ABSTRACT
This chapter presents a theory of institutional economics as derived from the decisions of the Supreme Court of the United States. The economic theories were started, in the year 1776, with Jeremy Bentham’s repudiation of Blackstone. Thereafter economists went off on theories of happiness, but courts and lawyers continued on the theory of the common law of England and America. Goodwill is the meeting point of pure institutional economics and pure net-income economics. Institutional economics is the field of the public interest in private ownership, which shows itself behavioristically in buying and selling, borrowing and lending, hiring and firing, leasing and renting. The legal right to withhold is the ultimate basis of all the imperfect or monopolistic competition that has begun to creep into the pure net-income economics of marginal utility. It may be named institutional scarcity superimposed upon the psychological scarcity of diminishing utility.
