ABSTRACT
This article is Hamilton’s presidential address to the Association for Evolutionary Economics at its annual meeting held in Toronto in December 1972. In economics, Hamilton explains, “all theories of value are theories of consumption.” In traditional theories, including neoclassical ones, values come from some sacred authority. In faith-based theories the authority is heavenly. In neoclassical economics the sacred authority is the individual. The values contained in an individual’s utility function or in his or her preferences arise spontaneously from inside that individual. Institutionalists, starting with Veblen, disagree. They point out the inconvenient fact that all human behavior, including consumption behavior, is learned. While Veblen explained conspicuous consumption and much else, Hamilton correctly points out that Veblen’s lasting theoretical contribution was his construction of a theory of consumption based on socially learned behavior instead of sacred inspiration. Furthermore, Hamilton emphasizes, if human wants are socially learned, they are not infinite. The scarce resources-unlimited wants definition of economics is discredited. For more on consumption, see David Hamilton, The Consumer in Our Economy, Boston: Houghton Mifflin, 1962. The importance of this Hamilton article is hard to overemphasize. Among other things, it clears the way for Allan Gruchy’s redefinition of economics as the study of the social provisioning process.
