Institutions and Individuals
A Review Essay of Geoffrey Hodgson, Economics and Institutions
Originally published in Critical Review
Peter Boettke reviews Geoffrey Hodgson's book Economics and Institutions: A Manifesto for Modern Institutional Economics.
Traditional institutional economics argued that the methodological individualism of both classical and neoclassical economics was grounded in a false conception of human nature and a pre‐scientific understanding of economic life. Geoffrey Hodgson has provided a restatement of this position and extended the institutionalist critique to modern developments within economics at both a positive and normative level. In the course of doing so, Hodgson both draws on and differs from developments within modem Austrian economics. It is argued that Hodgson misunderstands key aspects of the Austrian project and as a result his indiscriminate criticisms of methodological individualism and classical liberalism are not convincing.