History of economic thought. Walton Hamilton and the institutional approach to economics

 

In the 1910s, Walton Hamilton (1881-1958) defined himself as one of the founders of the “institutionalist” approach to economics. His original view focused the study of the evolution and dynamics of the markets within a historical framework that is conditioned by social and political forces. As a result, real institutions are overwhelmed by tensions, contradictions and resistance.

His contribution deserves to be brought under analysis in the attempt to develop closer linkages between institutions, markets and political  power in capitalism. In the interwar period, his studies on the United States pointed out both to qualitative transformations in competition and to the dynamics of the monopolistic industries.

Taking into account the dynamics of monopolistic firms, Hamilton inquired on the social and political conditions that could make possible their consolidation in the long run.  Under his perspective, economic relations are overwhelmed by institutional set ups that reveal uneasy partnerships between public power and business.

Hamilton believed  that the evolution of market structures is articulated to political forces. Besides, the social dimension of prices and wages is related to the logic of political power.

Indeed, Hamilton´s contribution suggests the apprehension of the dynamics of economic forces by means of the development of an institutionalist approach that could cope with the social dimension of the markets and the political nature of society.

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