Hamiltonian and Teleological Dynamics a Century after Veblen

Abstract

David Hamilton's book, Evolutionary Economics: A Study of Change in Economic 7hought (1953), is now fifty years old. Soon after its publication, Hamilton's book became a classic in the literature of institutionalism and justifiably remains so today. The book is powerfully written. It is simultaneously straightforward and subtle. We can only hope that it will remain popular for another fifty years. Thank you, Professor Hamilton. The central theme of Hamilton's book is that institutional or evolutionary economics is fundamentally incompatible with the classical and neoclassical tradition. Hamilton's message was clear. Institutionalism is firmly rooted in the evolutionary tradition of Charles Darwin. Classical and neoclassical economics are just as firmly rooted in the mechanistic and deterministic world of Isaac Newton. There can be no reconciliation between the two approaches, just as there can be no reconciliation between quantum mechanics and the soothing words of Madame Rosa, the tarot card reader. The pre-analytic visions of the two groups are vastly different. The central theme of this essay is that even though there have been numerous changes in both institutional and neoclassical economics over the last half century, Hamilton's incompatibility assertion was correct when it was written and remains correct today. This is not a trivial assertion. How institutional economics is defined is closely related to the incompatibility issue. In turn, how institutionalism is defined conditions how institutionalists behave. Recent discussions of the future of institutionalism also addressed the incompatibility issue (Miller 2002, Samuels 2000, and Hodgson 2000), and it was clear from these discussions that there is no consensus view on the subject.