn across the social sciences’ (Clemens and Cook, 1999, pp. 443–4) and similar references to an ‘institutional turn’ are found in economic geography (Amin, 1999), political science (Jupille and Caporaso, 1999) and elsewhere. Accordingly, the term ‘institution’ has become widespread in recent years. However, even today, there is no unanimity in the definition of this concept. Furthermore, endless disputes over the definitions of key terms such as ‘institution’ and ‘organization’ have led some writers to give up matters of definition, and to propose getting down to practical matters instead. But it is not possible to carry out any empirical or theoretical analysis of how institutions or organizations work without having an adequate conception of what an institution or an organization is. All empirical inquiry requires a prior and appropriate conceptual framework. I propose that those that give up are too hasty; potentially consensual definitions of these terms are possible, once we overcome a few obstacles and difficulties in the way. It is also important to avoid some biases in the study of institutions, where institutions and...

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