John Rogers Commons Are His Insights Important in Teaching.pdfVIP

John Rogers Commons: 1 Are His Insights Important in Teaching Modern Labor Economics? Francis M. McLaughlin2 Introduction John Rogers Commons (1862-1945) was one of three most important early twentieth century American economists identified as Institutionalists. The others were Thorstein Veblen, and Wesley Clair Mitchell. Commons was also the most prominent American labor economist prior to World War II. He joined the faculty of the University of Wisconsin at Madison in 1904 and remained there until 1934. He was the major figure in what was known as The Wisconsin School. At Wisconsin Commons worked closely with Robert LaFolette and the Progressive movement, and many of his colleagues and students played major roles in Roosevelt’s New Deal. His influence in American labor economics was eclipsed after World War II by a resurgent neoclassical labor economics that gradually relegated Commons’ institutional orientation to the periphery of economic discourse. A common opinion among neoclassical economists is that the work of institutional economists in the Commons tradition was largely descriptive and lacked theoretical content. Commons, however, presented his major text Institutional Economics3 as a work of economic theory. This paper contains a description of the theoretical core of Institutional Economics and an evaluation of it from the perspective of its potential usefulness in the teaching of modern labor economics. Part I describes the theoretical perspective of neoclassical economic theory in order to clarify the institutional perspective by contrast. Part II describes Commons’ alternative perspective. Part III presents the conclusions derived from this comparison of the two alternative perspectives.