Institutional Law and Economics: The Legal-Economic Nexus

This section continues some background thinking and foundational challenges to understanding the changing nature of human institutions and human material means and ends.  Veblen makes the point first that human physical nature has not altered very much in the history of the species whereas the spiritual and cultural nature of the species has changed dramatically in the same time period.     This is still an accepted fact of science today [1] .     Veblen puts it that the ways and means of life, both the material and immaterial change often due to changes in the environment.     Veblen is quick to point out that these changes in cultural institutions don’t “afford successively readier, surer or more facile ways and means” (pg 19).   Veblen then points to his reference to various stages of human development with his focus on savagery.  The savagery phase is one that may be more or less advanced and that can be...

Veblen pg 13-18 Instincts are inherited is the first statement of this section.  People do not respond to an external stimulus in the same way.  There is a makeup called the “spiritual nature” or human nature”.  Veblen argues that the degree of importance or influence of each instinct in each varies as well as their interactions vary as well. He talks about instincts being secondary or emerging out of the confluence of other factors.  They would vary amongst even the same race or group of people. We definitely see Veblen utilized some form of Darwinian evolution.  He discusses how amongst any group of people there will be a wide variety of instincts emerging. Some may even be so out of the average that they become a threat to the community. He suggests that these extremes may be selected out over time (although this certainly seems questionable and it is unclear which characteristics he specifically views as disserviceable). Veblen then goes on to write that, “t...

  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...

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...

  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...

  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 ...

The next series of blog posts concern reviewing ideas from several articles of Warren Samuels. We will take each section of the paper and dissect the ideas from Warren Samuels “The Legal Economic Nexus” paper from the George Washington Law Review (v.57, issue 6) in 1988-1898. This first post is simply about the introduction of the paper. From there, we will discuss the three main sections of the paper each week. The first paragraph is expansively broad and packs a punch. We are told that in using Foucault we can understand that people make a distinction between a public and private part of life and the community. What does this mean “in the sense of Foucault?”  I think Samuels meant that Foucault thought about how ideas represent notions or objects in the real world.  In this case, Samuels meant that we use these words, polity and economy to represent two separate and independent concepts that exist in reality.  The concept that we think of them in our minds that they ar...