“The smallest unit of the institutional economists is a unit of activity — a transaction, with its participants. Transactions intervene between the labor of the classic economists and the pleasures of the hedonic economists, simply because it is society that controls access to the forces of nature, and transactions are, not the "exchange of commodities," but the alienation and acquisition, between individuals, of the rights of property and liberty created by society, which must therefore be negotiated between the parties concerned before labor can produce, or consumers can consume, or commodities be physically exchanged.”

Source: "Institutional Economics," 1931, p. 652

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John R. Commons26

United States institutional economist and labor historian 1862–1945

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“These individual actions are really trans-actions instead of either individual behavior or the "exchange" of commodities. It is this shift from commodities and individuals to transactions and working rules of collective action that marks the transition from the classical and hedonic schools to the institutional schools of economic thinking. The shift is a change in the ultimate unit of economic investigation. The classic and hedonic economists, with their communistic and anarchistic offshoots, founded their theories on the relation of man to nature, but institutionalism is a relation of man to man. The smallest unit of the classic economists was a commodity produced by labor. The smallest unit of the hedonic economists was the same or similar commodity enjoyed by ultimate consumers. One was the objective side, the other the subjective side, of the same relation between the individual and the forces of nature. The outcome, in either case, was the materialistic metaphor of an automatic equilibrium, analogous to the waves of the ocean, but personified as "seeking their level." But the smallest unit of the institutional economists is a unit of activity -- a transaction, with its participants. Transactions intervene between the labor of the classic economists and the pleasures of the hedonic economists, simply because it is society that controls access to the forces of nature, and transactions are, not the "exchange of commodities," but the alienation and acquisition, between individuals, of the rights of property and liberty created by society, which must therefore be negotiated between the parties concerned before labor can produce, or consumers can consume, or commodities be physically exchanged.”

John R. Commons (1862–1945) United States institutional economist and labor historian

"Institutional Economics," 1931

“Following the lead given by new institutional economics, we shall take the transaction as our unit of analysis. For our purposes, a transaction can be thought of as any act of social exchange that depends on information flows for its accomplishment. Transactions can be as simple and brief as the purchase of a packet of cigarettes, or as complex as and extended as those which bind a Zen master to his disciples. Like institutional economists, we are interested in the relationship that can be established between different transactional characteristics and the phenomenon of institutionalization. Our use of the term transaction, however, will extend beyond that of institutional economics where the focus has tended to be primarily on transaction costs and efficiency considerations. These, to be sure, are relevant. But, as we shall see, they are not the whole story.”

Max Boisot (1943–2011) British academic and educator

Source: Knowledge Assets, 1998, p. 124; As cited in: Ortiz et al. (2006)

“To summarize, the production of information and its use in transactions both incur costs and are thus subject to economizing. In the 1970s, there occurred a revival of interest among economists in the economics of transaction, and Oliver Williamson in particular, building on the earlier work of Ronald Coase and John Commons, has explored the different institutional arrangements that govern transactional choices.”

Max Boisot (1943–2011) British academic and educator

Variant: To summarize, the production of information and its use in transactions both incur costs and are thus subject to economizing. In the 1970s, there occurred a revival of interest among economists in the economics of transaction, and Oliver Williamson in particular, building on the earlier work of Ronald Coase and John Commons, has explored the different institutional arrangements that govern transactional choices.
Source: Knowledge Assets, 1998, p. 235

“Since institutional economics is behavioristic, and the behavior in question is none other than the behavior of individuals while participating in transactions, institutional economics must make an analysis of the economic behavior of individuals.”

John R. Commons (1862–1945) United States institutional economist and labor historian

Source: "Institutional Economics," 1931, p. 654

“[In order to define the distinction between a grant and an exchange transaction, Boulding has used the net worth criterion] If there is no decrease in the net worth of either party, the transaction is exchange; if there is, it contains some grant element and is an explicit or implicit grant.”

Kenneth E. Boulding (1910–1993) British-American economist

Source: 1970s, The Economy of Love and Fear, 1973, p. 88 as cited in: Omicron Delta Epsilon, Omicron Chi Epsilon (1997) The American economist. Vol. 41-42. p. 20

“All exchange stimulates productive activity, whether exchange by gift, gambling, barter, or money transaction.”

Aaron C. Brown (1956) American financial analyst

Source: The Poker Face of Wall Street (2006), Chapter 5, Pokernomics, p. 127