ABSTRACT
HODGSON has written an excellent work of modern scholarship providing a sophisticated contribution to the study of institutions. He recognizes the cracks in the theoretical framework and assumptions of orthodox economics, and argues for the inclusion of a theory of cognition and culture. By taking individual preferences as given, economic theorists have ignored both cognitive processes and the social and institutional forces operating through and interacting with these processes. These forces govern individual desires and actions. Distinctions have, he suggests, to be made between sense data, information, and knowledge: these concepts are not independent of the beliefs, concepts, or theories of the observer. Institutions are not simply organizational structures but, as the sociologist Talcott Parsons emphasized, normative patterns defining actions and relationships. The writer thus dissents from orthodoxy, stressing inertia, routines and habits, and the emancipatory possibilities for institutional change through deliberative purposeful action.
