Basic directions of American institutionalism

Financial University under the Government of the Russian Federation

Chair of Microeconomics

Referat of the History of Economic Thought

Theme; «Basic directions of American institutionalism»

Prepared by the student of IFF the 1st course group 1−1

Ivan Rasstrizhenkov

Scientific advisor: Viktor Vladimirovich Slobodyanik

Moscow, 2012

Table of contents

Intro

Capter 1:

1.1 Social and psychological direction

1.2 Socio-Legal Direction

1.3 Empirical (opportunistic and statistical) area

Chapter 2:

2.1 Assessment and the role of teaching Veblen

2.2 Assessment and the role of teaching Commons

2.3 Assessment and the role of teaching Mitchell

2.4 Negative aspects of American institucionalism

Conclusion

Sources

Intro

Before proceeding to the main direction of the American instituionalizma, we explain the concept of institutionalism.

Poniyatik «institutionalism» comes from the word «institution» or «institution», which refers to the custom of the order passed in the society, as well as the customary law or in the form of institutions. Proponents of institutionalism was referred to as a superstructural institutions and economic phenomenon: the state, the family, private property, corporations, a system of currency. No specific concept of «institution» still bore already marked ideological: it meant a desire to expand the subject matter of economics, the inclusion of Analysis of non-economic phenomena and institutions.

Institutionalism originated in the U.S. at the turn of the XIX and XX centuries. He also called old-institutionalism institutionalism amerikanskimy Its founders were three ekonosimta: Thorstein Veblen, John Commons and Wesley Clair Mitchell. Consideration of the flow as a whole shows how during the crisis «institutionalism» as a special course bourgeois political economy and today has many supporters. Question about the features of institutionalism is so more interesting that after the Second World War it was during one of the leading contemporary bourgeois political economy. It is represented by such bourgeois theorists such as Galbraith, L. Rooks, W. Gordon, G. Myrdal, R. Heilbroner, etc. What is the old institutsianalizm? (1)

There are two types of institutionalism «stvary» and «new.» The first school was an old institutionalism institutionalism, it is also often called the American institutionalism. Old institutionalism has the following characteristics:

a) Denial of optimization. Key actors are treated not as a maximiser (or minimizer) of the objective function, and how these different «habits» — acquired the rules of behavior — and social norms.

b) Denial of methodological individualism. Actions of individual subjects determined by the situation in the economy, and not vice versa. For example, their goals and preferences are social.

c) The main task of economics lead to «understanding» the functioning of the economy and not to the forecasts and projections.

g) Denial of approach to the economy as an equilibrium system and the economy is explained as an evolving system that manages the process of wearing cumulative. Old institutionalists repelled from the proposed T. Veblen principle of «cumulative causation» in which economic development is characterized by the interaction of various economic phenomena, reinforcing each other.

e) Good attitude to state intervention in the market economy.

Old institutsionaltzm, in turn, are also quite heterogeneous. That would fully understand it, you need to lead the analysis of the works of the «old» institutionalists. (2)

Historically, institutionalism has never had a particular «center», and the diversity of this trend gives reason to doubt its very existence as a scientific school. However there was a tradition to consider the three American economists — Torneys Veblen, Wesley Mitchell and K. ler Rogers Commons — as the main representatives of direction.

As part of the American institutionalism developed its three main areas:

1) social and psychological (Thorstein Veblen)

2) social and legal, (Roger Commons)

3) empirical-statistical and market. (Wesley Clair Mitchell)

And now we are more specifically analyze each of the main areas of work and the theory of the fundamental predstoviteley this teaching.

