chapter  17
20 Pages

Institutional economics and consumption

Hamilton adds his middle initial to his name and considerable detail to his exposition in this article on institutionalist consumption theory. The article appeared in a two-part symposium on institutional economics. The articles solicited for the symposium, including this one, were then published under the title Evolutionary Economics by M. E. Sharpe in 1988 as a two-volume work. Marc R. Tool was the editor. Hamilton starts out by explaining how conventional economics largely avoids consumption theory, and falls back on the utilitarian hedonism of Jeremy Bentham to conjure up a world of “rational” consumer calculating machines. Institutionalists, on the other hand, starting with Thorstein Veblen’s Theory of the Leisure Class, work up an instrumentalist theory of consumer behavior in which consumers buy goods to help them achieve ends-in-view and also to help them signal their status to other consumers. In institutionalism, consumer behavior is learned in a specific cultural context. Today, that context includes John Kenneth Galbraith’s revised sequence and it includes the industrial economy’s need for progress to be made in achieving ever higher mass consumption if progress is to continue in ever higher industrial production.