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John Commons's organizational theory of institutions: a discussion

Published online by Cambridge University Press:  28 September 2011

BERNARD CHAVANCE
BERNARD CHAVANCE*
Affiliation:
Département d'Économie, LADYSS, Université Paris Diderot, UFR GHSS, 59 rue Nationale, 75013 Paris, France
*
*Email: [email protected]
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Abstract:

The paper discusses John R. Commons's original theory of institutions, where the latter are defined as going concerns and their working rules, or collective action restraining and expanding individual action. Such organizational approach of institutions makes important contributions to institutional economics in general, through its notion of a hierarchy of collective action, its threefold typology of transactions, and its holindividualist stance. Commons's genuine advances are counterbalanced by theoretical limits, which illustrate the unfinished character of his attempt to make a contribution to a ‘rounded-out theory of Political economy’, e.g. the ambiguous place of markets in his theory, the state understood as a model for other going concerns and, distinctly, the restricted definition of institutions as organizations. In some important respects, his theory complements or goes further than other currents of institutional economics; its weak points are sometimes the reverse side of his very contributions.

Type
Research Article
Information
Journal of Institutional Economics , Volume 8 , Issue 1 , March 2012 , pp. 27 - 47
Copyright
Copyright © The JOIE Foundation 2011

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