Thorstein Veblen’s Evolutionary-Institutional Economics. A Revolutionary Agenda at the Turn of the 20th Century

According to the standard story of the rise of institutionalism within American economics, as established from Joseph Dorfman (1969) onwards, the theoretical and methodological corpus of institutionalism must be defined in terms of the contributions of three “founding fathers”: Thorstein B. Veblen, John R. Commons and Wesley C. Mitchell. In recent years, however, Malcom Rutherford’s work has profoundly changed our image of the rise of institutionalism. . Rutherford’s 2011 book,The Institutionalist Movement in American Economics, 1918-1947: Science and Social Control, tells a different story about the role played by Veblen in the development of institutionalism. . By postponing the rise of institutionalism as an identifiable movement to the interwar period, Rutherford documented how Walton Hamilton, John Maurice Clark and Mitchell played the major role in defining and promoting institutionalism. The aim of this essay is to outline Veblen’s institutional-evolutionary research agenda with an emphasis on his philosophical sources in order to discover further clues concerning the dismissal of Veblen’s program within institutionalism. As we shall show, Veblen’s system has its roots in his engagement with the works of Charles Darwin, Immanuel Kant, and William James.