Institutionalist Methodology and Social Economics

In 1978, Lewis Hill, in an instructive article in the Review of Social Economy, persuasively demonstrated that “the goals and objectives of social economies are completely compatible with the philosophy and methodology of institutionalism”. Consequently, he concludes, “both schools of economic thought could be strengthened by a synthesis which would merge the goals and objectives of social economics with the pragmatic philosophy and methodology of institutional economics”. Hill arrived at this conclusion by first summarising the goals and objectives of social economics and by distilling the work of Thorstein B. Veblen, John R. Commons, Wesley Clair Mitchell and Clarence E. Ayres, thereby setting forth the philosophy and methodology of institutional economics. Noting that the “four founding fathers of institutionalism constitute an extremely diverse group of scholars”, he observed that “the only feature which ties them together…was their common acceptance of pragmatism as the philosophical basis of their economic thought”. He then identified seven aspects of the effects of pragmatism on the philosophical foundation of institutionalism. He also described five characteristics that set social economists apart.