Underground Economics: A Decade of Institutional Theory.

• Author: Raines, J. Patrick

This anthology of the work of William Dugger between 1976-88 celebrates a career dedicated to developing and promoting institutional thought. This reviewer's highest hope for Underground Economics is that it will find its way into the hands of students currently pursuing graduate work in economics. Many of the essays provide such a compelling view of institutional thought that even a few selected readings could promote a profound rethinking of the discipline by those currently in the grip of an orthodox, neo-classical education.

The book is neatly organized into five connected sections. Since Dugger's work is evolutionary and chronological, redundancies exist. However, in that repetition and application of institutionalist principles clarify, the organization of essays works well to elucidate concepts. Appropriately, "Part I: The Founding Fathers and Their Perspectives," focuses on the pioneering work of Thorstein Veblen and J. R. Commons. The first two essays lay the foundation for institutional dissent by developing Commons's pragmatic view of an inductive-evolutionary society juxtaposed with orthodox models of rational, statically efficient behavior. Specifically, mainstream analysis that legitimizes a tradeoff between equality and efficiency is a gross error of reductionist thought. Dugger clearly explains Commons's view that freedom is the result of collective action and that such community promotes harmony instead of conflict. The chapters which follow in this section blend nicely together the multicolored strands of Veblen's thought into a rich mosaic. Veblen's interest in Marxism is clarified, and an intellectual link is established between Veblen, Darwin and Schmoller. In the essay on Veblen and Kropotkin, self-seeking behavior is demonstrated to be problematic; first by Veblen's view of the social benefits of workmanship, then by Kropotkin's finding that cooperation is a genetic survival trait. Finally, E. O. Wilson's evolutionary paradigm is analyzed in an institutional context. The basic beliefs suggest social ethics should be biologized ("natural" is good--"unnatural" is evil) and enlightened institutions can engender altruism.

Dugger begins Part II by lowering readers expectations for the explanatory power of institutional theory; realistic firm behavior seems to be maximization not satisficing, and stagflation is tolerated rather than studied as a theoretical anomaly. Ultimately, the essays in this section demonstrate the...