Philosophy, Methodology, and Foundations of Institutional Economics
Paper Session
Tuesday, Jan. 5, 2027 1:00 PM - 3:00 PM (EST)
- Chair: Felipe Almeida, Federal University of Paraná
Veblen and Mitchell on Fact/Value Dichotomy
Abstract
The distinction between fact and value—or positive and normative statements—has a long history in economics and philosophy, dating back to Hume's "guillotine" (Blaug, 1980; Katouzian, 1980). However, it remains unsolved among economists (Boumans and Davis, 2016; Malecka, 2025a, 2025b). While traditional economists have claimed its “positive,” objective character (Robbins, 1932; Solow, 1971), dissenting economists have repeatedly rejected this dichotomy (Ayres, 1935; Myrdal, 1955; Schumpeter, 1931; see also Taylor, 1929, 1930). This paper analyzes how Original Institutional Economics (OIE) approached this distinction, drawing evidence from Veblen’s and Mitchell’s works in which an methodological leaning is significant (e.g.Veblen, 1898, 1899a, 1899b, 1900, 1906, 1908, 1919; Mitchell, 1914, 1937, 1940, 1944; and a vast secondary literature). It argues that OIE analyzes economic phenomena objectively without claiming to be value-free. In the institutionalist approach, economic phenomena are embedded in habits of thought and behavior concerned with society's livelihood; thus, value judgments are inevitably intertwined with factual analysis. Specifically, the article discusses: (1) the impossibility of separating facts from values; (2) how economic theories associate with implicit or explicit values; and (3) the (dis)entanglement of value judgments, ideology, and objectivity (Leroux, 2004). By examining Veblen and Mitchell through this axiological lens, the paper offers two original contributions: identifying parallels between original institutionalism and recent literature, and clarifying the notions of objectivity and scientific rigor in these two leading original institutionalists.Gender, Capitalism, and Underdevelopment: Approximations Between Heleieth Saffioti and Feminist Institutionalism
Abstract
This article proposes a cross-fertilization between Women in Class Society, by the Brazilian sociologist Heleieth Saffioti, and feminist institutionalism. It highlights convergences in the analysis of women’s conditions in society. Feminist institutionalism is concerned with analyzing dualisms, emphasizing the centrality of gender in dichotomies such as public/private, and understanding the economic effects of patriarchy and capitalism. Saffioti, by her turn, places capitalism at the center of her analysis by examining women’s condition within this system, she demonstrates how social markers such as race and sex operate in the hierarchical ordering of values, structuring the division between the feminine and the masculine. The article further argues that Saffioti’s emphasis on underdevelopment and dependent capitalism introduces a critical dimension that remains underexplored in original institutionalism: the role of global economic asymmetries in intensifying forms of gender domination. The cross-fertilization developed in this study is constructed without disregarding the distinct theoretical foundations of feminist institutionalism and Saffioti.Price Elasticity Sans Marginal Utility?
Abstract
This paper will explore the possibility of fusing Veblen’s theory of interpersonal “competitive” consumption with Harvey Leibenstein’s “neoclassical” analysis of interpersonal effects on the price elasticity of demand. What will be shown is that Leibenstein’s analysis is in fact much more radical than Leibenstein himself believed tying into earlier assertions by M.I. Tugan-Baranovsky that emulation is the foundation of stable retail prices.Commons and Hansen: Succession of Institutionalism
Abstract
Alvin H. Hansen (1887–1975), widely known as "the American Keynes," is primarily recognized for introducing and disseminating Keynesian economics in the United States. However, a less-examined aspect of his intellectual biography is that he completed his doctoral degree under John R. Commons (1862–1945), a founding figure of American institutional economics. This paper investigates Hansen's economic thought by focusing on his intellectual relationship with Commons, with the aim of shedding light on how the institutionalist tradition was transmitted across the divide of the Second World War. Drawing on Hansen's 1932 commemorative lecture honoring Commons, delivered at the University of Wisconsin–Madison, the paper first examines how Hansen evaluated his mentor's contributions. Notably, Hansen emphasized the theoretical and analytical dimensions of Commons' labor history research, highlighting its treatment of market and price dynamics as a form of dynamic economic theory. This focus is consistent with Hansen's doctoral work on business cycles and suggests a long-standing interest in dynamic economic analysis. The paper then compares the theoretical cores of Commons' institutional economics and Hansen's fiscal Keynesianism. While the two thinkers diverged significantly on the role of fiscal policy—Commons prioritizing the institutional process of policy formation over policy intervention itself, and Hansen advocating active fiscal stabilization—they shared a common intellectual foundation. Both recognized the influence of social customs and institutional relations on price systems and employed the concept of cumulative causation characteristic of institutionalist dynamic theory.JEL Classifications
- B5 - Current Heterodox Approaches
- B0 - General