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Published by EH.NET (September 2000) 
 
Geoffrey M. Hodgson, _Evolution and Institutions: On Evolutionary  
Economics and the Evolution of Economics_. Cheltenham, UK and  
Northhampton, MA: Edward Elgar, 2000. x + 345 pp. 0.00 (cloth),  
ISBN: 1-85898-813-6. 
 
Reviewed for EH.NET by Anne Mayhew, Department of Economics,  
University of Tennessee. <[log in to unmask]> 
 
 
This has been a frustrating book to read and to review. There are  
passages of great insight and importance intermixed with long  
passages that are little more than an annotated bibliography of works  
that have interested Hodgson. A basic source of the problem is  
revealed by Hodgson when he tells the reader that the book ". . .  
synthesizes several essays drafted in the years 1991-95 . . . [but]  
is not essentially a second installment of collected works. An aim  
has been to recast the essays so that they form a relatively  
integrated narrative and reveal a common set of motifs."  (p. ix) 
 
The reader who is familiar with Hodgson's work over the years since  
the publication of his very good _Economics and Institutions_ will be  
able to find that loosely integrated narrative and common set of  
motifs by remembering three ideas that have driven all of Hodgson's  
work: (1) the importance of biology and the idea of evolution for an  
understanding of human society; (2) the need for a revitalized and  
reformed evolutionary/institutional economics that would be built  
upon the salient features of biological evolutionary theory; and (3)  
the importance and the difficulty of achieving this goal in a  
discipline that does not prize pluralism in thought, and in which  
status and prestige often override logic and good sense in  
determining the acceptance of ideas. 
 
It helps in reading the book to begin with proposition (3), and  
indeed this is where Hodgson begins as he identifies the loss of  
pluralism that has characterized economic thought in the twentieth  
century as dangerous to the future of the discipline. However, what  
will also help the reader is to recognize that the sense of reading a  
somewhat randomly constructed annotated bibliography derives from  
Hodgson's own pluralistic approach _and_ from his recognition that  
acceptance for his own heterodox views requires attention to status  
that can be achieved by association with more acceptable ideas. 
 
Consider, for example, Chapter 3, "A Case Study: The Fate of the  
Cambridge Capital Controversy." It is not immediately clear why this  
chapter sits between one ("False Antagonisms and Doomed  
Reconciliations") in which the effort is to isolate the  
characteristics of neoclassical economics that are fundamentally  
antagonistic to an evolutionary approach, and another ("Metaphor and  
Pluralism in Economics" in which the importance of competing  
metaphors is described. Nor would it be at all clear to the casual  
reader why the article about the Cambridge Capital Controversy has as  
a central focus the frequency of citations to Piero Sraffa's  
_Production of Commodities by Means of Commodities_ , nor why the  
chapter on metaphor and pluralism is followed by an appendix in which  
a paid advertisement drafted by Hodgson, Uskali Maki and Deirdre  
McCloskey and signed by 44 economists is reproduced. All does become  
clear, however, when it is recognized that Hodgson is, in the case of  
the Cambridge Capital Controversy, identifying (correctly or not is  
another question) reasons why Sraffa's argument that there can be no  
independent measure of capital abstracted from distribution and  
prices faded from importance and consideration by economists after a  
flurry of attention from the mid-1970s to the 1980s. Though he finds  
part of the explanation in the failure of the "constructivist  
Sraffians" to develop ideas that would have made their approach a  
more attractive alternative to neoclassical theory, he also finds it  
in the political climate (radical approaches had appeal in the late  
60s and early 70s), and in the citation game. When Sraffa's ideas  
were taken seriously in a leading US journal, the _Quarterly Journal  
of Economics_, by high status economists such as Paul Samuelson, the  
number of citations to Sraffa's work rose rapidly. When the  
high-status economists lost interest, the citations fell and Sraffa  
ceased to matter to most. 
 
