Hiroyuki Uni and Takayuki Nakahara (2017)
In: Uni, Hiroyuki (ed.) (2017): Contemporary Meanings of John R. Commons’s Institutional Economics. Singapore: Springer, pp. 141-163.
Abstract. After discussing the uniqueness of Dewey’s philosophy in relation to (1) the world’s plurality and multiplicity, (2) the primary significance of multifarious interactions, and (3) the interrelation between habit and intelligence, we clarify the uniqueness of Commons’s institutional economics: (1) value theory based on multiple causation; (2) transactions as the ultimate unit of analysis; and (3) the interrelation between habitual assumption and collective action. We examine the theoretical connection between Commons and regulation and convention theories. The former partly shares and develops the first characteristic listed above, multiple causation, while the latter shares and develops the third characteristic, the interrelation between habitual assumption and collective action. In Institutional Economics (Commons, J.R., Institutional economics: Its place in political economy. Macmillan, New York, 1934), applying the idea of “multiple causation,” Commons approached macrodynamics based on the expansion of some key concepts and studies on income distribution and demand growth. This was a prototype of growth analysis based on the cumulative causation model with various forms of coordination, later formulated as regulation theory. Commons, following and developing Dewey’s theory of habit and intelligence, created the concept of “habitual and customary assumptions” and discussed a collective process for achieving “reasonable values,” such as the common-law method. Two-layered coordination in convention theory attempted to explain the psychological means and social mechanisms involved in the persistence of customs and institutions, which Commons briefly mentioned. Using Commons’s theory as a medium, it may be possible to articulate the macrodynamics developed by regulation theory and the micro theory of human interaction developed by convention theory.