ABSTRACT
The objectivity standard itself disguises the relationship between economic theory and the social consciousness that forms the values that are taken as givens. This chapter presents the valuational foundations of institutional economics as clearly and cogently as possible. The normative compass that guides institutionalists in their work is the instrumentalist theory of value that emerged through the works of philosophers William James, Charles Peirce and, most notably, John Dewey. A number of excellent historical accounts of the development of the instrumentalist theory of value are already available in the institutionalist literature. The ceremonial values, in contrast, are the result of the human capacity to create fictions and have, accordingly, that same character. The expression that “values are cultural in origin” has a very specific and significant meaning to instrumentalists and it is important to distinguish this view from other interpretations. To the instrumentalist, value is to be understood as continuous with the whole of experience.