Chapter 1

1.1 Social and psychological direction

T.Veblen -1929). Born in Wisconsin in a family of Norwegian immigrant farmer in 1857. His major works were «The Theory of the Leisure Class» (1899), «The Place of Science in Modern Civilization» (1919). This scientist has entered history as «the first systematic critique of American capitalism»

Veblen was a major critic of everything bad that carried the Capitalism: parasitism rastovzichestvo in consumption, the desire for monopoly, he was able to predict the world revolution, which resulted in an increase in the role of managers, hanging role of science in the development of society. (3)

Veblen lived in the so-called «gilded age.» During this period, UNITED STATES of America asserted itself as the first industrial nation «successful captains of industry» stood behind the wheel of big corporations, «nimble, energetic, aggressive, greedy, domineering, greedy» — acted rapidly and coolly as in business and in politics. «By exploiting the workers and robbing farmers bribing congressmen buying legislature, spying on competitors by hiring armed guards, by threats, intrigue and power. (4)

Veblen’s theory called social-psychological institutionalism. The most important feature is the type of methodology Veblen so-called social Darwinism, the essence of which is that the evolution of social organization was the process of natural selection of social institutions. What were the main points of social Darwinism? Social-Darwinist prophesied that fierce competition in the industry, forcing outsiders large corporations (trusts) — a perfect mirror of the «natural order of things», a civilization that way going up, like biological evolution. Survival of the fittest, the best selection occurs when natural economic processes are going on as usual, without the intervention of the reformers and the government.

Veblen with the youth feel alienated from their busy world Yankees, and this so nazyvavmy disformiz determined his fate in science and in life. Knowing the fate of a poor student at the prestigious Yale University, then an unemployed Ph.D. and hack, he finally took a modest position in the University of Chicago, founded in 1892 with the money of the rich businessman U.S. JD Rockefeller hired lawyers who created the legal basis for the operation of large corporations (Holding — the company). Veblen was well inside the orbit is rapidly expanding power of big business, which began to subsidize American universities and identify prevalent in these ways of thinking.

Veblen quit this world — as well as academic marginalism B. Clark, his former teacher — calling his book «The Theory of the Leisure Class. Economic research institutes (1899), in which the «learned behavior and psychology of the American rich as any anthropologist studied the rites and rituals of a primitive tribe in New Guinea» (5)

Having established the need for a biological approach to the economy, Veblen gave Social Darwinism different color, evolution of society is a process of natural selection of institutions that, in fact, there is a habitual way of thinking in regard to the relationship between society and the individual. Institutions — the results of the processes taking place in the past and, therefore, are not in full compliance with the requirements of the present time, but under the pressure of circumstances in the life of the community, there is a change in the mentality of people, that is, development of institutions, and changes in human nature itself. (6)

Focus of attention was the Veblen Institute of the leisure class. Its emergence and development of Veblen linked with «selective effect of the laws of predation and parasitism» and practices of private property, the evolution of which is described as follows. The property originally appeared as a trophy. The motives underlying it — the rivalry, envy comparison, demonstrative prosperity as the basis of respect and thirst for power, conferred by wealth. «A healthy assessment of people and things is the assessment based on the fight.» Valiant opposition develops, aggressive, acquisitive activity and work, assumes the character of a tedious process due to negligent attitude toward it. As the stage of acquisition by rapacious seizure develops into the organization of production based on private property (slaves), superior strength and trophies as an indicator of success replaced by the «canons of monetary respectability» and the criteria for the accumulation of property and «experience the idle life.» These last are added in the «all-encompassing order of decency» with diligent exercise to develop good manners, education of taste and ability to «understand what commodities meet decency.» «Conspicuous consumption» (conspicuous consumption) expensive lifestyle products and a passion for «ostentatiously extravagant spectacle» become a leisure class forms of competition, motivated envious comparison, and gain reputation. Institution of the leisure class, according to Veblen, retards the development of society for three main reasons: the inertia inherent in the class itself, an example of conspicuous waste, the unequal distribution of wealth and means of subsistence (7)

The next major work of Veblen «Instinct skills and abilities of the industry» (1914) represents an attempt, based on new ideas in physiology («tropisms» J. Loeb) and psychology («Gorm» W. McDougall), to construct an alternative to the utilitarian model «hedonist optimizer. «Evolution of «finding effective means of subsistence» and production skills are in the «cumulative sequence devices» under the influence inherent in man «instincts,» by which Veblen understood not spontaneous, but purposeful behavior factors that develop in a particular cultural kontekste. V based economic activities of people are instincts. Although instincts are of ancient origin, they are continuously changing due to changes in social institutions, subject to the needs of the individual. Three major instinct: skill, parental feelings and curiosity, which are distorted and distorting private property.

