commodities or manufactured products, leave alone services. This makes
it hard to evaluate the full applicability of the theoretical principles
articulated in the introduction to the volume.
By adopting the ideas of‘New Institutional Economics’, the editors of
theCEHGRWhave aligned themselves with the dominant thread of
North American thinking about historical economies. An understanding
of historical economies through institutions has proved to be a broad
church, uniting historians as well as economists since the early 1900s
(notwithstanding the kind of criticism of specific institutional arguments
expressed by Mark Granovetter, for example).^13 The aspiration of many
institutional historians within this tradition has been to focus on strong
social uniformities and well-defined common institutional patterns,
which provide suitable evidence for study and avoid the problems
associated with the idiosyncrasy of subjective decision-making. The
‘spirit of the age’, a Hegelian concept made memorable by Max Weber,
was no longer acceptable for a more scientifically-inclined era.^14
The majority of North American theorists, from John Commons
onwards, nevertheless took economic theory away from some of the
key institutional ideas propounded by Thorstein Veblen at the turn of
the nineteenth and twentieth century. Veblen was a brilliant thinker, but
a cultural and social outsider among his academic peers.^15 Although he
did not succeed in developing a systematically argued exposition of his
ideas, some of his key concepts remain central to the future development
of theories about long-term economic structures. Veblen was very inter-
ested in the role of knowledge in processes of production, particularly in
the kind of knowledge that is acquired by habitual practices and cumu-
lative experience. In place of the rationalistic, calculatinghomo econom-
icusof classical, that is, eighteenth-century economic thought (and of its
neo-classical, twentieth-century successors), Veblen wanted to put a
human mind shaped by habits of thought and habitual practices, rooted
in everyday experience. Among his closest intellectual colleagues and
conceptual mentors were William James and Charles Sanders Peirce,
who explored the idea of knowledge in terms of habitual propensities.
Veblen understood that the principles of Darwinian natural selection
had somehow to be factored into a historical understanding of human
societies (unlike many of his associates and successors, who opted for a
(^13) Granovetter 1985, 499–505, discussing Oliver Williamson’s work on market hierarch-
ies; see below for further discussion of markets.
(^14) Hodgson 2001, 171, citing John Commons’direct criticism of Weber.
(^15) Hodgson 1998; Hodgson 2001, 228, cites the distinguished economist Joan Robinson:
[Veblen was]‘the most original economist born and bred in the USA.’
Societies and economies 91