John Kenneth Galbraith and original institutional economics

Abstract

Thorstein Veblen is the acknowledged founder of the original (old) institutional economics (OIE). Later contributors include John R. Commons, Clarence Ayres, Walton Hamilton, Rexford Tugwell, and, it is argued, John Kenneth Galbraith. Galbraith's insistence that economics address the social predicament and pass the "test of anxiety" is consistent with the pragmatism of OIE. Indeed, Galbraith epitomizes the OIE in his blending social scientist with social reformer. Galbraith's treatment of technology and institutions is reminiscent of Veblen's celebrated dichotomy, as is his emphasis on power and the "conventional wisdom," and his insistence that the social economy is ever evolving, whereby the economic problem is not static but processual, which mandates continuous social reform efforts.