The most important skill of instinct, which is the basis for the creation of useful goods. He is on the one hand and the desire for status, which provides the opportunity of leisure, on the other — are offshoots of the fundamental motive of human action, claim anciently — zavistnichestva, competitiveness. Humanity is evolving, becoming contrast between industry and business. Business is becoming the preserve of the new leisure class — money.

The main conclusion is the incompatibility of machine production and the profit motives. Business (financial capital), dominating the industry (workers, engineers, managers), holding back the development of production, does not perform any community service functions. Leisure class and consistently inevitably slows down the process of adaptation to the environment. Elimination rule Veblen business associates with the establishment of a technocratic system: decisive positions tezhnikam will own and control. Transition management of the economy in the hands of the Board of technicians from the general strike of engineers.

Utopia transfer of power to the engineering elite in the 1930s called «technocratic» (later the gamma value of the word «technocracy» significantly expanded), thanks to her Veblen assumed a prominent place in the history of sociology, but the engineers and economists have found it absurd.

In his latest book, «Absenteistskaya property» (1923), Veblen emphasized the expansion of ownership of the intangible wealth of financial titles, separated from meaningful participation in the production of material goods. Veblen’s criticism on the «business world» put in the analysis «absentee ownership» in the most bilious outpourings. But the transformation of the economic system of society in a more streamlined look Veblen not optimistic, noting that the American «middle class» tends to imitate life style «leisure class.»

" Persona non grata" among theorists, economists, Veblen bequeathed institutionalists «spirit of dissent.» His ideas are still attractive for supporters of innovative approaches to economic theory (8).

1.2 Socio-Legal Direction

J. Commons (1862−1945). He graduated from the University of Baltimore. For a time the Commons was a teacher, then practitioners in the trade unions, in various government organizations and commissions. Proceedings of the «Legal grounds of capitalism» (1924), «Institutional Economics» (1934), «Economics of collective action.»

The economic development of the society he considers legal relations, law, and economic institutions — the categories of legal order. He was one of the theorists of the trade union movement in the United States defends the thesis of the primacy of law over the economy.

Already in his first book, «The distribution of wealth» (1893) Commons disagreed with marginalist individualistic interpretation of the distribution of social income and ignoring the historical volatility of property relations and human rights, including the right to the highest possible share of the national product. Commons registered growth of monopolistic elements in the market economy and to justify the existence of trade unions seeking wage increases above a certain minimum, and are necessary to protect workers from the pressures of big business. But at the same time, the Commons believed that the influence of large corporations can be beneficial to the extent that they are able to mitigate the severity of depression and increase the scale of production. Therefore, at first, he put forward a plan search tools compromise between organized labor and big business, the economic contradictions of reconciliation through collective action by defining a result institutional economics as the «economy of collective action» (the name of the last of the Commons, published posthumously in 1951).

