Institutional Economics Revisited.

• Author: Kilpatrick, Henry E., Jr.

Slightly more than half of this book consists of a series of seven lectures on institutional economics, which was given by the author at the Universita Commerciale Luigi Bocconi in Milano, Italy in May 1985. The remainder of the volume contains a discussion among the author and attendees of the lectures (which was presumably condensed from the discussion that took place after each of his lectures), and a biographical sketch of the author.

Tsuru begins his lectures by recasting Marx as an institutionalist, claiming that when Marx speaks of the dialectic relation of production and mode of production, he is actually speaking of institutionalism. Next he compares Marx with Keynes in their respective treatment of economic aggregates. He argues that Marx's treatment of aggregates is theoretical, while Keynes's treatment must fall back on microeconomics for theoretical underpinnings. Hence, Tsuru argues, Marx has established a theoretical basis for institutional economics on both a microeconomic and macroeconomic level.

His third lecture compares the business cycle work of Marx and Schumpeter. He finds their approaches similar; Schumpeter's approach is said to be from business cycles to capitalism, while Marx's is the reverse: from capitalism to business cycles. Tsuru then argues that this shows that Schumpeter did not improve much upon Marx's work, but simply recast it in historical terms.

Tsuru next provides a short summary of Veblen's life and accomplishments. This is used as a prelude for his discussion of what he calls "modern institutionalism." He lists John Kenneth Galbraith, Gunnar Myrdal, and William K. Kapp as examples of modern institutionalisis, and discusses their contributions to the field in terms of four key elements of institutionalism (open-system economy, the planning problem, evolutionary process, and economics as normative rather than positive). Note that only Galbraith, of the three economists he uses as examples of modern institutionalists, is still living.

In his last two lectures, he discusses the future of institutional economics. First, he discusses a proposed change in the calculation of the GNP or national income figures. He proposes that a stock approach be used to replace the historical flow approach. He characterizes his proposal as a resuscitation of Irving Fisher's concept of capital and income. Tsuru's scheme is not well developed here, as the author himself admits. His idea is to find a better measure of...