ABSTRACT
American economic theory began primarily as a protest against the presumed universality of classical economics. Throughout the nineteenth century and later American business enterprise was defended by the most eminent academic economists. Their pragmatic approach to economic theory made it relatively easy for them to justify the activities of an untrammeled capitalism. Alexander Hamilton was the first eminent economic spokesman for the new American nation. Professor John Bates Clark's economic theories, expressed with force and precision and ostensibly opposed to classical doctrine, were nevertheless based on what Thorstein Veblen termed “the pre-evolutionary ground of normality and ‘natural law.’” Aware that existing monopolies limited free competition, he condemned them as an economic evil and proposed that the state, which existed chiefly to protect property, take steps towards their elimination. Institutional economists, and their number has become large, thus concern themselves with things in flux and employ those methods of study which best analyze the processes of economic change.
