Institutional economics

Institutional economics is an holistic school of thought (see "Holism"), of American origin, that maintains that the patterns of group behavior, rather than individual human actions, should occupy the central stage of "social studies." This school believes that man's activities are primarily fashioned by irresistible social pressures called institutions. Such institutions include custom, habit, tradition, environment and man-made law. Attributing the ills of mankind primarily to the institutions of "laissez-faire capitalism," they seek to change existing institutions by the pressures of public (i.e., politically controlled) education, political intervention and social controls (central planning) which they believe will eliminate the maladjustments and clashes of interest they consider inherent in a market economy based on private property and the self-interest of individuals. Institutional economics has been largely influenced by the writings of Thorstein Veblen (1857-1929), John R. Commons (1862-1945), Wesley C. Mitchell (1874-1948), the sociologist Charles H. Cooley (1864-1929) and the philosopher John Dewey (1859-1952). It is the American variety of the British and German Historical Schools of Economics. (See "Historical School.")