Institutionalism as a stage in the development of economic science. Stages of development of institutionalism. Socio-legal institutionalism

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Introduction

1. Prerequisites for the emergence and general features of institutionalism

2. The main stages in the development of institutionalism

3. The role of T. Veblen as the founder of institutionalism, the “Veblen effect”

4. The system of economic views of J. Commons

5. Research by W. Mitchell in the economic theory of institutionalism

6. Basic doctrines of neo-institutionalism

Conclusion

List of used literature

Introduction

aim This work is a presentation of the general characteristics of institutionalism as a new direction in the economic theory of the XX century.

Tasks of this work:

Analyze the prerequisites for the emergence and formulate the general features of institutionalism.

Describe three main stages in the development of institutionalism.

Outline the essence of Veblen's economic views, consider the "Veblen effect"

Reveal the role of Commons in the development of institutionalism.

Analyze the essence of Mitchell's main doctrines.

Describe the direction of neo-institutionalism.

1. Prerequisites for the birth and aboutcommon features of institutionalism

The emergence of institutionalism in the United States was by no means accidental. It was determined by the entire course of the previous economic development of the country and the state of Western economic theory.

At the end of XIX - beginning of XX century. Free competition capitalism has developed into a monopoly stage. The concentration of production and capital increased, and the centralization of banking capital took place. As a result, the capitalist system gave rise to sharp social contradictions. The interests of the "middle class" suffered significant damage. Active state intervention in the economic life of society was considered unacceptable, and capitalism was seen as a stable self-regulating system capable of achieving and maintaining market equilibrium, eliminating unemployment, and preventing protracted crises.

The rapid growth of industrial and agricultural production in the United States throughout the 20th century, the significant strengthening of their position in the world community, the promotion of the country as a world economic leader led to the emergence of a new economic theory - institutionalism. He set the task, firstly, to act as an opponent to monopoly capital and, secondly, to develop a concept for protecting the "middle class" through reforming the economy in the first place.

The very term "institutionalism" means custom, instruction, instruction. Institutionalism became widespread in the United States in the 1920s and 1930s. 20th century They considered institutions to be the driving force of social development, which are understood as:

Public institutions, i.e. family, state, monopolies, trade unions, competition, legal norms, etc.

Social psychology, i.e. motives of behavior, ways of thinking, customs, traditions, habits. Economic categories are also a form of manifestation of social psychology: private property, taxes, credit, profit, trade, etc.

The object of analysis of the institutionalists is the evolution of social psychology. The analysis is based on a descriptive method.

Institutionalism opposed several important provisions of economic liberalism, in particular, against the thesis of the inadmissibility of state intervention in the economy. At the same time, he fully embraced a number of other ideas, such as the provision on the protection of the rights of the individual and private enterprise. The main thing was that the institutionalists significantly expanded the subject of economic science.

Institutionalism is characterized by a rather sharp criticism of the capitalist system, which is largely conducted from a moral capitalist position. Scientists of this direction insisted on the need to strengthen the economic role of the state and expand state social programs. They argued that the issue of social guarantees of employment for society is no less important than the issue of the level of wages. The state is also obliged to take such spheres of activity as health care, education, and public utilities under its guardianship.

Institutionalists opposed the neoclassical doctrine of self-regulation of the market economy. The market cannot be considered a neutral and fail-safe distribution mechanism. The market, not controlled by the state, provides an opportunity for easy enrichment for large entrepreneurs. The basis of the power of large corporations is equipment and technology, not the laws of the market. The decisive role in such a situation is played not by the consumer, but by the manufacturer, the technostructure.

It is also necessary, the institutionalists said, to abandon the analysis of economic relations from the standpoint of "economic man". Not only the individual is important, but the whole society. Emphasis should be placed on the study of not individual, but social psychology, focusing on the analysis of the collective ties of people. The basis of economic development is the psychology of the team.

Thus, the institutionalists argued that economics should not be limited to the study of purely economic relations. For a complete and accurate picture of economic development, economists must study the most diverse aspects of human life, in fact, everything that, one way or another, affects the evolution of the economy. From a huge number of factors, they singled out such important factors for economic activity as the system of rights and legislation, the political and social structure of society, and social psychology. The heightened attention to factors of a non-economic nature led to a frequent non-economic interpretation of the causes and results of economic phenomena and processes, which should be considered as the most important feature of institutionalism.

2. Basic estages of development of institutionalism

Institutionalism in its development went through three stages:

First step - 20-30s 20th century Its founders were T. Veblen (1857-1929), J. Commons (1862-1945), W. Mitchell (1874 - 1948).

Second phase - post-war period until the mid-60s-70s. XX century The main representative of this period is J.-M. Clark (1884-1948). He published the book Economic Institutions and the Welfare of the People. The second representative is A. Burley, who published the works "Power without property" and "The capitalist revolution of the 20th century." The third representative is G. Minz. He wrote a series of articles in which he showed the growth in the number of shareholders in the company and the process of separation of capital-property from capital-function.

Representatives of this stage, studying demographic problems, developed the theory of the trade union movement, etc., and also focused, firstly, on ascertaining the socio-economic contradictions of capitalism and, secondly, on formulating and putting forward proposals for the implementation of reforms of the Roosevelt " new course."

Third stage - development of institutionalism - from the 60-70s. It entered the history of economic thought as neo-institutionalism. Its representatives are the American economists A. Nove, J. Galbert, R. Hoylbroner, J. Buchanan, as well as the Swedish scientist G. Myrdal. Separate ideas of institutionalism are found in J. Robinson, W. Rostow and others.

Representatives of this stage make economic processes dependent on technocracy, and also seek to find an explanation for economic processes in the social life of society. The latest developments of neo-institutionalists have become the "transaction cost theory", "economic theory of property rights", "public choice theory", etc.

Such heterogeneity has given rise to many currents and schools within this direction. They have a number of common features:

Criticism of capitalism from moral and psychological positions

In other words, they opposed the theory of "free enterprise".

3. The role of T. Veblen as the founder of instinstitutionalism, Veblen effect

The founder of institutionalism is T. Veblen. He based his analysis on the psychological interpretation of economic processes. Veblen opposed the psychology of the collective to the Austrian school, which considered the psychology of the individual. It is she, according to Veblen, that is the basis for the development of society. He constructed a psychological theory of economic development.

