Institutional Law and Economics: The Legal-Economic Nexus

  Institutional economists certainly hold a variety of views regarding the role and positives or negatives of the profit motive.  There can be little doubt that the profit motive is a major part of any capitalist system regardless of its overall design.  The profit motive is the piece that moves supplies and firms to bring products and services to market. It also plays a role in the quality and long term relationships between buyers and sellers.   It has been both heralded as a great force in improving human society and the advancement of technological innovation and the force that is pulling society apart and cheapening human life. The ILE approach is that the profit motive is a function of costs and benefits and those very costs and benefits are structured by institutional rules.  These rules help determine which costs will be borne by which party and which parties can take advantage of what  benefits.  One of the early founders of ILE, John R. Commons, had broad and multiple takes o

This week, we are shamelessly promoting the upcoming Institutional Economics: Perspectives and Methods in Pursuit of a Better World ( Pub: October 28th, 2021).   It is edited by our colleague Charles Whalen, who previously reflected on his career as an institutionalist on this blog here , here , and here . The book covers several major institutionalist perspectives and methods in one place. Other authors include Mary Wrenn, and Bill Waller, who are both interviewed in our Legal-Economic Nexus podcast.  How Charles managed to pull this many-authored volume together throughout a global pandemic (with few setbacks) remains a mystery to me.  Eric and I (with Charles) contributed a chapter in the latter section titled: "Institutional impact analysis: the situation, structure, and performance framework." This chapter covers the evolution of Schmid's model, using old files and drafts we found here at MSU and at the University of Wisconsin to piece together the SSP model. Through

  There is an ongoing debate about whether we can make capitalism “nicer'' or “gentler” in order to address the issues of economic inequality, climate change and other social ills.  For some the answer is a better capitalism and a better set of capitalists and for others it is the change in economic systems to socialism, mutualism or something else. Recently, the Canadian Mark Carney, ex central bank governor of Canada and the UK,  has written a book called “Values: Building a Better World for All”.  In the book, he argues that we need to shift from market society to market economy.  The market must not dominate all of society and market decisions must reflect values other than mere financial profitability. Laurence Miall writing in the Jacobian argued that this will not work (Miall, 2021).  Miall’s basic critique is that there is a lot of wishful thinking about capitalists getting better, greener, etc...but not much evidence to back it up other than a few anecdotes.  He is als