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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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