He analyzed economic phenomena from historical and sociological positions. He brought sociological questions to the fore.

So, the evolution of social structure is a "process of natural selection of institutions" in the "struggle for existence".

T.Veblen sees the scenario for the development of society in the steady acceleration of scientific and technological progress and the growing role of the intelligentsia. According to him, the intelligentsia, workers, technicians and other participants in production represent the sphere of "industry" and pursue the goal of optimizing and increasing the efficiency of the production process. They predetermine the growing dependence of “business” on the “industrial system”, the inevitability of the “paralysis of the old order” and the transfer of power to representatives of the engineering and technical intelligentsia.

As a result of the reforms, T. Veblen foresaw the establishment of a “new order”, in which the leadership of the country’s industrial production would be transferred to a special “council of technicians”, and the “industrial system” would cease to serve the interests of monopolists, since the motive of technocracy and industrialists would not be “monetary gain”, but serving the interests of the whole society.

Veblen paid much attention to the criticism of monopolies in his works. This criticism has brought confusion to the ranks of economists. As a result, economists split into two groups: a) into ideologues of a liberal-critical direction (institutionalists also belong to them), b) into supporters of monopoly capital.

4. Economy systemohmic views of J. Commons

Commons' system of economic views is characterized by the following feature: he considered the basis of the economic development of society to be legal relations, legal norms. Consequently, economic institutions (according to Commons) are categories of a legal order.

The object of Commons' research was institutions. To them he attributed the family, production corporations, trade associations, trade unions, the state.

The main works of Commons are The Legal Foundations of Capitalism (1924), Institutional Economics. Its Place in Political Economy (1934), The Economic Theory of Collective Action (1950).

In his research, Commons combined the theory of marginal utility with the "legal concept in economics." He saw all the vices of capitalism in the imperfection of legal norms. This imperfection leads to "unfair competition". He saw the solution to this problem in the use of the legal legislative bodies of the state. The state needs to improve the system of legislation and monitor the exact implementation of laws.

Commons developed the Theory of Social Conflicts. Its essence is as follows: society consists of professional groups (workers, capitalists, financiers, etc.). They conclude equal deals among themselves on the basis of legislative rules. In the process of interaction, these groups come into conflict with each other. The latter are the internal source of the movement of society. The deals include three things:

Conflict

Interaction

Permission

Overcoming conflict through legal norms leads to social progress.

Commons introduces the category of "property title" into scientific circulation. He divides property into three types: tangible, intangible (debts and debt obligations), intangible (securities). According to Commons, intangible property is most often the content of "transactions with titles of property". Therefore, the main object of Commons's research is the sale of securities.

The sphere of circulation is considered not as a real movement of commodities, but as a movement of property titles, i.e. like legal transactions. As a result, the entire development of the capitalist economy is seen by Commons as an expectation of future favorable deals.

5. W. Mitchell's research in economythe theory of institutionalism

Mitchell entered the history of economic science as a specialist in the study of cyclical phenomena in the economy. He dropped the term "crisis", replacing it with the term "business cycle". According to Mitchell, economic cycles are the result of many interrelated parameters. They determine the dynamics of production. These include investments, money circulation, prices, stock prices, trade, savings, etc.

As a result of his research, Mitchell came to the conclusion that it is necessary to regulate capitalist production. The best means of resolving the contradictions of capitalism, according to Mitchell, is state regulation. Mitchell shared the central idea of institutionalism about the need for social control over the economic component. In 1923, he proposed the creation of a state unemployment insurance system.

Mitchell's institutionalism also consisted in the collection of statistical data, so the United States is indebted to Mitchell, his students and followers for the large-scale deployment of descriptive economic statistics.

institutionalism market economy neoclassical

6. Basice doctrines of neo-institutionalism

Representatives of neo-institutionalism tend to use the traditional approaches of the neoclassical school to analyze the institutional aspects of a market economy.

There are two main approaches:

1. The approach of T. Veblen, who considered institutions as "rules of the game", including informal restrictions (traditions, habits, unwritten norms) and formal norms (laws, property rights).

2. The approach of representatives of the new institutional economy: institutions as a mechanism for coordination, management of contractual relations.

Representatives of the "new institutional economics" developed new directions and theories. This is the economic theory of property rights (R. Koda); public choice theory (J. Buchanan); economic theory of organization (D North, O. Widyamson, T. Simon); economic component in the social sphere (G. Becker).

The meaning of the theory of property is that property relations to a large extent form a system, determine the norms of relationships and behavior of people. Structuring property relations helps to ensure their own interests without violating others.

Any economic activity affects the interests and is accompanied by effects not only of some - direct participants, performers, but also to a certain extent of others - neighbors, citizens, society.

Developers of the theory of public choice believe that this area of science deals with the economic analysis of political activity. This theory has two main theses:

Detailed development of rules and procedures governing the adoption of laws, forms of control over finances, principles of taxation is required to reach agreement within the framework of "political exchange". This is a "construction of economic policy";

The practical activities of the state and its bodies on the basis of accepted rules and procedures.

Supporters of the theory of public choice do not deny the role of the state. In their opinion, it should perform protective functions and not take on the functions of participation in production activities. The principle of protecting order without intervening in the economy is put forward. Public goods are proposed to be converted into goods and services sold on the market. Economic agents enter into transactions, carry out contracts for mutual benefit without regulation by the state.

In a market economy, not only prices have a regulatory effect. An important role is played by the organization of production activities, the system of production and exchange management. According to Nart, organizations are created for specific purposes due to the fact that the existing set of restrictions creates opportunities for relevant activities; therefore, in the process of moving towards the goal, organizations act as the main agents of institutional change. In a broad sense, institutional organizations include the whole variety of organizational forms and structures - political, social and economic (firms, cooperatives, family farms) organizations. Institutionalists consider the firm as a typical form of organization in terms of economic conditions, goals, methods, results of activities.

A firm is a production unit for converting resources into products. The neo-institutional school views the activities of the firm as:

- "a network of contacts" that ensure the reduction of transaction costs (transactional theory of O. Williamson);

The system of internal organization, in accordance with which incentives are formed and decisions are made (behavioral theory of the company G. Simon);

A complex of various forms of entrepreneurial activity based on an ambiguous distribution of property rights (A. Alchian's typology of property rights and control).

