Economy as an Institution
Economy as an institution refers to the system of production, distribution, and consumption of goods and services within a society. It encompasses the rules, norms, and organizations that govern economic activities. As an institution, the economy influences and is influenced by social, political, and cultural factors, shaping the overall functioning of a society.
5 Key excerpts on "Economy as an Institution"
eBook - ePub- John Roscoe Turner(Author)
- 2019(Publication Date)
- Routledge(Publisher)
...It must include a consideration of such predatory agencies as the outfit of the robber or the roulette-wheel of the gamester. Economics also studies the most noble and edifying activities of men so far as these are related to the production, maintenance, and utilization of wealth. This science inquires into the cause and effect of different kinds of wealth and of different lines of business. It serves to work into the understanding of men a body of sound principles from which may be deduced practical rules and precepts for the safe guidance of human conduct to the end of social and individual well-being. At the expense of repetition, let It be added that economics Is a human science, and it is broad enough to include all the wealth-getting and wealth-using activities of man in whatever state of organization he may be found. The student must be on his guard once for all against such definitions of this science as would artificially narrow the thought to money price transactions. Buying and selling, and legal or contractual obligations which are effected by the use of money (price transactions) form an essential part, but not the whole of economics. 16. Economic Laws and Social Institutions. We must distinguish natural economic laws from man-made institutions. Scientific principles may determine legislation, but legislation cannot determine scientific principles. Institutions are man-made; they may be created, modified, or destroyed by a majority vote. Institutions may be formed in accord with economic principles that promote wellbeing, and as such serve to the greatest social good. On the other hand, they may be in accord with economic laws and work positive harm. A law only states what will happen under certain conditions; it is not a part of the law to state whether the consequence will be good or bad. The competitive system, which embodies private property and exchange, is an institution...
eBook - ePubFrom Economics Imperialism to Freakonomics
The Shifting Boundaries between Economics and other Social Sciences
- Ben Fine, Dimitris Milonakis(Authors)
- 2009(Publication Date)
- Routledge(Publisher)
...The strength of presence of the new institutional economics is a consequence of the extent, within economics imperialism, to which institutions have themselves become understood as synonymous with anything that is not narrowly and directly economic. In short, the institutional is the antithesis of the market, itself narrowly conceived as supply and demand, and ranges over the formal and informal, from the state through culture to customs and habits. 2 Not surprisingly, then, as revealed in Section 3 of this chapter, with the rise of the new institutional economics, the tensions between economics and sociology at their boundaries have both intensified and been accommodated by a multiplicity of methods and approaches reflecting greater or lesser tolerance to the concerns of neoclassical economics, on the one hand, and modernist, postmodernist, and even post-postmodernist, sociology on the other. Faced with the economic invaders, sociologists responded, with new economic sociology as their answer, even inspiring pre-emptive strikes with the notion that economic functioning cannot be appropriately addressed in the absence of the sociological factors that underpin markets. This is so of the classic work that is perceived to have launched the rise of the new economic sociology, Granovetter’s (1985) argument that markets must be embedded in social networks. The result has been to create chaos around the boundaries between economics and sociology, and hence the definition of the new economic sociology itself. Does the field, for example, signify the rejection of mainstream economics or its acceptance but with refinement through addition of other considerations and methods? Such confusion does not, however, mean that the separate disciplines of economics and sociology have become any less distinct in their core content and practices, and are liable to disintegrate, as seems to be suggested by Hodgson (2007 and 2008)...