Value is the estimated future earnings, given in the present. The value of the cost redividing legal procedures concerning labor deal. An important part of the theory belongs to the Commons category «bargain» and «collective action.» According to him, the only way of reconciling conflicting interests and check on the individual actions are collective actions in this framework people linked through transactions. Being closely associated with the property relations, collective action in the economy suggest certain legal framework and are expressed through the courts. Evolutionary development of economic science, according to the Commons, demanding study of judicial decisions in several centuries era of capitalism, to have a clear idea of?? how collective action confined to individual. A further object of Commons considered the study of the history of economic thought to determine how the economic theory included notions of collective action. These tasks Commons dedicated the book «Legal basis of capitalism» (1924) and «institutional economics» (1934). A figurative expression B. Seligman, the Commons' distilled his theoretical system in complex devices hundreds of judicial decisions and dozens of types of economic theory. «On the other hand, the Commons called capitalists to establish «good relations» with the workers to stop slight unions as evil machinations and to recognize trade unionism and the legal status of an integral part of the structure of a mature industrial society (9)

On the one hand, the Commons opposed his views of the Marxist doctrine of class struggle and socialist ideas. He recognized the fact of impoverishment of the proletariat only to early capitalism and Marx criticized for underestimating the capabilities of Trade Unions and social reforms to improve the situation of the working class. A new stage of industrial development associated with the growth of large corporations, led, according to the Commons, the «diffusion of capitalism in the midst of the broad masses of the people.» Commons classics and blamed for erroneous marginalists rationalistic psychology and failure analysis of legal forms. He came to understand the institutions as historical and legal authority of the hallowed traditions that have their roots in the collective psychology. Once formed, the current collective institutions direct the behavior of individuals. Central place in the current collective institutions Commons assigned to corporations, trade unions and political parties. They act as a «pressure group». (10)

Along with collective action other major categories of institutional theory the Commons was the notion of the transaction. Speaking about the transaction as the basic equation of economic behavior, the Commons identifies three stages: conflict, cooperation, resolution. The essence of economic relations, he brings to the transactions with property titles, three categories of property: real, immaterial (debt and debt) and intangible. The three types of transactions: market (more than five parties — the buyer, the seller, the court, the potential buyer and the seller), administrative (managers with employees) and distribution (taxes, budget, price controls).

In the theoretical constructs Commons lot to do with dichotomies Veblen, but where the pessimist Veblen sarcastic notice the absurdity and irreconcilable conflicts complacent Commons found the gradual emergence of the «reasonable and customary reasonable cost, which vary under the influence of the institutions themselves.» Making a distinction between existing businesses aimed improving the technical efficiency of production, and existing firms engaged only financial transactions, the Commons thought possible balance the interests of industry and bizneca: «The best production company — it is, where technical factors are used most in proportion due to the efforts of managers. Best company — one where the correct shape the buying and selling by market transactions. The best of the collective institution — one where the ratio is in the right technology and business «(11)

Special role in the monitoring and regulation of the economy is the state, especially its legislative activity, according to the Commons promotes reconciliation of the conflicting parties.

Commons elaborated on the process of long-term loan and the inclusion of investor-banker in industrial production. Bankers capitalism associated with the separation of legal control over the goods from the physical and the pursuit of titles to property. Bankers organize issue and placement of shares, corporations hire lawyers, putting pressure on the legislature and an extensive program of public relations (public relations). Powerful economic groups are more powerful than Congress. «That association, not individualism became a haven of modern liberalism and democracy to be saved from communism, fascism or banker’s capitalism.»

Optimism Commons showed and his confidence that a reasonable value achievable collective actions of capitalists and workers. In the «business» of trade unionism, where workers collectively defend their property rights in the practical issues of wages and working hours, in collective bargaining, he saw the most important way to maintain social equilibrium. This confidence expressed in his Commons avtobiografii21, published a year before the adoption of the Employment Relations Act — one of the most important events veltovskogo Ruz, the New Deal, to secure for the workers the right to collective bargaining

1.3 Empirical (opportunistic and statistical) area

economy veblen american investor

One of the prominent representatives of institutionalism in the U.S. was Mitchell. Student of Veblen Wesley Clair Mitchell (1874−1948) studied at the University of Chicago, he trained at the Vienna (lectures Menger did not impress), and from 1913 until his death he worked in New York at Columbia University. Mitchell believed correct model of rational criticism of Veblen hedonist, and continued in a series of articles. He believed that the political economy is an economic behavior of people, obeying certain psychological motivations. But along with this as a factor that most strongly influences the activity of the economic agents, he considered the money factor (circulation of money, the activities of financial institutions). He set himself the task of taking the next step in moving Veblen from the «normal» model of reality — to confirm the difference between the actual behavior of the economy of the hedonic normotipa through statistical analysis. «Real» economic entity was for Mitchell «average» man in his relation to monetary institutions. Mitchell know the expression that the money may not be the root of all evil, but they are at least «the root of economic science.»

