Economic rationality in American institutionalism

Abstract

This article examines how American institutionalism conceives economic rationality as a historically and socially conditioned process. It analyses the contributions of Thorstein Veblen, John R. Commons, Wesley C. Mitchell, and Richard T. Ely who, influenced by evolutionary perspectives and social psychology propose that habits, customs, and institutions shape individual decisions. Instead of reducing behaviour to a utilitarian calculus, they highlight the relevance of emulation, imitation, the search for prestige and the pressure exerted by the cultural and technological environment when it comes to the subject’s own recognition of the ends of his or her actions or omissions. In addition, collective mediation, through legal norms, policies, and customary practices redirects the ends and means of each subject, generating tensions between individual rationality and collective adaptation. This interdisciplinary vision, which integrates history, sociology, and psychology allows us to understand the complexity of human motivations, the limited vision implied by the standardised definition of rationality, and the constant evolution of economic institutions.