ABSTRACT
By the second decade of this century, the work of Veblen had made some impact on economic theorists and there had developed a group of prominent economists such as Hoxie, Mitchell, and Hamilton who were proclaiming a “new economics.” This new economics was held to be different from the traditional doctrine in several significant ways, and it was expected that a revolutionary change in economic theory was in prospect. Exactly what kind of change was implied is not easily determined, for the differences between the two schools have become obscured in the controversy over the fact of difference. There have been those who have held that there is no difference whatever. This was the position taken by Paul T. Homan at the Round Table on Institutional Economics at the 1932 meeting of the American Economic Association. At the same meeting, R. T. Ely maintained that as far as he could determine, the institutionalists were not attempting to do anything that the young economists had not been trying at the time of the formation of the American Economic Association in the eighties. In fact, Ely held that ever since that time economists had been doing essentially what the institutionalists were claiming to have done. 1 These statements would indicate that there is no essential difference between the two schools, and this opinion is frequently found among recognized orthodox economists, who also cite various works of classical political economists as evidence to this effect.
