Institutions, economy and politics: the debate between Commons and North

Abstract

This article compares John R. Commons and Douglass C. North. Both scholars justify the role of institutions by referring to cognitive issues and emphasise power relations as a key concern. However, their perspectives are radically different. North focuses on the barriers to the emergence of “open-access orders” in developing countries. The existence of impersonal norms is supposed to eradicate violence in society. In contrast, Commons is a progressive preoccupied with the survival of capitalism. In his view, through the growth of inequalities, these norms renders the system unstable. The economy has to be bounded at the political level.