ABSTRACT
In espousing a theory of production, one seeks to explain the nature and consequence of a society's means of provisioning. This chapter considers the institutional economic conception of the process and role of production, especially as contrasted with the conceptions of economic orthodoxy. Consequently, as with musical counterpoint, institutionalism and its theory of production are better understood when placed in apposition to that which is countered, which for institutionalism is neoclassicalism. The institutionalists object to neoclassicalism's failure to investigate adequately the determinants of technology, to appreciate the unceasing disequilibrating effects of technological change, and to recognize the relationship between production and power. Consonant with a neoclassical theory of production is its theory of distribution. Thus, while the level of output, the manner of combining inputs, and the distribution of production are all important questions, the root issue addressed by a theory of production is the beneficiality of the referent value system.