The economic theory of organization is a multidimensional and, to a certain extent, interconnected approach to the analysis of the structure of a firm, its internal and external organization, and forms of activity.

Proponents of neo-institutionalism believe that the focus of economic science should be on the problems of exchange and organization, and not on the choice of rational ways of allocating resources.

The organization includes all the variety of forms and structures in order to reduce transaction costs. Transaction costs are associated with drawing up the subject of the contract, negotiating, and providing guarantees for the agreement.

The economic theory of organization is in its infancy. The conceptual apparatus is being developed, the methodology is being improved, the directions of analysis and topics are being specified.

Despite the well-known incompleteness of the economic theory of organization, noteworthy are the conclusions contained in the works of its representatives:

The study of the internal organization of the company from the standpoint of comparative analysis allows you to find more effective structures, forms and methods of distribution of rights and control. In economic practice, a kind of rivalry of organizational forms is taking shape. The choice between alternative forms of organization, as a rule, is reached on the basis of a compromise. Criteria for minimizing transaction costs play a decisive role. Competition in the market for organizational forms develops by fighting for the attraction of advanced technologies, reaching an agreement with rivals and incorporating them into the dominant firm.

The rational organization of the firm is associated not only and not so much with technologies or forms of ownership, but with specific operating conditions. With changes in the conditions of production activity, the forms of organization, production and marketing management systems also change. For each type of goods, for each industry, the most appropriate form of organization can be found.

The economic component in the social sphere was developed by Becker, who sought to find an "economic component" in those areas of social relations that were considered independent of the economy. In his works, he proceeded from the fact that economic considerations, weighing economic benefits and losses, play an extremely important role in making decisions and carrying out social activities.

Becker puts the so-called economic approach at the forefront, which he considers as a universal method of analysis, according to Becker, the economic approach expands the subject of economic theory, turning it into a unique tool for studying many different forms of human behavior.

Becker introduces the concept of "human capital", investments in human capital, primarily in the field of education, are more productive, the larger the size of previously made investments in tangible (physical) capital.

One of the ideas pursued by Becker is that a person, when making the most important decisions and in his behavior, is guided by considerations of an economic nature, although he often does not realize this. This provision is specified in the analysis of certain factors and situations.

For example, the trends in the development of the modern family have a significant impact on the economy, on economic growth. In turn, the development of the economy, the growth of the material level contribute to changes in the family unit, the structure of the family, the nature of the decisions made in it. Becker comes to the conclusion that laws adopted in the interests of supporting women and strengthening the family often produce results that are opposite to those expected.

Thus, one of the advantages of the new institutionalists is pragmatism, the maximum approximation to reality. Continuing the tradition and tools of the neoclassicists, the supporters of the new institutional theory seek to find and substantiate ambiguous approaches to the development of issues raised by the practice of social development.

Representatives of the neo-institutional direction oppose the idealization of the market mechanism; they deny the universal ability of the market as such to overcome contradictions and regulate the development of the economy.

Conclusion

Thus, we can conclude that the emergence of institutionalism as a new form of economic thought in the 20th century was far from accidental. It was determined by the entire course of the previous economic development of the country and the state of Western economic theory.

Institutionalism is characterized by the following provisions:

* basis of analysis method of describing economic phenomena;

* the object of analysis is the evolution of social psychology;

* the driving force of the economy, along with material factors, are moral, ethical and legal elements in historical development;

* interpretation of socio-economic phenomena from the point of view of social psychology;

* dissatisfaction with the use of abstractions inherent in neoclassicism;

* the need to strengthen the economic role of the state and expand state social programs;

* opposed the neoclassical doctrine of self-regulation of the market economy.

In its development, institutionalism overcomes three main stages: the first stage can be described as the emergence of a new economic trend, representatives of this stage are T. Veblen, J. Commons, W. Mitchell

T. Veblen can be considered the founder of institutionalism. He based his analysis on the psychological interpretation of economic processes. He analyzed economic phenomena from historical and sociological positions. He brought sociological questions to the fore. Veblen develops the theory of the "leisure class" and insists that only the intelligentsia, workers, technicians and other participants in production contribute to the optimization and increase in the efficiency of the production process.

Commons considered legal relations and legal norms to be the basis for the economic development of society. The object of Commons's research was institutions, and he also develops the Theory of Social Conflicts.

Mitchell entered the history of economic science as a specialist in the study of cyclical phenomena in the economy, collected statistical data, which allows us to speak about his contribution to descriptive statistics.

Neo-institutionalists make economic processes dependent on technocracy, and also seek to find an explanation for economic processes in the social life of society. The latest developments of neo-institutionalists have become the "transaction cost theory", "economic theory of property rights", "public choice theory", etc.

FROMlist of used literature

1. History of economic doctrines//ed. Advadze V.S., Kvasova A.S. - M.: Unity, 2004.

2. History of economic doctrines // ed. Ryndin M.N., Vasilevsky E.G., Golosova V.V. - M.: Higher school, 1983.

3. Novikova Z.T., Smirnov V.G., Chub A.A. History of economic doctrines - M .: Academic Project, 2007.

4. Sinelnik L.V. History of economic doctrines - M.: Knorus, 2010.

5. Khudokormov A.G. History of economic doctrines: the current stage - M .: INFRA-M, 1998.

6. Yadgarov Ya.S. History of economic doctrines - M.: INFRA-M, 2009.

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In the 19th century in Western Europe, and later in the United States, a new direction of economic thought arose - institutional and social. Its representatives set themselves the task, firstly, to act as opponents of the defenders of monopoly capital and, secondly, to develop a concept for protecting the middle class through reforming, first of all, the economy. The fundamental difference between the institutional and social direction from the classical and Austrian schools consisted mainly in the non-economic explanation of the essence and driving forces of social development, the description and systematization of social phenomena called "institutions". Unlike the Austrian school, which studied the behavior of individuals, representatives of the institutional and social direction proceeded from "group psychology", believing that social customs, mores, ways of thinking of people determine the development of society. For the first time, such an approach to the analysis of the evolution of society was applied in the works of representatives of the German historical school.

The founder of the German historical school was the economist, publicist and politician Friedrich List (1789-1846). economic policy; put forward the idea of a “national economy” and specific laws for the development of production in a single country, taking into account the place and time of their action; declared the subject of political economy "national economy", and its task - the development of recommendations for improving the economic situation of the nation, taking into account its historical and national characteristics; proposed a program for the economic development of Germany, aimed at industrial development under the tutelage of protectionism. List developed the theory of productive forces and created the doctrine of the stages of the economic development of a nation. All his theories worked for one idea - to substantiate the need for state support for the development of manufactories and industry in the interests of the progress of national production and the increase of national wealth.

