The Tool Box of Institutional Analysis

From Karl Polanyi
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[1] Our subject - general economic history - has been since M. Weber shifting its subject and at the same time making great advance, both conceptually and empirically.

The conceptual advance is mainly due to a new tool box -- that of institutional analysis.

I will today briefly survey the chief tools and then proceed to the question what help they can be outside of economic history, primarily in the study of contemporary problem.

1. The economistic fallacy is the confused identification of the human economy with its market form.

(a) Restricting the economy to market phenomena.
(b) Extending criteria of market to all economy, (i.e. construing the economy as a supply-demand-price mechanism). Consequently: Introducing concepts of 3d level exchange, such as
gain (3d level of exchange)
surplus: 3 level exchange term.

Catallactic triad!!!

2. The two meanings of economic:
the formal meaning provides the tools for a theory of the market (a substantive economy!).

[2] Fateful result: inseparability of trade-money-market.
(1) Separate and independent origin of trade and money uses (from markets).
(2) Separate lines of internal and external development of trade, money and markets.
(3) In non-market-dominated economies, reciprocity and redistribution integrating the elements of trade, money and markets.

This permits a redefinition of trade, money and market which contrasts their catallactic definitions.

These terms constitute the tool box of institutional analysis. They serve a double purpose.


Text Informations

Lecture: Columbia University, New York - Outline and report, {1947-1953}
KPA: 31/01, 1-3