Spreading the Word: Transaction Cost Economics in the Conversation of Economics

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Introduction IN THE LAST DECADES, fields of business and economics related disciplines have grown and created colossal amount of texts. Still, there is only so much time for one to read and consider what to absorb into one's intellectual portfolio. Klamer and van Dalen (2002: 290) have noted that the sheer abundance of texts to be read will render chance of being noticed at all minimal. That has not been case of transaction cost economics (TCE). TCE has become key topic in business studies and economics, much as result of Oliver Williamson's crusade. Williamson has become one of most cited scholars in social sciences (see Pessali 2006) and has been awarded Sveriges Riksbank Prize in Economic Sciences--the Nobel Prize in Economics--in 2009. This is evidence that his arguments have been widely heard. As our daily practices show, an essential part of academic life revolves around exchanging arguments, be it in oral or written form. It is through these exchanges that we learn, review ideas, build and test hypotheses, develop new theses, and so on. Many scholars have suggested that this process can be studied as conversation (Klamer 1984; McCloskey 1985; Nelson, Megill, and McCloskey 1987; Samuels 1990). To take part in conversation of business studies and economics, for instance, authors need to show what brings them close to and what separates them from certain established views. This is particularly relevant for authors claiming to swerve from dominant tradition (Klamer 2007), and even more to those striving to reach out to different discourse communities both inside and outside discipline (Goldschmidt and Szmrecsanyi 2007). On this regard, in his pioneering book Markets and Hierarchies (1975, hereafter MH), Williamson claimed to offer a distinctive worldview (1975: xii). To recognize what is distinctive, we usually draw on comparison with what is familiar. Indeed, Williamson has made many references to different groups of scholars associated with different worldviews in order to advance his ideas. As Deirdre McCloskey (1999) suggests, being attentive to one's implied readers is paramount to being read. Flipping through text, readers with different worldviews look for shared ideas, notions, premises, arguments, objects, references, models, and techniques. In their turn, authors are usually aware that presenting certain ideas or premises will bring their approach closer to this group of thinkers or away from that other group. In MH (p. 1), Williamson claims that his views belong to new institutional economics. How he relates to other established worldviews is thus no ordinary matter. The claims made about what is new, different, or complementary in relation to particular groups of scholars are bound to affect conversational feedback from his intended audiences and are relevant rhetorical ingredient in unfolding of his project. (1) Such conversational markers are our object of study here. We explore appeals made in Williamson's texts to different groups of scholars with bearing on subject of economic organization--a subject that involves business studies, economics, law, and sociology (to quote only few) to which Williamson has repeatedly claimed to relate. We then discuss rhetorical possibilities of his discourse towards those audiences. According to Williamson, quintessence of his intellectual efforts can be found in his trilogy: MH (1975), The Economic Institutions of Capitalism (1985; hereafter EIC), and The Mechanisms of Governance (1996; hereafter MG) (see MG: 18). His trilogy on TCE will be thus our main, though not exclusive, source for analysis. In what follows, one section will be dedicated to each one of books, trying to follow conversations in chronological order. Markets and Hierarchies: In Beginning There Were Many Invitations Williamson (1995: 118) separates his work into three periods: before 1970, during which time I was working mainly within an orthodox setup; decade of 1970s, which was transition interval, and after 1980, by which time my shift into transaction cost economics was complete. …