Justifying ϲʙᴏ and positions, Liszt widely used the historical method as a tool to prove the correctness of ϲʙᴏ their views. List's idea of a "national economy", i.e. about the possibility of using political and economic ideas in economic practice, taking into account historical conditions, national interests, traditions, the geopolitical position of the country, was supported by German economists - representatives of the so-called old historical school - Wilhelm Roscher (1817-1894), Bruno Hildebrand (1812-1878 ) and Carl Gustaf Knies (1821-1898)
It is worth noting that the main criticism of economists-historians was directed against the methodological principles of the classical school and, first of all, against the abstract method of cognition; ideas about the inevitability and repetition of objective economic laws of management; the concept of "economic man"; ideas of "natural order".

"Historians" studied the national economy, taking into account the historical development of the country, comparing individual forms and details. The representatives of the young, or new, historical school, Gustav Schmoller (1838-1917), Adolf Do not forget that Wagner (1835-1917) and Karl Bucher (1847-1930)

It is worth noting that they argued that the task of economists would be to study not theoretical constructions, but practical problems of the development of the country's national economy, study the impact of data, psychological, legal and political factors on economic relations, develop specific recommendations for managing the country's economy in ϲᴏᴏᴛʙᴇᴛϲᴛʙ and with interests and needs practices.

The merit of the economists of the historical school was the substantiation of the relationship between economic and social relations, attention to the quantitative analysis of economic processes, raising the question of the need for applied research with access to economic practice. At the same time, if the old historical school opposed classical political economy and utopian socialism, then the young historical school took shape in the struggle against scientific socialism. At the same time, recognizing the possibility and inevitability of socialism, representatives of the young historical school, in particular G. Schmoller, believed that it would arise not as a result of a proletarian revolution, as K. Marx predicted, but on the basis of the reformist activity of the monarchy, coupled with educated workers. It was this kind of socialism that was called katheder-socialism, since university departments became the main place for the propaganda of socialism. Its representatives (L. Brentano, A. Do not forget that Wagner, G. Schmoller, W. Sombart) called on the workers to abandon the political, and even more revolutionary struggle, to replace it with economic activity in the ranks of the trade union and cooperative movement.

American institutionalism has become a kind of heir and successor to the main concepts of the historical school. The methodology of institutionalism was based on descriptive-statistical, historical-genetic, legal and moral approaches to the analysis of economic phenomena. The object of the study was "institutions" (social psychology, i.e. motives of behavior, ways of thinking, customs, traditions, habits) and "institutions" (family, state, monopolies, trade unions, etc.) Institutionalists questioned the basic postulates classical political economy: the rationality of individual behavior, the automatic achievement of the optimal state of the economic system, the identity of private property interest to the public good. It is worth noting that they insisted that the object of study in economic theory was not a rational, but a real person, often acting under the influence of fear, poorly conscious aspirations and pressure from society. Institutionalists rejected the main postulates of the orthodox theory of economic liberalism, and above all the idea of "harmony of interests" under capitalism; marginalist concepts of cost and pricing; assessment of free enterprise as the basis of the economic system of capitalism; abstract-deductive constructions in economic theory.

Institutionalism includes the following areas:

socio-psychological, headed by T. Veblen;
socio-legal, headed by D. Commons;
opportunistic-statistical (empirical) led by W. K. Mitchell;
sociological, headed by J. K. Galbraith.

The first, socio-psychological direction of institutionalism received its ϲʙᴏe name according to the concept of Thorsten Veblen (1857-1929), according to which the driving forces for the development of society will be psychological and sociological elements. To the Austrian school, which considered the psychology of the individual, Veblen opposed the psychology of the collective. It is she, according to Veblen, that will be the basis for the development of society.

He constructed a psychological theory of economic development.

In other words, the methodological basis of Veblen's research was the non-economic interpretation of economic phenomena. Chief among them are human instincts: the instinct of mastery, parental feeling, idle curiosity. In his work “Let's note that the theory of the leisure class” (1899), Veblen rejected the attempts of economists to simplify reality and reduce human behavior to a system of equations, refuted the idea of “economic man”, i.e. about a person acting as a subject of utility maximization. Veblen explained people's behavior by subconscious motives, instincts, mores, and customs. It is worth noting that he emphasized, for example, that the idle class is not only useless for society, but also harmful:

his conspicuous material consumption swallows up the growing efficiency of production;
he takes a conservative position in society and opposes changes in public life;
ϲʙᴏand the canons of lifestyle, the "money stereotype" of existence imposes on the whole society.

The main contradiction of capitalism, according to Veblen, will be the contradiction between industry and business. He referred to industrialists all participants in production and, first of all, engineers and workers. The purpose of the industry will be to increase the efficiency of production and increase the wealth of society. To the world of business, Veblen attributed financiers and entrepreneurs, the goal of which would be profit. Business has taken over the industry. The contradiction between them is the cause of all the vices of society.

To overcome the shortcomings of the "monetary civilization" Veblen proposed the idea of social control over the economy. It is worth saying that for its implementation it is necessary:

state intervention in the economic mechanism;
liquidation of the property of the financial oligarchy; 3) subordination of all production in the country to a special body - the “council of technicians”.

A different view of the future of society belonged to another representative of the school of institutionalism - John Commons (1862-1945). Two features are inherent in his views:

Commons considered legal relations and legal norms to be the basis of the economic development of society - therefore, economic institutions will be categories of a legal order;
Commons expressed the interests of the labor aristocracy, i.e. only parts of the middle class.

In their research, Commons combined the theory of marginal utility with "the legal concept in economics." He saw all the vices of capitalism in the imperfection of legal norms. Commons developed the theory of social conflicts. Its essence is as follows: society consists of professional groups (workers, capitalists, financiers, etc.). It is worth noting that they conclude equal deals among themselves on the basis of legislative rules. In the process of interaction, these groups come into conflict with each other, which will be the internal source of the movement of society. Transactions include three points: a) conflict; b) interaction; c) permission. Overcoming conflicts through legal norms leads to social progress.