Mitchell believed that the money economy, despite its shortcomings, is the best form of economic organization of society. On this basis, it is a generally positive attitude to such a variety of money economy, as financial capitalism. Veblenovskaya «dichotomy of industry and business» was continued in the analysis of the gap between Mitchell dynamics of industrial production and prices. For the price mechanism Mitchell wanted to see not mechanical laws of supply and demand, and the conflicting motives of the people involved getting and spending of money. «…The most important thing to understand about the money, it is — the mechanism of the money economy, that is, the social role of a highly organized group of financial institutions and how they have evolved since the Middle Ages, became quasi-independent and have the opposite effect on the activity and the minds of their creators «(12)

Mitchell’s first work — «The history of green tickets», «Gold, prices, and wages in the dollar standard.»

The next problem, which went down in the range of his scientific interests, was the problem of the economic cycle. («Business Cycles» — it contains detailed data on the movement of business cycles in the period 1850−1925 gg.).

Mitchell has been a staunch supporter of the exchange theory. The writings on the history of the cycle he tried to explain this phenomenon, based primarily on the phenomena of the circulation (prices, stock prices) and not production.

Mitchell to a certain extent can be assessed as a leader in the areas of empirical institutionalism. Over the years, he and his team is about a thousand time series of the various peoples of economic indicators. Based on extrapolation of these series was supposed to predict the economic situation. Thus arose the famous Harvard barometer, which initially gave very accurate results, but during the «Great Depression» of 1929;33. fiasco, predicting prosperity before the economic meltdown.

Mitchell shared the idea of the need to strengthen institutionalism social control over the economy. In 1923, he proposed the creation of a system of state unemployment insurance, which was then considered unacceptable attack on freedom of enterprise. One of the first he demanded the indicative planning of the U.S. economy.

Mitchell entered Sombart prefer the concept of «economic conditions,» the notion of «business cycle.» S1920 Mitchell led the National Bureau of Economic Research, use the collection and processing of statistical data to predict economic fluctuations. The result of the Mitchell in this office has been enlarged reprint of the book «Business Cycles» (1927), considered exemplary research. Mitchell’s high reputation not shaken even by his failure to predict the economic situation in 1929, when he was not able to predict the «great crash» American «prosperity.» During the «New Deal» Mitchell, already in the 20s to put forward the idea of?? state intervention — banking reform, the use of government spending as a counterweight, a system of unemployment insurance — are actively involved in the government measures for economic recovery. During these years he also prepared for publication a collection of representative works of his teacher «What Veblen taught» (1936) and published a collection of their own articles «Backwardness in art spending money» (1937). Mitchell sought to show that the art of «making money» in modern civilization far ahead of their ability to rationally. Especially waste of money in the household budget, where the nature of the cost is often determined by the desire to outdo the other, subtle ways of spending money are one of the most important ways to assert itself in the community, gain prestige.

Describing irrational institutions of the monetary economy, Mitchell still consider it the best of economies. This belief distinguishes his views from sardonic criticism of Veblen and, conversely, is moving closer to the reformist «goodwill» of the third founder of the tradition of American institutionalism — John Richard Commons (1862−1945).

