Reflections of an Institutional Economist: Charles Whalen, Part I

By
Dr. Charles Whalen is a visiting scholar at the Baldy Center for Law and Social Policy, University at Buffalo, and served as the 2018 president of the Association for Evolutionary Economics, an international organization for economists and other social scientists seeking to advance the institutionalist tradition. In subsequent blog posts, we share his reflections on his four decades of studying and working in the institutionalist tradition, prepared as part of a two-day exploration of institutional economics, convened at Michigan State University, May 16-17, 2019. This is the same meeting at which Eric Scorsone and I were able to interview Dr. Daniel Bromley about his career in economics (available here), with the hopes of preserving some of these stories for future cohorts to come.  Whalen's remarks are summarized here in four parts: Beginnings; The Nature of Institutional Economics; John R. Commons’s Continuing Relevance; and Assessing the Economy, and will be released each Monday from February 10th to March 2nd, 2020.

Part I: Beginnings

By Charles Whalen


Circumstances over the past few years have caused me to reflect on my career as an institutional economist. This first installment describes how it all started.

I was raised in a blue-collar community outside Boston. My dad worked as a machinist; my mom, who learned English as a second language, was an office worker. By the time I graduated from high school in the late 1970s, factories were closing across the Northeast, real wages and employee benefits were eroding, and unions were struggling to survive.

I was the first in my family to attend college. As an undergraduate at Cornell University, I studied labor relations and economics with the aim of someday helping to shape policies that would ensure opportunities for working families and those struggling to find work. Much of economics struck me as designed mainly to provide intellectual support for folks like Ronald Reagan, who argued that government and unions were actually the problem. Still, I decided that economics was important to master because it was a weapon used against workers: to be their defender, a solid knowledge of the opposition’s weaponry seemed essential.

Since serving as a policy adviser appeared to require a graduate degree, I graduated a semester early from Cornell and immediately began a doctoral program in economics at The University of Texas at Austin. I chose Texas for two main reasons: (1) it was one of the few graduate economics programs that presented a wide range of economic perspectives including institutional economics, a tradition introduced to me in undergraduate labor courses; and (2) it was the home base of Ray Marshall, who served as Secretary of Labor for President Jimmy Carter and whose way of thinking was unmistakably in the institutionalist tradition of John R. Commons.[1] Although my parents didn’t quite understand why I needed another university degree, they were supportive—and I completed my Texas degree under the supervision of a committee headed by Marshall.

In September of 1985, when I was wrapping up course work and beginning to think about my dissertation, the Journal of Economic Issues published an article by Kenneth Parsons on the continuing relevance of Commons’s ideas.[2] In the article, Parsons writes that Commons once responded to graduate students as follows on the question of what kind of research university professors should do: “As a young man, I decided that I was for whatever helped the common man. What one does with his life depends upon his ethical assumptions and the kind of a life he wants to lead. I have had a good time.” Parsons adds: “This interest matured into a lifetime devoted to an understanding of the U.S. economy in ways that could support the humanization and stabilization of the U.S. economy, without, I should add, impairing the productivity of the system.”[3]

Reading those words, I felt confident that I was on the right track in pursing a career as a labor economist in the Commons tradition. Meanwhile, back in Massachusetts my dad and his co-workers found themselves training workers from abroad and then shipping the factory machinery overseas. The American workers eventually lost their jobs, and later my dad and his co-workers lost their healthcare and retirement benefits as well.

We’re all influenced by the experiences of our youth and young adulthood. Because of mine, I decided early on that I wanted to be a professor in the tradition of Commons, giving special attention to the problems of unemployment, rising worker insecurity, and the exclusion of workers’ voices from economic decision-making. In the posts that follow, I’ll share some of what I’ve learned along the way.



[1] Commons (1862-1945) was a pioneer in the field of labor economics and major early contributor to institutional economics; see John Dennis Chasse, A Worker’s Economist: John R. Commons and His Legacy from Progressivism to the War on Poverty (New York: Transaction Publishers, 2017).
[2] Parsons was a student of Commons, and the Journal of Economic Issues is published by the Association for Evolutionary Economics.
[3] Kennth H. Parsons, “John R. Commons: His Relevance to Contemporary Economics,” Journal of Economic Issues (September 1985), 755-778.

Comments

Post a Comment

Popular posts from this blog

Veblens Instinct of Workmanship pg. 234-240

By
 This section starts with Veblen stating that in the handicraft era, the individual craftsman is again the dominant force in the economy.  This in turn implies three key facts that are important to Veblen.  The first key fact is that the instinct of workmanship is an important element in how humans think and act again. we can perhaps think here that the instinct of workmanship is less contaminated by other instincts in the handicraft era. Another key piece is that the "common stock of technological knowledge" is open to all and easily mastered by the individual crafts person. If we recall, Veblen wrote that this technological knowledge is always held in commons by all people but in certain eras it is dominated by a small group of individuals whereas in the handicraft era it is shared by many crafts people. The final key fact is that craft persons can easily understand technical and natural forces as they need to and machines are devised to be in accordance with the needs ...
Read more

Veblen's Instinct of Workmanship pg. 240-253

By
  This section continues Veblen's thinking regarding the evolution of the handicraft era.  The first point he wants to make is that the machine era requires a matter of fact and mechanical approach to work and workmanship as opposed to the era of human dexterity and high touch of the handicraft era. He also notes again how the crafts persons embody the nature of the economy in that era and convince many others that human craftsmanship is the best gauge upon which to assess society. He writs that,  “to serve the needs of this machine technology, therefore, the information which accumulates must in some measure be divested of its naive personal colouring by use and wont; and the degree in which this effect is had is a measure of the degree of availability of the resulting facts for the uses of the machine technology.” (Veblen, pg. 240, 1914). From this point, we observe the shift towards the machine age and perhaps of equal importance the price age.  As Veblen notes on...
Read more

Veblens Instinct of Workmanship pg. 231-234

By
 Chapter 11, the Era of Handicraft pg. 231-234 Veblen starts this chapter by noting that in his mind Eruope had not been characterized by large scale emperors but generally smaller fiefdoms and kingdoms unlike Asia for example. He felt that the Roman Empire was more of a southern European tradition.  Western and northern Europe developed with small scale industry and the handicraft system in the middle ages in particular.  This eventually changed over time as we have already explored as the technology changed and it became impractical for every small handicraft merchant to own capital. In the handicraft era, the habit was that price should be based on a labor theory of value but this changed to become based on freedom between buyer and seller as the capital intensive nature of industry changed. Over time, the owners became a smaller class of people and the workers, who were originally handicraft based, came under the dominion of the owners of capital.   This marked t...
Read more