Being a staunch opponent of Marxism, Commons believed that the contradictions between the interests of entrepreneurs and workers can be resolved peacefully, through negotiations, collective actions of workers and entrepreneurs, legal agreements, court decisions. Under ϶ᴛᴏm, the leading role in the social adaptation of society is played by collective institutions: trade unions, courts, government commissions, etc.
It is worth noting that Commons paid special attention to the role of corporations, trade unions and political parties in the procedure for establishing consistency in the actions of individuals. It is worth noting that he introduced the concept of an "operating collective institution" as a regulator of people's economic behavior. Based on all of the above, we come to the conclusion that Commons did not seek to change existing social relations and was looking for an approach to resolving social differences on the basis of an agreement between the conflicting parties. Therefore, Commons' institutionalism is called socio-legal.

Commons tried to put his views on the nature of collective action into practice by actively cooperating with the American Federation of Labor. Under his influence, in 1935, the Social Security Act was passed, which laid the foundation for pensions in the United States.

The founder of the conjunctural-statistical direction of institutionalism was the American economist Wesley Clare Mitchell (1874-1948). It is worth saying that he widely used statistics to prove the provisions of institutionalism. On the basis of an empirical approach to the study of economic processes, Mitchell denied causal relationships and theoretical generalizations. It is worth noting that he is known primarily as a specialist in the field of analysis of economic cycles and conjuncture.

According to his views, cyclical development is not an accidental phenomenon, but a permanent feature of the capitalist economy. Business cycles are recurring ups and downs, which will stay in most economic processes with a sufficiently developed system of money management and last an average of three to seven years. It must be remembered that such ups and downs Mitchell called small cycles, or small waves.

In addition to them, according to Mitchell, there are "big business cycles", i.e. cycles of secular (centenary) order - long waves. Both types of these cycles are in interaction. Referring to the diversity and uniqueness of each of the economic cycles, Mitchell denied the possibility of creating a general theory of the cyclical development of the economy. It is worth noting that he interpreted economic cycles as a product of the "money economy" at its advanced stage. Mitchell leaned towards the theory of a crisis-free cycle, considering the latter as a more or less smooth change of conjunctural waves. Mitchell shared the main idea of the institutionalists about the need to strengthen social control over the economy. In connection with the data, in 1923 he proposed the creation of a system of state unemployment insurance in the United States. Then ϶ᴛᴏ was considered an attempt on the ϲʙᴏboda of entrepreneurship.

Mitchell was one of the very first to propose to implement the indicative, i.e. advisory, economic planning. Gradually, institutionalists began to consider the same problems as other economic schools, but from a broader angle, taking into account various political and sociocultural interests.
It should be noted that special attention has been paid to the concepts of social efficiency and social costs. After the Second World War, pure institutionalism went into decline, but in a slightly different form was revived in the writings of John Kenneth Galbraith (1908-2006). including scientists, designers, specialists in technology, management, finance and everything that is required to ensure the normal operation of large corporations. Reflecting on the peculiarities of the behavior of the modern market economy, Galbraith came to the following conclusions.

In corporations, the real power is not the owners, but the infrastructure. According to Galbraith, power always "passes to that factor of production which is the least available and the most difficult to replace." First ϶ᴛᴏ was land, then capital, and now ϶ᴛᴏ "a collection of people with a variety of technical knowledge, experience and abilities that modern industrial technology and planning needs." The power of the technostructure is faceless, since all decisions are developed gradually and collectively, taken in stages through complex agreements. The top management of the corporation exclusively coordinates the ϶ᴛᴏt process. Note that the technostructure is forced to plan the work of the corporation for years ahead. Only under this condition can contracts be concluded in advance for scientific and design development, the supply of raw materials, components, etc. It should be noted that the technostructure is interested not so much in maximizing returns on capital as in ensuring a strong position of the corporation in the market, in creating conditions for the owner to need infrastructure services.

Analyzing the evolution of capitalism, Galbraith came to the conclusion that over the past hundred-plus years, four processes have developed that K. Marx could not foresee.

The growth of trade unions, which have done a lot to equalize the position of employers and workers in resolving social conflicts.
The emergence of the "welfare state", which began in Germany in 1870, continued in Great Britain in 1910-1911. and in the United States in 1935, when the Social Security laws were passed.
State regulation of the economy according to the "recipes" of J. M. Keynes.
The disappearance of the old-fashioned capitalist was replaced by the manager - the corporate bureaucrat.

Based on all of the above, we come to the conclusion that according to Galbraith's theory of industrial society, capitalism is being transformed into an industrial society, devoid of many of the shortcomings of capitalism. Corporations define the face of the ϶ᴛᴏth society.

The activities of corporations are aimed at achieving the highest production success. It is worth noting that they plan output, costs, prices and need the regulatory role of the state. According to Galbraith's theory, there is a social degeneration of capitalism as a result of the redistribution of the wealth of society in favor of the lower and middle strata.

As a result of the “income revolution”, social groups are being leveled and a “society of abundance” is being created.

The result of the latest developments of institutionalists are: the theory of the stages of economic growth by Walt Rostow; the theory of transaction costs by R. Coase; theory of money, market fluctuations, mutual influence of economic, social and structural processes of G. Myrdal.

As a direction of economic thought, institutionalism is quite vague, contains many trends and schools. At the same time, for all the many shades of views of representatives of institutionalism, they have a number of common features. First of all, criticism of capitalism from a moral and psychological standpoint. Secondly, the development of recommendations for reforming the economy from the standpoint of social control and regulation by the state. Thirdly, an interdisciplinary approach to the study of economic processes, which involves the inclusion in economic analysis of such disciplines as law, psychology, biology, and a number of others.

1 Causes of institutionalism.

Institutionalism (from Latin institutio - "custom, instruction") is a direction of economic thought that was formed in the 20-30s of the XX century to study the totality of socio-economic factors (institutions) over time, as well as to study the social control of society over the economy.

This trend got its name after the American economist W. Hamilton in 1916 first used the term "institutionalism".

The reasons for the emergence of institutionalism include the transition of capitalism to a monopolistic stage, which was accompanied by a significant centralization of production and capital, which gave rise to social contradictions in society.

2 Stages of development of institutionalism.

There are three stages in the development of institutionalism.

The first stage - 20-30s of the XX century; it is characterized by the formation of the main provisions of institutionalism; the founders of this stage are T. Veblen, D. Commons, W. Mitchell.