Chapter 2

2.1 Assessment and the role of teaching Veblen

Veblen’s work is quite subtle analyzes many aspects of the economic system of the United States of America in the early XX v. Etot period characterized by a shift of economic power in the hands of financial «giants», the manipulation of capital as a key source of augmenting financial capital, a significant separation between ownership and capital funktsii. Vmeste with that Veblen was a supporter of exchange kontseptsii. Istoki social conflicts he sought in the field of financial treatment in proizvodstva. Protivorechiya not in production they were treated as secondary.

Based on the teachings of Veblen’s central role in the transformation were to play an engineer, (people coming to power on the basis of knowledge of modern technology). Regarding his views, taking part in the creation of productive forces, the formation of high-performance technology makes technocrats desire for political domination .

During the conflict between the interests of business and industry and development, engineers implicate hatred finansistam. Hotya «leisure class» to attempt to bribe inzhenerov. Chast engineers, technicians sobenno older person went to the deal, but most of the young professionals did not agree with the'' idle class'' because the interests of science and technology for them to have a higher price than their personal enrichment.

Specific pattern of establishing a «new order» looks

Veblen’s works as follows: brainpower began a general strike which paralyzed industry. Paralysis economy makes «leisure class» retreat. The power is in the hands technocrats who start the transformation of the industrial system in the new basis. Veblen argues that unite rather insignificant the number of engineers (up to one per cent of the total) to «Leisure class» voluntarily relinquished power.

However, according to Veblen, the socialization of property need only there parasitism where the upper classes especially strong technical delays progress. In describing his social ideal Veblen’s emphasis on management issues, and not on the property. He believed that in highly developed capitalism, under the rule of the financier, shareholder shape makes a big capitalist property into something «Absenteistskoe» (missing, intangible).

Creativity Veblen in economics caused quite divergent responses. Thus, representatives of conservative and moderates criticize him for unduly harsh in their view, the position in relation in big business. They also point to the lack of realism of many of his predictions (eg, the fact that the loan, as well as personifying it banker, soon beduyuschem «dying away»). In contrast, representatives of Veblen left intellectuals idolized for his deep, original criticism of the «leisure class», «monetary civilization» in general.

Veblen’s concept of evolution «industrial system» has not been vain for levoformatopskogo wing of American economic thought. It was further developed in the research of a prominent economist and sociologist JK Galbraith, in a number of futuristic models Alvin Toffler, R. Heilbroner, etc.

Institutionalism incorporates the best theoretical and methodological achievements of previous schools of economic theory and, above all, based on mathematics and statistics principles neoclassical economic analysis.

Institutionalists are great at describing real economic structures and identification of their specific institutional forms in a given country, considering the evolution of the institutional system, in fixing the new phenomena and processes. Their work — an essential source of the material necessary for understanding the nature of modern capitalism, especially for analysis of its various forms and types, to study the individual institutions and institutional units, the role of institutions (including policy State) in stimulating or maintaining economic development. On the basis of empirical institutional research has been done conclusions broad theoretical, enriched political economy. This applies to different areas and issues, such as the theory of consumer demand (Veblen's ideas about the effect of the «demonstration» is not saturable 'status' needs, the role of demand-side management), the theory of monopoly (the monopoly nature of large companies, the role of oligopolistic structures, «managed Price «), the domain of» industrial relations «(relations between labor and capital), labor market and social welfare economics, the theory economic cycle, inflation, etc.

2.2 Assessment and the role of teaching Commons

As expressed by J. Commons, should be studied not only functioning as the development and the transformation of capitalist society. They are critical of capitalism, for the expansion of social programs. The question of social guarantees of employment may become more important than the question of the level of wages. So the problem of unemployment is primarily a problem of structural imbalances.

We must abandon the analysis of economic relations from the perspective of the so-called «economic «person. Need not separate the actions of individual members of society, joint, coordinated action by organizations (trade unions, government agencies and others) against the dictates of entrepreneurs.

