The arrival of institutionalism as a self-identified and self-proclaimed movement in American economics can be dated quite precisely to December 1918 and to a much anticipated American Economic Association (AEA) conference session on economic theory, featuring papers by Walton Hamilton, J. M. Clark, and William Ogburn (a sociologist), and with Hamilton's colleague, Walter Stewart, as chair. Hamilton's paper, “The Institutional Approach to Economic Theory” (Hamilton 1919a), introduced the term “institutional economics” to the literature, and from that time on, there has been discussion and debate over the nature of institutional economics, its methods, its content, and its significance.

THE STANDARD VIEW

What might be called the standard view of American institutional economics can be easily found in textbooks on the history of economic thought. There are a number of evident characteristics in these treatments. The first is that institutionalism is presented as an aside to the main story. This is not difficult to understand because these books are quite explicitly designed to follow what is seen as the main line of development of the discipline from classical economics to modern neoclassicism. From this perspective, it is easy to present institutionalism as ancillary to the main narrative.

Second, the discussions reflect an unresolved difficulty in the definition of the institutionalist movement. Thorstein Veblen is always a major component of the treatments, but there are surprising differences among the coverage provided to other institutionalists, and all the books grapple uncomfortably with the obvious divergences among many of the leading figures.