Institutional Law and Economics: The Legal-Economic Nexus

  Veblen Pg. 6-8 Veblen starts this small section with the fact that while the “ends of life” or what we are all seeking is based on those instincts and the interactions of instincts; the how we achieve those ends is based on the humans ability to work things out in a means-end continuum.  He specifically writes that, “means of accomplishing those things which the instinctive proclivities so make worthwhile are a matter of intelligence” (pg.6) However, he then makes some immediate qualifications on how people act in the “scheme of life”  and the ways in which humans devise and strategize in their actions is highly conditioned by “habits of thought”.  Veblen will argue that the means to achieve our ends (and the ends come from instincts) is also driven by some long and in some cases structurally rigid conceptualizations.  This is important because at first it seems that the ends are chosen for us but we use our intelligence and forethought to decide what means we will use to achieve tho

This starts a series of blog posts slowly exploring the "Instinct of Workmanship and the State of Industrial Arts" by Thorstein Veblen published in 1914.  We will explore the ideas discussed in this book and at times how they might apply to life and the economy in the 21st century. Ch. 1 (pg 1-5) Thorstein Veblen wrote “The Instinct of Workmanship” in 1914.  The book starts in chapter one with a laying out of the main ideas to be explored in much greater depth throughout the book.  We start with life and lief choices being set by: 1) instincts and 2) tropismatic aptitudes.  The second one is something we do not control or control very infrequently such as breathing.  The first one is something we have some discretion over and will be the main focus of the book that Veblen is writing. Veblem then goes on to state that the word “instinct” has fallen out of favor with students of biology. He thinks this may partly be due to the idea of expanding beyond its original definitions a

  In part 3 of the legal economic nexus, Samuels gets to the heart of the matter by applying his new approach or thinking about implications.  This is arguably also the trickiest part of the paper for him to navigate.  The section starts with a declaration of the need for “objectivity”.  Of course, there will be many who say this is an impossible standard for humans to achieve as every person brings some set of experiences and bias to how they do the work and even the questions they ask or things are interesting to answer.  Certainly, there are a number of institutional economists who would claim that the subjective-objective dichotomy is a false and impractical one. Leaving those arguments aside for the moment, let's explore what Samuels was trying to do here. His main point is he wants to move beyond the power contestations of lawyers or economists as they try to influence the nexus.  He states that there are those who would pretend to be objective but in fact are perhaps subtly

  Samuel's Legal Economic Nexus Part 2   Warren starts off the next section of the paper with the title, “the legal Economic Nexus” which is the real heart of the paper.  He constructs a system whereby markets allocate goods and services, government allocates property rights which drive market decision making and in turn market participants attempt to shape those government decisions.   This is where we understand the nature of the interdependence between markets and government [1] . Samuels then shows how this same framework is essentially implicitly applied in the case of production possibility curves, community indifference curves or social welfare functions in neoclassical economics.  The parameters of these constructs are shaped by underlying governmental decision making.   In the next subsection, Samuels writes that, “In both regards, the arena of the economy and the law-the economy and the polity-are jointly produced, not independently given and not merely interacting.” (pg.