This is Hodgson's dilemma and the dilemma for the reader. Hodgson has  
a very clear understanding of the shortcomings of modern economic  
analysis, and he sees clearly the importance of evolutionary ideas.  
Yet, it is only by careful mixing of evolutionary ideas with the  
dominant and high-status, but thoroughly non-evolutionary,  
neoclassical core that evolution can be incorporated into economics  
without loss of status. Hodgson understands with great clarity that  
incorporation of the idea of evolution into economics means that the  
whole of economic systems must be understood to be subject to change  
(as is true in phylogenetic evolutionary theory). Nonetheless, and in  
confusing manner, he focuses in the last part of the book on work  
that is, in his own terms, "asymptotic to an ontogenetic form"  
(Hodgson, 1993, p. 45). That is, Hodgson focuses (and with approval  
on evolutionary theory that is seriously watered down by being  
understood to take place within a relatively rigid set of constraints  
on change) where those rigid constraints are dictated by the need for  
congruence with neoclassical theory. 
 
The work of Ronald Coase, Oliver Williamson, Edith Penrose, and even  
in its more phylogenetic and critical manifestations, that of Sydney  
Winter and Richard Nelson is surely "asymptotic" to an ontogenetic  
form of evolutionary analysis. By that I mean that "the firm" which  
is at the center of their analyses is implicitly assumed to be  
unchanging in many respects, and especially in its place and  
connections within the larger economic system. This assumption is  
convenient for analysis but it also avoids the necessity of asking  
questions that might threaten the status of the investigator in a  
discipline that, as Hodgson has persuaded us, is anti-pluralistic. 
 
Hodgson's intellectual commitment is to the more radical phylogenetic  
approaches of such as Thorstein Veblen; his sense of the discipline  
is that the only way to make such an approach acceptable is by  
citation and discussion of far less radical ways of offering  
partially evolutionary analysis. This strategy, never spelled out,  
makes this collection of essays seem less than cohesive, but if you  
realize that Hodgson is using a strategy that he has derived from his  
own study of the evolution of economics, it makes a certain sense. 
 
Because there is a semi-hidden agenda, the book is hard to follow,  
and readers who are historians of economic thought are also likely to  
be irritated by assertions that do not seem adequately supported. To  
pick a fairly minor example: in the chapter on Sraffa, Hodgson  
asserts that a low level of citations to _Production of Commodities_  
for ten years after its publication, was an unusually long lag "given  
the theoretical significance of the work" (p. 49). Is this a long lag  
as compared to other works? A more important example to me was Hodgson's treatment of the
decline of the "Old Institutionalism" in
the interwar period. This is a complicated topic and Hodgson's  
assertions about a shift in "the prevailing conception of scientific  
methodology (p. 105)," and the secondary sources that he cites to  
support his conclusions do not seem adequate to the task. 
 
In spite of my reservations about this work, I do recommend that  
those who have not read Hodgson's work do so. Start with _Economics  
and Institutions_ and then read more. There is much there that is  
brilliant, and those who have already read that fine work will find  
much to enjoy here as well. 
 
References: 
 
Hodgson, G.M. _Economics and Institutions: A Manifesto for a Modern  
Institutional Economics_. Cambridge, UK: Polity Press and  
Philadelphia: University of Pennsylvania Press, 1988. 
 
Hodgson, G.M. _Economics and Evolution: Bringing Life Back into  
Economics_. Ann Arbor, MI: University of Michigan Press, 1993. 
 
 
Anne Mayhew has written extensively on the history of institutional  
economic theory and the history of institutional thought. Recent  
publications include "On the Difficulty of Evolutionary Analysis," in  
a special issue on Veblenian Evolutionary Economics in the _Cambridge  
Journal of Economics_ (Vol. 22, no. 4, July 1998) and "How Economists  
Came to Love the Sherman Antitrust Act," in Mary S. Morgan and  
Malcolm Rutherford, editors, _From Interwar Pluralism to Postwar  
Formalism_, Annual Supplemented to _History of Political Economy_  
(Durham and London: Duke University Press, 1999). 
 
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