ABSTRACT
Institutional economics originated in the work of Thorstein Veblen, John R. Commons and Wesley C. Mitchell, as well as numerous others, including some, very eclectic, like John Maurice Clark, who worked within both institutional and neoclassical economics (Gruchy 1947; Mayhew 1987). 1 Institutional economics has at least three facets: it is a body of knowledge, an approach to problem-solving and a protest movement. Institutionalists both critique orthodox neoclassical and radical Marxist economics and affirmatively develop their own ideas. This has led to tensions within institutionalism: first, some institutionalists see their work as complementary to that of neoclassicism while others believe that the two are mutually contradictory; second, some emphasize criticism and others the creative development of a corpus of insti-tutionalist theory; third, institutionalists themselves attempt to develop their ideas along different lines. The situation has left institutionalists exposed to the criticism that they have been essentially negative – a criticism whose incorrectness will be shown below. The three facets of institutionalism and the internal divisions within institutionalism will be considered in sequence.
