1st Edition
New Institutional Economics as Situational Logic A Phenomenological Perspective
Drawing on phenomenological and realist approaches, this book surveys the theoretical evolution of new institutional economics.
For all its popularity and explanatory power, new institutional economics is not a homogenous field but encompasses a range of different theoretical approaches starting from Coase and the introduction of transaction costs. In particular, the concept of rationality is a rich source of dispute leading to a bifurcation between ‘insider’ and ‘outsider’ perspectives. The insider view refers to studying conscious human beings – the economic actor – who seek their self-interest and find themselves in their mundane situation. The self-interest of the economic actor bestows him with logic. It makes the logic of the situation the method of economics, as Karl Popper establishes. Thus, the book argues for the positioning of new institutional economics as situational logic, that is, an economic theory that formulates and studies single-exit situations that face the economic actor. Ultimately, this book presents a critical appraisal of new institutional economics theories based on a substantiated methodological perspective that effectively navigates the theorist between realism and rigor.
This book will be of interest to readers of new institutional economics, economic theory, and the philosophy of economics and social sciences.
Chapter 1 Economics as analysis of meaning
Introduction
1.1 From an inside versus an outside perspective
1.2 The outside purview dominates in modern economics
1.3 The inside purview marks institutional economics
1.4 An unremitting Methodenstreit
1.5 Nominalism versus realism
1.6 Realism and meaning in NIE
1.7 The analysis of meaning as the scope of a discipline
1.8 The causal explanation of facts
1.9 Meaning and fact in economics
1.10 Recap
Chapter 2 Phenomenology and the analysis of meaning
Introduction
2.1 Consciousness, intersubjectivity, and meaning
2.2 Weber’s fundamental concepts of sociology
2.3 Phenomenological sophistication of Verstehen
2.4 Phenomenological analysis of meaning
2.5 Conclusion
Chapter 3 Scope and method of economics
Introduction
3.1 The scope of economics
3.2 The dehomogenizing methods of the Marginal Revolution triumvirate
3.3 Methodological individualism
3.4 Conclusions
Chapter 4 Frank H. Knight, pioneer in NIE
Introduction
4.1 Knight’s methodological and philosophical preliminaries
4.2 Imperfect competition through risk and uncertainty
4.3 Review and conclusions
Chapter 5 On Coase
Introduction
5.1 The Nature of the Firm
5.2 The Marginal Cost Controversy
5.3 The Problem of Social Cost
5.4 Coase’s methodological point of view
5.5 Coase’s economics from a phenomenological point of view
5.6 Conclusions
Chapter 6 Theory of the Firm
Introduction
6.1 The existence of the firm
6.2 The firm’s complement: the market
6.3 NIE of organizations
6.4 Production theory of the firm
6.5 Conclusions; a phenomenological point of view
Chapter 7 Market and government
Introduction
7.1 The zero hypothesis of the market mechanism
7.2 Market, government, and allocation
7.3 On property
7.4 Coase on cases of interference
7.5 Comparative institutional arrangements
7.6 Comparative institutional analysis applied
7.7 Summary
Biography
Piet de Vries is a former senior researcher and assistant professor at the University of Twente and a lecturer at the Twente School of Management, Enschede, the Netherlands.
"There are relatively few discussions of the philosophical foundations of the new institutional economics (NIE). This book helps to fill a big gap. It ties the NIE theoretical underpinnings to Karl Popper’s notion of situational logic. With this innovative approach, Ronald Coase and Frank Knight come out as key figures in the foundation and development of the NIE, more so than Douglass North and Oliver Williamson. Henceforth, work in the NIE tradition will have to come to terms with Piet de Vries’s pioneering interpretation."
Geoffrey M. Hodgson
Emeritus Professor, Loughborough University London.