Theorists of this direction explore the totality of socio-economic factors over time and study the possibilities of social control of society over the economy. The object of study is "institutions". Institutions are the primary elements of the driving force of society, considered in historical development. The institutions include:

public institutions - family, state, legal norms, monopoly, competition, etc.;

concepts of social psychology - property, credit, income, tax, customs, traditions, etc.

Within the framework of this trend, socio-psychological (Veblen), social-legal (Commons) and institutional-statistical (Mitchell) directions were formed.

The second stage is the middle of the 20th century; demographic problems, socio-economic contradictions of capitalism were studied, the theory of the trade union movement was developed; typical representatives are J. M. Clark, A. Burley, G. Minz.

Theories of industrial society (J.Gelbraith, R.Aron, W.Rostow, S.Kuznets) - 50-60s. 20th century. Scientific and technological progress automatically leads to the overcoming of social contradictions, conflict-free social evolution. The type of society is determined by the level of technical, industrial development, considered in isolation from its socio-economic parameters.

Theories of post-industrial society - 60s. 20th century Post-industrial society is considered as a stage of social development following the industrial society. Its basis is the technique of production, sectoral and professional division of labor. The service sector, science and education are playing a leading role. Corporations are losing their leading positions to universities, businessmen - to scientists, professional specialists.

Radical economists (G. Sherman, E. Kant, T. Weiskopf) - 60s. 20th century They express the interests of certain petty-bourgeois, middle strata, they strive to approach the study of economic problems in a comprehensive manner, considering economic factors in close connection with sociological, psychological, and political ones. Economic analysis is carried out through the prism of "institutions", which include: private property, private property, labor market, people. They oppose income inequality, the concentration of wealth in the hands of a few, racism, militarism, the deterioration of the ecological balance.

The third stage - 60-70s of the XX century; this stage is called neo-institutionalism, in which economic processes are made dependent on technocracy, and the importance of economic processes in the social life of society is explained; prominent ideologists of this stage are N. Nove, R. Heilbroner, R. Coase.

Institutionalism is characterized by the following provisions:

the basis of analysis is the method of describing economic phenomena; the object of analysis is the evolution of social psychology;

the driving force of the economy, along with material factors, are moral, ethical and legal elements in historical development;

interpretation of socio-economic phenomena from the point of view of social psychology;

dissatisfaction with the use of abstractions inherent in neoclassicism;

striving for the integration of economic science with the social sciences;

the need for a detailed quantitative study of phenomena;

protection of the antimonopoly policy of the state.

3 The main representatives of institutionalism.

Thorstein Veblen (1857 - 1929), American economist and sociologist. Born into a peasant family. Graduated from Yale University (USA). In 1899 he published The Theory of the Leisure Class and a year later became a junior professor at the University of Chicago. He was also a professor at Stanford and Missouri Universities. In the early 1920s, T. Veblen moved to the New School for Social Research.

The main works of T. Veblen are considered to be "The Theory of Business Entrepreneurship" (1904), "The Instinct of Mastery and the Level of Development of Production Technology" (1914).

T. Veblen considered the psychology of the collective to be the basis for the development of society. Based on this position, he formulates the psychological theory of economic development - it is necessary to interpret economic phenomena from sociological and historical positions. The model of "economic man" A. Smith, according to T. Veblen, is hopelessly outdated. Man is not a machine for calculating sensations, therefore it is impossible to represent human behavior in the form of mathematical equations. The economic behavior of a person depends on the norms of behavior, traditions, parental feelings, the spirit of rivalry, subconscious motives, etc. T. Veblen identified the laws of the development of society with biological laws and stood on the positions of the evolutionary development of society. Later this direction was called Darwinism.

T. Veblen introduced the concept of "prestigious consumption", called the "Veblen effect". Prestigious consumption is typical for large owners. Goods for this class are valued by the extent to which possession of them (goods) distinguishes a person from others. This conspicuous consumption is a confirmation of success and forces the middle class to imitate the behavior of the rich. Hence T. Veblen concludes that the market economy is characterized by wastefulness, envious comparison, underestimation of productivity.

The main contradiction of capitalism, according to T. Veblen, is the contradiction between industry and business. Industrialists include engineers and other participants in the production process. Their goal is to increase the efficiency of production and increase the wealth of society. Businessmen include financiers and entrepreneurs. Their goal is to maximize profits. Business dominated industry. T. Veblen was a supporter of industrialists and an opponent of businessmen, that is, a technocrat. He believed that the future belongs to a society freed from business and functioning in the interests of the entire society. To resolve the contradiction, T. Veblen proposed to hold an act of protest of engineering and technical workers.

T. Veblen can rightfully be attributed to the founders of the science of "economic sociology".

The main work of John Commons (1862 - 1945) - "Institutional Economics" (1924), which discussed the impact on economic behavior of "collective action". The author paid great attention to the study of the role of corporations and trade unions and their influence on people's behavior. J. Commons defined value as the result of a legal agreement between "collective institutions" (unions, corporations, political parties, etc.). The transaction, according to J. Commons, is a conflict resolution by establishing an agreement that suits all participants in the transaction. Transactions increasingly involve trade unions and employers' unions rather than individual workers and employers. The role of the state in this case is not only in arbitration, but also in the mechanism that forces the fulfillment of obligations assumed under the contract. The scientist spoke about the need to create a government of representatives of "collective institutions", which would be accountable to public opinion. The reforms of such a government would eliminate conflicts in society.

J. Commons laid the foundations for pensions, which were set out in the "Social Security Act", adopted in 1935.

Wesley Clair Mitchell (1874 - 1948) was interested in cyclical phenomena in the economy. From the works of W. Mitchell, "The History of Green Tickets" (1903), "Business Cycles" (1913) are widely known. Cycles in the economy are the result of the action of many interrelated factors (investment, money circulation, stock prices, savings, etc.) in dynamics. The business cycle, according to W. Mitchell, is recurring ups and downs that manifest themselves in most economic processes with a sufficiently developed system of money management, do not decompose into any other waves with an amplitude approximately equal to their own amplitude, and continue in countries standing at different stages of economic development, from 3 to 7 years.

The only mechanism for resolving social contradictions is state regulation in the field of monetary, financial, credit factors, combined with socio-cultural problems.

