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Schmid, Commons and Transactional Types

The various types of transactions are crucial to a Commons-Schmid type approach to institutional economics.  Here we will briefly explore the various types of transactions proposed by Schmid and Commons.

 Schmid
1. Bargaining Transactions - a mutual consent of transfer of property rights between legal equals; this could include individuals or groups of individuals; there are crucial issues regarding who has what power or authority relative to the other parties

2. Administrative Transactions - a superior and inferior relationship; position of superiority can be a public administrator, legislator, police officers or a private owner; can be confusing because it can change rights but also be subject to rights as well; may be between two parties but for the benefit of third party; source of authority can be be a private contract or public law

3. Status and Grant Transactions -  there is no bid or command, a one way movement of rights based on habit or benevolence of the giver; in a grant no return or transfer of rights occurred, it is a one way transfer

Schmid believes that these categories, derived at least partly from Commons, are only partly useful for analysis and states that he will go on in his book to derive a different set of factors within which we will consider performance analysis for institutional change

Commons
1.  Bargaining - negotiating amongst legal equals over the transfer of property rights; outcome of the transaction depending on the relative power and resources of each entity or person

2.  Managerial - an authoritative or hierarchical relationship where a legal superior is instructing a legal inferior such as manager and worker

Rationing -  transfers property rights based not on market type bargaining but rather through an an administrative process such as legislature, public commission, executive

So we see both commonalities and differences across Schmid and Commons.  The bargaining transaction type is common to both and similar in layout.  There is nothing strictly comparable in terms of the status and grant transactions that Schmid lays out. Arguably, Schmid's administrative transactions could be a proxy for both rationing and managerial transactions that Commons wishes to hold out as important.

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