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History of Political Economy 33.2 (2001) 383-384



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Book Review

The Founding of Institutional Economics:
The Leisure Class and Sovereignty


The Founding of Institutional Economics: The Leisure Class and Sovereignty. Edited by Warren J. Samuels. London and New York: Routledge, 1998. xii; 322 pp. £60.00.

This collection is a centenary commemoration of Thorstein Veblen's The Theory of the Leisure Class (1899) and John R. Commons's series of articles in the American Journal of Sociology that made up his A Sociological View of Sovereignty (1899–1900), later collected and published in book form by Joseph Dorfman. These two pieces of work are seen by Samuels as “founding, or at least foreshadowing, the school of thought which eventually became known as Institutional Economics” (xi). The book consists of a part 1 containing two essays that discuss Veblen and Commons; a part 2, with five essays, on Commons's A Sociological View of Sovereignty; and a part 3 on Veblen's Theory of the Leisure Class, containing nine essays. It must be said that the essays in part 1 and two of the essays in part 2 discuss A Sociological View only tangentially, if at all.

The two essays in part 1 address interesting issues but fail to satisfy. David Hamilton's essay “Veblen, Commons, and the Industrial Commission” discusses the role of the findings of the United States Industrial Commission (which reported in 1902) on Veblen and Commons. This material was used extensively by Veblen in The Theory of Business Enterprise, but Hamilton provides no detailed analysis of what Veblen took from the reports. Moreover, the link to Commons appears only through Commons's 1934 discussion of Veblen and intangible assets. Edythe Miller's essay “Veblen and Commons and the Concept of Community” attempts to counter the claim that Veblen's theory of instrumental value and Commons's theory of reasonable value are competing paradigms. Miller seeks to find “sufficient correspondence on major premises” to place both Veblen and Commons in the same school, but the gulf between reasonable value as “processual” (25) and instrumental value as the “unhampered working of the industrial system at its full capacity without interruption or dislocation” (20) remains unbridged.

Part 2 contains a chapter contributed by Warren Samuels consisting of a reprint of Commons's short 1896 essay “Political Economy and Law,” followed by some annotations by Samuels himself; an essay by Richard Gonce that is a careful and scholarly examination of the genesis, content, and role in Commons's work of A Sociological View of Sovereignty; and three essays by Glen Atkinson, Richard Dawson, and Steven Medema that all, in various ways, discuss the role of sovereignty, property, and law in Commons's evolutionary political economy more generally. All the essays in this section stress the importance in Commons's work of the idea that the law is created through a process of legislatures and courts deciding between conflicting interests. The papers by Gonce and Dawson contain the most novel content.

The essays comprising part 3 on Veblen's Leisure Class can be grouped into three: (1) those dealing with aspects of leisure class behavior and related issues of fashion, bandwagon, and snob effects, and of the role of women in the leisure class; (2) those dealing with the underlying evolutionary aspects of Veblen's work; and (3) those discussing Veblen's instrumental value system, the Veblenian dichotomy, and [End Page 383] his “emancipatory social science.” The quality of these articles varies considerably, but there are some excellent papers, and they represent a good overall contribution to the literature on Veblen.

In the first group are Philippe Broda's discussion of the “vanishing” of the leisure class from Veblen's later works as the businessperson replaces the aristocrat at center stage, an interesting point; Rick Tilman's comparative analysis of Veblen and Georg Simmel on fashion, a topic I am glad to see investigated; E. Ray Canterbury's discussion of the more “mainstream” attempts to include Veblenian ideas of bandwagon, snob, and relative income effects into demand theory...

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Additional Information

ISSN
1527-1919
Print ISSN
0018-2702
Pages
pp. 383-384
Launched on MUSE
2001-06-01
Open Access
No
Archive Status
Archived 2005
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