John R. Commons

John Rogers Commons (1862–1945) was a well-known institutional economist at the University of Wisconsin.

Born in Hollansburg, Ohio, Commons had a religious upbringing which led him to be an advocate for social justice early in life. Commons believed that carefully crafted legislation could enact social change; this view led him to be known as a conservative radical and an incrementalist.

Commons is best known for developing an analysis of collective action by the state and other institutions, which he saw as essential to understanding economic dynamics. In this analysis he continued the strong American tradition in institutional economics by such figures as the economist and social theorist Thorstein Veblen. This institutional theory was closely related to his remarkable successes in fact-finding and drafting legislation on a wide range of social issues for the State of Wisconsin. He drafted legislation establishing Wisconsin's worker's compensation program, which became the first such program in the United States.

In 1934 he published Institutional Economics which lay out his view that institutions were made up of collective actions that, along with conflict of interests, defined the economy. In Commons view, Institutional Economics was the addition of collective control of individual transactions to existing economic theory.

Several of his colleagues (such as Arthur J. Altmeyer) went on to create the social security program in the Franklin D. Roosevelt administration. Commons was a contributor to The Pittsburgh Survey, an unprecedented 1907 sociological investigation of a single American city. His graduate student, John A. Fitch, wrote The Steel Workers, of the key texts resulting from the Survey.

Commons also undertook a major study of the history of American labor. His practical work has been remembered just as much as his theory of institutional economics.

Quotes

• "...An institution is collective action in control, liberation and expansion of individual action."
• "...But the smallest unit of the institutional economists is a unit of activity -- a transaction, with its participants. Transactions intervene between the labor of the classic economists and the pleasures of the hedonic economists, simply because it is society that controls access to the forces of nature, and transactions are, not the "exchange of commodities," but the alienation and acquisition, between individuals, of the rights of property and liberty created by society, which must therefore be negotiated between the parties concerned before labor can produce, or consumers can consume, or commodities be physically exchanged..."

--"Institutional Economics" American Economic Review, vol. 21 (1931), pp.648-657.

References

• brief biography
• Jack Barbash, "John R. Commons: pioneer of labor economics" Monthly Labor Review May 1989, Vol. 112, No. 5 scholarly overview.
• Joseph Dorfman, The Economic Mind in America: 1918-1933 (1959), v. 4.
• John R. Commons, Myself (1964), his autobiography.

• online resources and articles