Commons, Sovereignty, and The Legal Basis of The Economic System

In his introduction to Commons’ A Sociological View of Sovereignty , Joseph Dorfman hails the volume because “the argument is presented as a general theory of institutions applicable to all the social sciences” (Commons, 1899–1900, p. iii). ¹ The same, of course, might be said of the New Institutional Economics of Oliver Williamson, Douglass North, et al. ² Indeed, the study of institutions and the development of a theory of institutions has become a rather fashionable topic of late within the field of economics. Yet, apart from the occasional obligatory reference to Commons or Veblen, this work has proceeded largely independent of the “old” institutionalism – turn of the century or contemporary. So, why is it that one should be interested in Commons’ A Sociological View of Sovereignty a century after its publication? Is it merely an historical curiosum, or does it offer lessons for doing economics in the modern age? While A Sociological View of Sovereignty is useful for historians of economic thought by virtue of the light that it sheds on the development of Commons’ own thinking, the focus of this paper will be on the lessons that it offers for contemporary economic thinking and understanding – in particular, for conceptualizing the role of government within the economic system, or law and economics in its broader sense.