In the 1960s and 1970s there was a revival of non-neoclassical political economy, or heterodox economics, in many nations which has continued to this day. Original institutionalists started their own organization, the Association for Evolutionary Economics (AFEE) in 1965, followed by the Journal of Economic Issues in 1967. Other radicals and Marxists organized the Union for Radical Political Economics (URPE) in 1968 and the Review of Radical Political Economics the following year. In many nations similar organizations and journals were instituted in the 1970s. Post Keynesians started to publish the Cambridge Journal of Economics in England and the Journal of Post Keynesian Economics, inaugurated by Sidney Weintraub and Paul Davidson from the USA. The Association for Social Economics started to become more inclusive and participatory by including many heterodox themes in its Review of Social Economy. It wasn't until the late 1980s that the European Association for Evolutionary Political Economy was formed and the early 1990s when feminists became active in organizing their own International Association for Feminist Economics along with their journal, Feminist Economics.
After thirty to forty years of growth, heterodox political economy has really come of age, since now there are more journals and publishers disseminating heterodox themes than one could have imagined in the 1960s. (1) Then in the 1990s a whole series of encyclopedias and companions were published, documenting the advances made since the 1960s, along with the seminal ideas of earlier writers. (2)
Furthermore, there is an organization committed to promoting the collective interests of some fifty heterodox or pluralistic associations: the International Confederation of Associations for Pluralism in Economics (ICAPE). In 2003 ICAPE sponsored a conference at the University of Missouri to document the history and promote the future of heterodox economics. Also, a Conference on the History of Heterodox Economics in the Twentieth Century was held at the University of Missouri-Kansas City in October 2002. It is commonplace now for political economists to share perspectives from the different schools of thought, be they original institutionalists, Marxists, Post Keynesians, feminists, or social economists. Indeed, for a growing number of scholars the themes of political economy are becoming sufficiently well developed for them to eschew rigid schools in favor of an eclectic fusion of ideas.
This fusion of ideas among and between schools is becoming so common that journals are increasingly recognizing such links. The JEI has been publishing articles promoting linkages for a number of decades now, and some AFEE presidents have been radical institutionalists with an affinity to Marxist political economy. (3) Indeed, under the presidencies of William M. Dugger and James Ronald Stanfield, Paul M. Sweezy received the Veblen-Commons Award in 1999. This was the first time that a scholar of such Marxist credentials had ever won the award. (4) The purpose of this paper is to provide a detailed analysis of the relationship between Thorstein Veblen and Sweezy and how their concerns fare in the current environment. An understanding of this intellectual heritage is essential for the historical and contemporary concerns of the Veblen-Commons Award as well as for the continuing analysis of the relationship between Marxism, institutionalism, and other trends in heterodox economics. (5)
Veblen's "Critique" of Marxism
Thorstein Bunde Veblen (1857-1929) is the father of institutional economics and a critical influence in the formation and development of AFEE. He established an indigenous branch of radical economics in the United States-institutionalism-and many argue he adapted certain Marxian themes to U.S. conditions (Hill 1998). He recognized the importance of contradictory processes, collective wealth, and interdisciplinary methods in a manner similar in many ways to the method of Karl Marx (Harris 1998). A major theme of Veblen which has Marxian overtones is that capitalism operates in a contradictory environment where business is in conflict with industry, while the concerns of the common people are in contradistinction to those of the leisure and business classes. He developed an evolutionary and materialistic understanding and critique of capitalism in the nineteenth and twentieth centuries while developing certain socialistic policies and perspectives for improving human welfare (O'Hara 2002).
