Using the ideas expressed in the last post, Commons began to construct the key to his institutional economics methodology which he called the ethical ideal type on pages 741-750 of the second volume of Institutional Economics. He defines the reasonable value as expressed in an ethical ideal type as “highest attainable idealism of regard for the welfare of others that is found in a going concern under existing conditions of all kinds at a given point in historical development.” (Commons, 1934, pg. 741). What does this mean? It must be attainable by a going concern so it must exist in the world. It is specific to the time period under investigation and not for all time. In several places in these few pages, Commons refers to “regard for the welfare of others”, then a page later he talks about “those above the average in their social regard for others” and again “both private self interest and social welfare”. What are we to make of this focus on social welfare, responsib...
This blog has been setup to explore the ideas and philosophy of the American institutional economist John R. Commons.