eBook - ePubSocio-economics
Toward a New Synthesis
- Amitai Etzioni, Paul R. Lawrence(Authors)
- 2016(Publication Date)
- Routledge(Publisher)
...V The Role of Institutions 13 Competition and Markets An Institutional Perspective M ITCHEL Y. A BOLAFIA AND N ICOLE W OOLSEY B IGGART Economic competition is widely believed to be a critical—even the critical—social process in market societies. From a market perspective, the competitive pursuit of gain by individuals and firms creates exchange conditions that result in allocative efficiency, the greatest good for the greatest number. This utilitarian ideology is the foundation of modern economics and, not coincidentally, of numerous legal and political institutions. Economic utilitarianism even achieves moral embodiment in an esteemed social role, the entrepreneur. Competition and its outcomes approach the status of natural law—an expected, even inevitable product of human interaction. This paper is an attempt to create a framework for understanding economic competition as social action structured by political, economic, and cultural contexts, We propose a conceptualization of competition as an institutionally embedded and socially maintained form of mutual striving. Markets, we argue, are not merely the sum of the buying and selling activities of autonomous competitive individuals. Rather, we understand markets to be social arenas that structure competition according to legitimated organizing principles. Organization is manifest in the voluntary agreement of competitors to renounce certain practices and to abide by others. We will argue against the popular microsocial conceptualization of competition as the unboundedly antagonistic moves of independent actors...
eBook - ePubRules and Choice in Economics
Essays in Constitutional Political Economy
- Viktor J Vanberg(Author)
- 1994(Publication Date)
- Routledge(Publisher)
...First of all, diese theoretical developments are not about one discipline ‘conquering’ others; they are about theoretical integration in the social sciences. They are about showing that, and how the fundamental principles that have guided economics—namely, methodological individualism and the assumption of opportunity-taking behaviour—can be applied to explanatory issues outside of the standard domain of economic inquiry. The historical fact that these theoretical principles have mainly been applied in economics does not mean that there is something specifically ‘economic’ about them. And to advocate these principles does not mean to claim superior status for economics, it means to emphasize the theoretical unity of the social sciences. I find the label ‘economic imperialism’ also misleading in so far as it tends to suggest that the new institutionalism requires theoretical adjustments only on part of other, ‘colonized’ social sciences, while it leaves the theoretical apparatus of economics essentially unchanged. Yet it seems to me that, as the ‘economic perspective’ is systematically applied to the study of rules and institutions, its behavioural theory, its model of man, cannot remain unaffected. Or, to put it in Hans Albert’s terms, it is ultimately not possible to remedy the institutional deficiency of the neo-classical tradition without also rectifying its behavioural deficiency. 20 An adequate theory of rules and institutions cannot really be developed on the basis of a purely formal ‘logic of choice’. It requires a theory of behaviour that has empirical content and that accounts for the element of rule-following in human conduct. When Durkheim said that ‘mores and the prescription of law and morality would be impossible if man were not capable of acquiring habits’ (Durkheim 1978:51), I think he was right, even if I disagree with his methodological conclusions...
- Marc R. Tool(Author)
- 2019(Publication Date)
- Routledge(Publisher)
...“Institutionalism” and “evolutionary economics” are often used interchangeably to indicate the institutionalist’s acceptance of the impermanence of both the present set of economic arrangements and the adequacy of any current set of policy proposals. The values of life enhancement are constant; but in a world dominated by technical, demographic, and social change, institutions and policies can only be characterized as temporary. Institutionalists understand societal life as a continuum, with development and adaptation being its salient characteristics. Therefore the policy maker’s task is to keep abreast of today’s development in order to suggest appropriate policy adaptation for tomorrow. And, of course, tomorrow soon becomes today, with subsequent evolutionary adjustments becoming yet again appropriate. Policy formation is not a task to “completion.” It is a task taken to continual instrumental assessment. Fifth, “in economics as in other sciences we desire knowledge mainly as an instrument of control. Control means the alluring possibility of shaping the evolution of economic life to fit the developing purposes of our race.” 19 The institutionalist economist is an activist economist, optimistic in the idea that human intelligence and the technological continuum generate possibilities for policies that will narrow the gap between existential “is” and warrantable “ought.” Institutionalism is an economics of control—in which the attempt is made to channel the ever-present flux into serviceable channels for humanity. Institutionalist literature is a literature of active involvement, including Ayresian “strategy,” 20 R. G. Tugwell’s “social management,” 21 Gardiner Means’s “administrative economics,” 22 John R. Commons’s “economics of collective action,” 23 Marc R...
