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Geoffrey Hodgson Quotes

Geoffrey Martin Hodgson is Emeritus Professor in Management at the London campus of Loughborough University, and also the editor-in-chief of the Journal of Institutional Economics.

Hodgson is recognised as one of the leading figures of modern critical institutionalism which carries forth the critical spirit and intellectual tradition of the founders of institutional economics, particularly that of Thorstein Veblen. His broad research interests span from evolutionary economics and history of economic thought to Marxism and theoretical biology. He first became known for his book Economics and Institutions: A Manifesto for a Modern Institutional Economics , which criticises modern 'mainstream' economics and calls to revise economic theory on the new grounds of institutionalism. His reputation has become enhanced owing to the trilogy of more recent books – Economics and Utopia , How Economics Forgot History and The Evolution of Institutional Economics all of which built Hodgson's arguments into a more rounded and powerful critique of mainstream economic theory.

In 1988, Hodgson was involved in setting up the European Association for Evolutionary Political Economy . He was its general secretary until 1998. In 2000 Hodgson co-founded The Other Canon, a center and network for heterodox economics research, with main founder and executive chairman Erik Reinert and others. In 2013, Hodgson co-founded the World Interdisciplinary Network for Institutional Research . In his 2015 book "Conceptualizing Capitalism" and an article entitled "Legal Institutionalism", he sketched his own research program of a legal institutionalism. Wikipedia  

✵ 28. July 1946
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Famous Geoffrey Hodgson Quotes

“The firm as a relatively durable organizational structure is able to deal with the lack of knowledge about the future fruits of research and development and innovation. Its relative internal stability means that it can carry unquantifiable risks which would be eschewed in the volatility of the market. In particular large firms are able to set up and sustain R&D departments with their own funds. It is widely recognized that atomized, small-scale private enterprise is not well able to make such long-term commitments.”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 213

“The use of the term institution has become widespread in the social sciences in recent years, reflecting the growth in institutional economics and the use of the institution concept in several other disciplines, including philosophy, sociology, politics, and geography. The term has a long history of usage in the social sciences, dating back at least to Giambattista Vico in his Scienza Nuova of 1725. However, even today, there is no unanimity in the definition of this concept. Furthermore, endless disputes over the definitions of key terms such as institution and organization have led some writers to give up matters of definition and to propose getting down somehow to practical matters instead. But it is not possible to carry out any empirical or theoretical analysis of how institutions or organizations work without having some adequate conception of what an institution or an organization is. This paper proposes that those that give up are acting in haste; potentially consensual definitions of these terms are possible, once we overcome a few obstacles and difficulties in the way. It is also important to avoid some biases in the study of institutions, where institutions and characteristics of a particular type are overgeneralized to the set”

Geoffrey Hodgson

Source: Economics and institutions." 1988, p. 1; Abstract

“Some institutions within the market are associated with exchange and contracts in an elemental sense (such as the legal system and the customs which govern the contract)… These would be present even if a formal market did not exist. Other institutions are specifically to do with the development of a market and the coordination of a large number of exchanges in an organized manner.”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 174

“The nature of the firmis not simply a minimizer of transaction costs, but a kind of protective enclave from the potentially volatile and sometimes destructive, ravaging speculation of a competitive market. In the market the rational calculus depends upon the fragile price conven- tion which can often depend on ‘whim or sentiment or chance’. Habits and traditions within the firm are necessarily more enduring because they embody skills and information which cannot always or easily be codified or made subject to a rational calculus. what the tlrm achieves is an institutionalization of these rules and routines within a durable organizational structure. In consequence they are given some degree of permanence and guarded to some extent from the mood waves of speculation in the market.”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 208

“Market exchange requires a combination of both state and customary institutions. For any developed system of commodity exchange there must be a legal system inscribing and protecting rights to individual or corporate property. There must be a body of contract law with criteria for distinguishing between voluntary and involuntary transfers of goods and services, and courts to adjudicate in such matters. However, the evolution of law is not simply a matter of legislative construction; a great deal of law grows out of custom and precedent. Property and contract law are not exceptions. Consequently, the existence of property and exchange is tied up with a number of legal and other institutions, e. g. government, political system, and common societal values.”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 150

“It is because prices are stable, and are perceived by agents to be in equilibrium, that the task facing market institutions is less daunting in this respect. However, market institutions may still have many other functions, such as providing information regarding quality and the location of potential buyers and sellers, and regulating both the product and the entrants to the market. In fact, a crucial function may be more subtle; by ordering trade under the aegis of some institution, the price and quality of the product may be legitimized at its given level. There is a kind of stamp of institutional approval which may contribute in a powerful manner to the emergence of price norms…..”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 185-6

“We shall here define the market as a set of social institutions in which a large number of commodity exchanges of a specific type regularly take place, and to some extent are facilitated and structured by those institutions. Exchange as defined above, involves contractual agreement and the exchange of property rights, and the market consists in part of mechanisms to structure, organize and legitimate these activities. Markets, in short, are organized and institutionalized exchange. Stress is placed on those market institutions, which help to both regulate and establish a consensus over prices and, more generally, to communicate information regarding products, prices, quantities, potential buyers and potential sellers.”

Geoffrey Hodgson

Source: Economics and Institutions, 1988, p. 174

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