Walton Hale Hamilton: Economics

“There [is]… a list of five tests which any body of doctrine which aspires to the name of economic theory must be able to meet:
1. Economic theory should unify economic science. - The task of a general body of theory in any subject is to give unity to its investigations…
2. Economic theory should be relevant to the modern problem of control. - Students of economics should spend their efforts upon subjects worth investigation…
3. The proper subject-matter of economic theory is institutions. - The demand that economic theory relate to institutions is implicit in the plea for its relevancy…
4. Economic theory is concerned with matters of process. - If economic theory is to treat of institutions it must know both the kinds of things institutions are and the kinds of things they are not…
5. Economic theory must be based upon an acceptable theory of human behavior.”

Walton Hale Hamilton

After all control and institutions and processes are immediate things. They can all be translated into terms of human conduct...
Source: The Institutional Approach to Economic Theory, 1919, p. 311-6

Behavior , Problem , Effort , Science

“"Institutional economics" alone meets the demand for a generalized description of the economic order. Its claim is to explain the nature and extent of order amid economic phenomena, or those concerned with industry in relation to human well-being. In the words of Edwin Cannan, it attempts to tell "why all of us are as well off as we are" and "why some of us are better off than others." Such an explanation cannot properly be answered in formulas explaining the processes through which prices emerge in a market. Its quest must go beyond sale and purchase to the peculiarities of the economic system which allow these things to take place upon particular terms and not upon others.”

Walton Hale Hamilton

Source: The Institutional Approach to Economic Theory, 1919, p. 311

Nature

“An explanation of the "institutional approach" to economic theory is a plea for a particular kind of theory. It is possible to come upon the same object from different angles; but more often those who take different routes chance upon different things. The "institutional approach" doubtless has some importance because it is a happy way to acceptable truth, but its significance lies in its being the only way to the right sort of theory. An appeal for "institutional economics" implies no attack upon the truth or value of other bodies of economic thought, but it is a denial of the claims of other systems of thought to be "economic theory." This, however, is no pointless struggle in method to be carried on by breaking syllogisms over concepts and by engaging in polemics over niceties in statement. On the contrary, it involves the very nature of the problems which the theorist should set himself; its real issue is over what economic theory is all about.”

Walton Hale Hamilton

Source: The Institutional Approach to Economic Theory, 1919, p. 309: Introduction

Truth , Way , Nature , Problem