Nevertheless, many institutionalists and others distance themselves from Marx, partly because of the arguments involved in Veblen's supposed "critique" of Marxism (e.g., Gordon and Adams 1989; Tool 2001). In two articles published in 1906 (1989) and 1907 (1989), Veblen explored the nature of Marxism in some detail. It is clear that Veblen was trying to assess the usefulness of the Marxian framework for developing a materialistic and evolutionary approach to institutions and political economy. He recognized the importance of the materialistic conception of history but wanted to modernize it to make it more evolutionary, less dogmatic, and more in keeping with contemporary developments in science and philosophy. (6) In doing so, Veblen seemed to be working along lines similar to certain critical European Marxists such as Antonio Gramsci, Antonio Labriola, and George Lukacs (see O'Hara 1997). In particular, he wanted to modify Marxism by situating structure and agency in a system of interdependency. He recognized the need for an open-ended analysis of change where there is no final term and no specific direction. And he wanted to link the view of human nature based on instincts into a wider view of habits and institutions.
Veblen was attacking the type of interpretation of Marx made by the German Social Democratic Party (SDP) around the turn of the twentieth century. (7) Although the SDP had many internal debates and sophisticated theorists, their most widespread interpretation of Marx was a crude economic determinism. Using a simplistic, crude, and unproven version of the labor theory of value, they held that society was split into two main classes, the capitalists and the workers. (Contemporary, critical Marxists still recognize the importance of these two classes, but they also recognize other classes and the vital differences between strata within these classes, such as engineers and unskilled workers).
The SDP promoted an economic, or materialist, conception of history in which economics determines everything else. Although political and social ideas and institutions had some reciprocal effect on the economy, the economy was seen to dominate "in the last instance." As technology progresses from primitive tools to modern industry, so too must institutions progress from the primitive to the slave, feudal, capitalist, and finally socialist systems. Technology meets an obstacle in the interests of the ruling class, but this obstacle will always be overcome by reform or, if necessary, by revolution. Many SDP theorists saw this historical evolution of economic systems as inevitable and predetermined by the dialectic of history. Progress from the primitive society to the eventual socialist society is inevitable. A similar view of political economy was espoused by "official Marxists" in the Soviet Union from the 1930s to the 1980s.
Veblen made a devastating attack on the SDP perspective. He argued that there is no proof of the simplistic labor theory of value and exploitation. Economics is not the determinant of ideas and everything else. Rather, a holistic approach is required in which there are interrelations, not one-way causation. Technology does not automatically progress but is produced by a particular pattern of institutions, a particular historical society. The Hegelian predeterminism and mystical inevitability of progress must be replaced by a causal investigation of evolution as a process, in which "progress" is not predetermined by any outside force and is not inevitable. Instead of rigid structural determinism, Veblen wanted to develop a balanced view of structure and agency, evolution, and blind drift as well as instincts, habits, and institutions. Nevertheless, he realized that Marx asked the right questions, and Veblen himself took a "softened" materialistic conception of history as a point of departure in his own work.
There had always been minority voices within Marxism, but from the late 1950s to the 1990s there was a tidal wave of criticism of Soviet Marxism, followed by renovation and renaissance] One of the leaders of the renaissance in the United States was Paul Sweezy. Sweezy's criticisms of Soviet Marxism were very similar to Veblen's criticisms of German social democratic Marxism. Moreover, Sweezy's own critical reconstruction of Marxism was similar in many ways to Veblen's basic approach. For many reasons, including Sweezy's influence, most contemporary U.S. radicals arrive at the same criticisms of dogmatic Marxism as Veblen (see, e.g., Sherman 1995). Thus there is much compatibility between modern critical and independent Marxian economics and the views of Veblen in his critique of "Marx and His Followers."
In particular, while the old deterministic Marxist tradition (as well as Ayresian institutionalism) took a purely structural view of causality and change, modern Veblenians and radical political economists have been trying to connect structure and agency in a process of interaction and coevolution. This is perhaps the area where Veblen was ahead of Sweezy but where contemporary institutionalists and radical political economists have been wittingly or unwittingly following the lead provided by Veblen. Rigid economic determinism and reductionism of any sort must give way to multifarious interaction between structure and agency. In this view, history and institutions do not dominate individuals, but individuals make history only under...