2.3 Assessment and the role of teaching Mitchell

Handling the huge statistical data, the American economist Wesley Mitchell (1874−1948) came to the conclusion that we should not look for common causes of cyclical crises. Each crisis has its own specific reasons. Business cycles (crises — a component of them, one of the phases of the cycle) are deployed under the influence of many forces, under the influence of multiple factors, interwoven and generally reinforce each other.

Mitchell’s conclusion: economic cycles are mnogofaktory process. Each one is unique and needs its own explanation. Decisive role in the formation of the cycle removes Mitchell prices, prices of securities, the processes in the sphere of circulation.

Analysis of the monetary system, credit Mitchell paid special attention. He called the money engine of economic life, and believed that, along with the art of «making money» must learn the art of spending it (Mitchell, author of the treatise «The backwardness of the art waste money»).

Task, which sought to find Mitchell, was, first, to predict market conditions (for a quarter century, he played a key role in the National Bureau of Economic Research), and secondly, to identify tools that can reduce cyclical fluctuations.

W. Mitchell — author of the concept of «lead» and «lag». He did practical conclusions from the uneven dynamics of wholesale and retail prices, the movement of prices and wages. Economists criticized for underestimating the Mitchell theory, noted the high importance of his conclusions and the quantitative method.

According to Leontief, Mitchell, his students and the U.S. are required to deploy large-scale narrative of economic statistics, without which it is not only a modern economic science, but many of the modern economic institutions could not seem to exist.

Approaches to the calculation of the national product was rightly appreciated by experts who continued to work in this direction. Mitchellovsky investment analysis and anticipated the next cycle of development and theoretical conclusions.

2.4 Negative aspects of American institucionalism

In my worke o wrote a lot of positive aspects of this teaching. But look at all the positive aspects of institutionalism question why American institutionalism, despite the abundance of interesting ideas, not become the main course of economic thought in the XX. Why it has not replaced the neoclassical theory, if the criticism of him was perfectly reasonable?

Besides there are both external and internal (within the resulting flow) reasons. Among the external factors that have had a negative impact on institutionalism in the 1930;1940;ies., Are the following.

First, since the mid-1920s. sociology became an independent science, separated from the economy, and in the psychology of the most popular courses (to the detriment of the study of instincts and habits) became behaviorism, for which awareness, motivation and creativity were not the subject of a special analysis. Although institutionalists attacked hedonistic reasons of economy, this time they themselves have not yet formed a common platform for the analysis of individual behavior. Thus, institutionalism lost one of his strengths — interdisciplinarity, that made him so attractive to the best minds from all related disciplines.

Second, the Great Depression and the New Deal also created a number of problems. For institutionalists, as for the other economists, the Great Depression was an unpleasant surprise. It turned out that the theory of business cycles Mitchell adopted traditional institutionalists, it is not able to predict and explain.

Third, at the time came and started to develop Keynesianism. Thanks to him, the consideration of aggregate economic output, national income statistics, unemployment has also been attributed to the mainstream economy. Keynesian economics became involved and empirical testing, which meant that institutionalism — is not only an empirical trend in the economy.

But it would be incorrect to attribute all the problems the negative influence of external factors. Besides them, there were internal problems. Indeed, as the flow of institutionalism was defined only in general terms, and as part of this trend in 1930. there has been a movement toward separatism rather than to unite. Leading researchers have developed their own versions of institutionalism, without any concern for how to get along with colleagues. As a result, by the end of the 1940s. institutionalism as a single research program, which analyzes and quantitative methods, and the business cycle and is associated with psychology, and law, and sociology, has practically ceased to exist.

The current was forced into the periphery, but dissatisfaction with mainstream neoclassical theory remains. Then the period of accumulation of facts and total criticism neo replaced by a period of crystallization of new ideas. If earlier neoclassical framework simply rejected, but now began to change them, which eventually led to the formation of the new trend — neo-institutionalism.