In his research, the scientist widely applied statistical methods, which allowed him to make the first forecasts of economic growth.

In 1923, W. Mitchell proposed a system of state unemployment insurance.

John Kenneth Galbraith is an American economist and professor at Harvard University.

General characteristics of American institutionalism.

Institutionalism arises and becomes widespread in the United States in the 20-30s of the twentieth century. The United States during this period became the leading industrial power. The main component of success was the various technical innovations widely used in production, supported by the government. Almost all scientific and technical discoveries of the late XIX - early XX century. (power plants, streetcars, automotive, telegraph) were used in American industry. New methods of trade were formed, focused on meeting a variety of needs based on advertising.

At the same time, rapid economic growth was accompanied by the strengthening of monopolistic tendencies and the dominance of highly concentrated industries in the markets. The dominance of big capital appeared, the specific features of which contrasted sharply with the model of the individual economy, which was the starting point of the neoclassical approach.

In the American market system, sharp social contradictions arose during this period between workers and entrepreneurs. At the same time, new social groups were being formed within the framework of the "middle class", demanding the protection of their interests through economic reform.

As in most other Western countries, economics in the United States at the beginning of the 20th century was dominated by ideas of economic liberalism. Active intervention of the state in the economic life of society was considered unacceptable, and capitalism was seen as a stable self-regulating system capable of achieving and ensuring equilibrium in the market, eliminating unemployment, and preventing protracted crisis situations. A necessary condition for economic and social progress was considered private property and free enterprise, protected by law. At the center of the liberal concept was the "economic man", and the most important methodological device was individualism - the analysis of the actions of an isolated, rationally acting subject.

Since its inception, institutionalism has developed as an oppositional critical trend in Western science, requiring the reform of official economic science in the following areas:

creation of a new behavioral model "homo economicus" ("economic man"); revision of the market model of "perfect competition"; rejection of the equilibrium approach to the study of economic processes.

Institutionalists criticized the neoclassical school, firstly, for the narrowness of the original methodology, ignoring the role of sociological, political, socio-psychological factors in the functioning of the economic mechanism, and secondly, for ignoring the most important structural institutional features of the real economy.

It is necessary to single out the main methodological principles of institutionalism, common to all supporters of this direction:

The first is the principle of holism or an interdisciplinary approach associated with the very object of study - institutions, structural and functional aspects of the economic system as part of the social mechanism. Such problems involve expanding the scope of economic analysis by introducing elements of other social disciplines - sociology, political science, psychology, law, ethics, etc.; Another methodological principle proclaimed by the institutionalists - the principle of historicism - is expressed in the desire to identify the driving forces and factors of development, the main trends in social evolution, as well as to justify a targeted impact on the prospects for social development.

Most institutionalists did not limit themselves to criticizing the market system, offering various options for reforming it from the standpoint of "social control" over the economy - society's control over business, subordinating it to public interests.

compressed

Characteristic features of institutionalism:

The basis of the analysis is the method of describing economic phenomena;

The object of analysis is the evolution of social psychology;

The driving force of the economy, along with material factors, are moral, ethical and legal elements in historical development;

Interpretation of socio-economic phenomena from the point of view of social psychology;

Dissatisfaction with the use of abstractions inherent in neoclassicism;

Striving for the integration of economics with the social sciences;

The need for a detailed quantitative study of phenomena;

Protection of the antimonopoly policy of the state.

Stages of development of institutionalism

There are three stages in the development of institutionalism.

The first stage is the period of widespread institutionalism in the 20-30s of the 20th century. - the old negative school of institutionalism. Its founders were T. Veblen (1857-1929), J. Commons (1862-1945), W. Mitchell (1874-1948). During this period, the theoretical and methodological foundations of institutionalism are formed;

The second stage is the post-war period until the mid-60s-70s of the twentieth century. The main representatives of this period are J. M. Clark, who published the book “Economic Institutions and the Welfare of People”, A. Burley, who published the work “Power without Property”, G. Minz, who stated in his articles the growth in the number of shareholders and the process of separation of capital-property from the capital-function;

There were three stages in the development and evolution of institutionalism as an influential trend in modern economic theory. Each of them is characterized by its own specifics, and they ended with the emergence of new research programs. At each of these stages, a connection was found between the diversification of theoretical knowledge and the effectiveness of its use in practice at the micro and macro levels. Table 2.5 presents the stages of development of institutionalism in connection with the peculiarities of the diversification of institutional analysis. There are two hypotheses in the scientific literature about the impact of this diversification on the effectiveness of economic policy:

1) diversification has a positive effect on the development of economic analysis in general and institutional particular, and also establishes a variety of economic policy instruments;

2) the effect of diversification largely depends on the choice of its direction, the internal structure of institutional analysis.

Table. 2.5. Diversification of institutional analysis

The end of the table. 2.5

Characteristic	Stages of formation and development of institutionalism
Characteristic	Stage I: 1900-1930	Stage II: 1940-1960	Stage III: 1970-2000
	The emergence of three trends in institutional theory: Socio-Psychological; Socio-legal; Conjuncture-Statistical	Development of the methodology of neo-institutional schools: Suspile Choice; Transaction Expenses; property rights; agents and agency agreements; Group theory, etc.	Completion of the design of neo- and non-tituational schools. Development of evolutionary economics: Technologies; Institutes; Microagents; macro agent
Results from position: a) economic theory; b) economic policy	New areas of socio-economic analysis. No policy results	Development of the methodology of institutional analysis. Strengthening the state and activating social policy	Crisis of the theory and paradigm of modern economy. The Problem of Institutional Regression, Transmission Mechanism and Dispersed Reality in Economic Policy
Prospects for diversification and its objective necessity	Defined by Veblen: Historical evolution of public institutions; Social and industrial development, family economics; Evolution of technical knowledge (technology) Commons noted and Mitchell: Contract and transactions; Ownership; Business cycles	Horizontal diversification, due to the expansion of the subject of neo-institutionalism, the emergence of theories of social development. Vertical diversification driven by economic imperialism	Interdisciplinary approach, search for a holistic methodology of economic research. Combining the "old" and the new institutionalism. Development of the transmission mechanism of economic policy and the use of the apparatus of Evolatsionnoi economics

Source: Sukharev O.S. Institutional Theory and Economic Policy: Toward a New Transmission Theory in Macroeconomics. - Prince. 1. - M Economics, 2007. - S. 245.

