The "Practical Reason" of Reformers: Proudhon vs. Institutionalism

Abstract

Besides the common faith in the effect of collective action to change economic institutions and, above all, the distribution of income, the most remarkable similarity between Proudhon's theory and old institutionalism resides in their epistemology. In both cases, we find applications of some sort of classical "practical reason" approach to social order. The former tends to be centered on the idea of justice, the latter on democracy. The major difference is that law tends to be instrumental for institutionalists, while for Proudhon, the law is based on morals and is an expression of justice. Thus, institutionalism accepts public law as a mechanism of allocation and sees the state as an important factor in the enforcement of rights. On the contrary, Proudhon opposed any form of political control and based his "revolution" on social law.