From the Progressives to the Institutionalists: What the First World War did and did not do to American Economics

The structure of the book is straightforward: we are introduced to the founding group and its students, and we are given compelling portraits of some neglected but important figures, Walton Hamilton and Morris Copeland, who stand in for the first and second generations. Next we proceed to the core of the book, the professional milieu of the institutionalist economists, the “personal, institutional, and programmatic bases” of the movement in the institutionalist academic strongholds – Chicago, Wisconsin, Columbia, Amherst, Brookings, and the National Bureau. Lastly, we get an account of the decline of institutionalism in the late 1930s and early to mid-1940s. Institutionalist economics was undone, Rutherford argues, by the failure of movement economists to reproduce themselves (partly caused by migration to law schools and other disciplines), by the Keynesian revolution's successful co-opting of the under-consumption hypothesis, and by the formalist turn of American economics in the late 1930s, hastened by the arrival of mathematically oriented European intellectuals fleeing Nazi Germany, and by European philosophies of science that reconceived what it meant to be scientific in the sciences of society.