The first stage covers the period from the second half of the 90s of the XIX century. until the 40s of the XX century. and is characterized as a stage in the formation of "old" (classical) institutionalism in the works of its Anglo-American founders and leaks to neo-institutionalism in the pioneering works of R. Coase. At this stage, a noticeable distinction is made between the theoretical and methodological foundations and program goals of institutionalism and other areas and schools of economic theory, primarily neoclassical.

The second stage covers the period of 40-60s of the XX century. It is characterized by the continuation of criticism of the methodology of the neoclassical direction of economic theory and the development of the traditional institutional methodology itself. At the same time, the methodology of various neo-institutional theories is developing, they are at the stage of formation (transaction costs, public choice, property rights, etc.). In the field of socio-economic policy, traditional institutionalism and Keynesianism actively interact during the approval of the leading role of the Keynesian-neoclassical synthesis. It is believed that the last term was introduced into scientific circulation in 1955 by the outstanding American scientist P. Samuelson.

A. Sukharev calls the second stage in the development of neo-institutionalism the stage of concentration of "institutional intelligence", given that various methods of state regulation of the economy, indicative planning, and a program approach in the formation and solution of social development problems were widely used during this period.

There was both a horizontal diversification of institutional analysis, associated with the expansion of the problem of neo-institutionalism, and a vertical diversification in connection with the phenomenon of economic imperialism (interdisciplinarity of research).

The third stage in the development of modern institutionalism covers the period of the 1970s. - The beginning of the XXI century. It is characterized by the active development of a number of theories of traditional institutionalism and neo-institutionalism in the context of the transition from an industrial to a post-industrial (information) society, world economic crises in the early 70s and 80s of the last century, and the collapse of the world socialist system in the early 90s. Significant shifts are taking place in traditional institutionalism. First, they are connected with institutionalism's underestimation of the accumulation of oppositely directed changes in the socio-economic structure of an industrial society during its transition to a post-industrial one and in mass psychology. Representatives of traditional institutionalism (J. Galbraith, R. Heilbroner, etc.) could not assume that "social and economic crises in the late 60-70s will not only not strengthen the trend towards stateization, socialization, but, on the contrary, will lead to the verge of 1970-1980 until the turn towards denationalization, decentralization, partial dismantling of social programs ".

Professor Yu.Ya. Olsevich considers such an obvious prognostic failure as a manifestation of the crisis of institutional concepts in the 70-80s of the XX century, due to two reasons: the first was the static nature of the concepts, their failure to take into account changes in the characteristics of the economic system; the second is bias in the process of building institutional theoretical models. The scientist came to the conclusion that if the issue of overcoming static is discussed within the framework of institutionalism itself, then the second accusation violates the foundations of institutional economic theory.

Secondly, representatives of modern institutionalism are trying to use and combine, on a methodological basis, various approaches to the problems of economic evolution. J. Hodgson (Great Britain) and B. Screpanti (Italy) commented on the fact of creation in 1988. European Association for Evolutionary Political Economy: "Although the leading representatives of the Veblen-Commons tradition in American institutionalism can claim parental rights and were present when this association was born, its founders understood the lack of a corresponding tradition of institutionalism in Europe ... As a result, within the association and its conferences, they found place different European trends and schools.For example, the influence of Marxism remains significant.For others, teachers can be N.Kaldor, M.Kaletsky and J. Keynes (that is, representatives of Keynesianism - Auth.).In addition, they also approved of the impulses coming from the Austrian school. their influence can be traced together with the influence of such prominent thinkers as N. Georgescu-Rogen, G. Myrdal, K. Polanyi, J. Schumpeter and T. Veblen ".

As a result of this development of modern institutionalism, many economists, as noted in the scientific literature, combine various doctrines and speak of institutional-evolutionary theory, while others prefer to single out an evolutionary direction in institutional theory and, in addition, pay special attention to the difference between the "old" and "new" institutionalism. A. Sukharev sees the problem of such disagreements in the significant methodological difficulties experienced by the analytical system of institutionalism. They find themselves on the verge of excessive demands within the framework of the research program and high complexity, heterogeneity of the social world.

Let us draw some general conclusions that apply to all stages of the development and evolution of institutionalism.

1. Institutional economic theory, like all other theories of economic science, has developed and continues to develop under the decisive influence of socio-economic reality. Of particular importance were significant negative phenomena and processes on a global scale, including the Great Depression of 1929--

1933, world economic crises of the 70s-80s, stagflation, energy and other structural crises of the 70s of the XX century, World financial crisis of 1997-1998. Significant shifts took place in the economy and society, new development trends appeared, under the influence of which not only institutionalism, but also all other economic theories were rebuilt, new concepts were put forward.

2. The development of institutionalism reflected the complementary nature of various areas of modern economic science - Keynesianism, post-Keynesianism, neoliberalism, institutionalism and others, which, in turn, reflect various aspects of the national economy, the specific conditions for its functioning and development. The practical recommendations of the various theories that make up the aforementioned areas were often used simultaneously, albeit to varying degrees, in the same countries. However, this did not lead to the disappearance of contradictions between the theories of various trends and schools of economic thought.

3. New trends in the development of the economy of developed countries and the world economic system in the last third of the 20th century. were accompanied by the crisis of the Keynesian-constitutionalist system of market regulation and the development of monetarism. However, already in the mid-1990s, the failures of market reforms in Ukraine and other post-Soviet countries that carried out market transformations on the recommendations of monetarists, and the success of reforms in those countries (China, Vietnam) that are radically reforming the economy according to their own programs and moving to a socialist market economy became obvious.

Phenomena in the development of the economy of developed and post-socialist countries discredit monetarism and contribute to the activation of alternative economic theories of institutionalism.

4. The development of institutionalism in the second half of the XX century. was accompanied by an increase in tendencies towards the synthesis of individual economic theories and areas of economic science. The combination of Keynesianism with neoclassicism led to the emergence of various variants of the Keynesian-neoclassical synthesis, on which the successful economic policy of developed Western countries was generally based until the 1970s. Neo-institutionalism has been formed and is rapidly developing as a result of the synthesis of institutionalism and neoclassicism. The formation and development of evolutionary economic theory takes place on the basis of a combination of the provisions of a number of areas of economic science - from Anglo-American and traditional institutionalism to Marxism.