Traditional institutionalism does not become the main course of economic thought. Still to this day he is demonstrating its viability. Graduate and postgraduate programs in which he studied in depth, there is, for example, at the University of Kansas City (Missouri, USA), the University of Denver (Colorado, USA), Hartfodshirskom (m, b.: Hertfordshire?) Universitete28 (UK). International organizations such as the Association of institutional thinking (Association for Institutional Thought), the Association of Evolutionary Economics (Association for Evolutionary Economics), the Society of socioeconomics (Society for the Advancement of Socio-Economics), regular conferences, gathering a large number of supporters of traditional institutionalism. Journal Journal of Economic Issues constantly publishes not only articles on the analysis of the classical heritage of traditional institutionalism, and original works by contemporary researchers who carried out as part of this trend. Among Russian economists also have scientists working in this direction (see, for example, an article by Nesterenko29 Maevskogo30 and B.).

Conclusion

The end of his essay, I want to note that economic theory institutionalism — a direction rather than a constructive and critical plan. Economic and historical significance of this teaching is truly great. E. Zhamso, for example, saw it in the fact that the representatives of this trend have described the new conditions of capitalist economic development associated with the transition to monopoly capitalism. «In the absence of permanent theoretical laws — he wrote, referring to the rejection of institutional Nationalists set pattern of economic processes — the contribution of institutionalism was in a very in-depth description of economic conditions and the conflicts of interest present. '

The main contribution to the theory of economic thought is that the representatives of institutionalism questioned the central tenets of classical economics: rationality of individual behavior, the automatic achievement of the optimal economic system, the identity of the private-sobstvennichekogo public good.

Institutionalism showed how little our economy, without being absolutely monopolistic, corresponds to the classical picture of free competition «The emergence of institutionalism has caused a significant shift in the bourgeois political economy — from the description and apology mainly past history of capitalism (characteristic of the historical school), and cut off from the real world of scholastic abstractions marginalism to the description and classification of actually existing capitalism of economic phenomena.

They also insisted that the object of study in economics was not rational, but a real person, often acting under the influence of irrational fear, bad conscious aspirations and pressure from society. As already mentioned, the behavior of the people affected by the motives of conspicuous consumption, envious comparison, the instinct of imitation, the law of social status and other congenital and acquired addiction. Therefore, representatives of institutionalism advocate a multidisciplinary approach, and insist on the inclusion in the economic analysis of subjects such as psychology, biology, anthropology, law and others.

Institutionalism as for economic thought rather vague, there is no economic model, clear assumptions that are so characteristic of classical political economy, and in a constructive manner to the negative, critical charge has had an impact on the further development of economic theory.

Thus, institutionalism is a theoretical predecessors emerged in the 30's. Keynesian and neo-liberal concept of state regulation of the economy, the basic idea is government intervention in the economy.

Sources

(1) Basic economic theory. Course of lectures. Edited by A. Baskin, Botkin OI Ishmanovoy MS Izhevsk: Publishing House «Udmurtia University», 2000.

(2) IV Rozmainsky, KA Kholodilin. History of Economic Analysis in the West. Institutionalism. Old institutionalism. General characteristics

(3) Zhamso E. History of Economic Thought XX century. C. 91; Blaug.M. Economic thought in retrospect. M. Case, 1994. Pp. 616−617

(4) R. Hofstadter The American political tradition and its creators. Moscow, 1992. Pp. 187, 188.

(5) JK Galbraith Life in our time. Moscow, 1986. P. 43

(6) T. Veblen Theory of the Leisure Class. M., 1984. Pp. 200−202.

(7) Ibid. S. 174.

(8) Hodgson G. M. Thorstein Veblen and post Darwinian economics Quarterly Economic Journal. 1992. No. 16.

(9), p. by: B. Seligman Ordinance. Op. S. 89

(10) Commons J.R. Industrial Government. New York, 1923. P. 272.

(11) Commons J.R. Economics of Collective Actions. New York, 1950. P. 33

(12), p. by: B. Seligman Ordinance. Op. S. 92.