ABSTRACT
“The only serious grounds on which political economists for centuries have claimed significance for their work have been its alleged relevance to the resolution of real problems facing real people in real political economies.” This chapter discusses the task of distilling a statement of the institutionalist fundamentals of economic policy inductively—by resort to the evidence. A wide array of works by scholars often acclaimed as institutionalists, or neo-institutionalists, was assembled and sifted for nuggets of policy formulation or methodology. Two major alternative visions are the orthodoxy of the traditional neoclassical synthetic analysis of markets and economic behavior and the heterodoxy of Marxist analysis of capitalism and socialism. For the orthodox, the mechanism is the equilibrium model of market behavior. Carrying its own set of assumptions and premises it wonderfully spins out policy formulations for any circumstances—potentially before the circumstance has ever arisen.
