The original institutionalist perspective on economy and its place in a pluralist paradigm

Abstract

This paper provides a basic overview of original institutional economics (OIE). It is intended to serve as a primer for anyone interested in knowing more about OIE. The paper provides an OIE perspective on four major topics: humans and their relation to the natural environment, technology, the economic process, and institutions (and how these evolve). Finally, the paper proposes that the holistic OIE paradigm has an important role to play in the pluralist approach to economics and economic education. This paper hopes to accomplish two tasks, one to explain the original institutionalist approach to economics in a simple and understandable way that respects a century of scholarship, is palatable to a wide range of institutionalist economists, and is understandable to readers who may have little if any prior knowledge of original institutional economics. The author claims no originality. He is only attempting to synthesise the thoughts of others who deserve the greater credit for developing the ideas. The second purpose is to discuss how institutionalism might enhance or be enhanced by a pluralist approach to economics. After a brief exploration into the roots of original institutionalism the paper will explore the four major elements of original institutional analysis: the natural environment and its relation to humans, technology, culture, and institutions. In the end it should be obvious that none of these elements stands alone. Rather, all four elements come into play in describing how economies work and change.