Legal Foundations of Capitalism [Paperback]

John R. Commons (Author)

Book Description

Publication Date: June 1957 | ISBN-10: 0299015149 | ISBN-13: 978-0299015145

The aim of this volume is to work out an evo-lutionary and behavioral theory of value. To do so thoroughly, Commons examines the decisions of the courts. Doing so compelled an exami-nation of what the courts mean by reasonable value. This edition is graced with a special introduction that places Commons in proper academic as well as intellectual context.

--This text refers to an alternate Paperback edition.

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Review

Commons carried this analysis further along his chosen line than any of his predecessors. Into our knowledge of capitalism he has incorporated a great body of new materials which no one else has used adequately. --Wesley Mitchell, American Economic Review, XIV (1924) 253 --This text refers to the Hardcover edition.

Product Details

• Paperback
• Publisher: Univ of Wisconsin Pr (June 1957)
• Language: English
• ISBN-10: 0299015149
• ISBN-13: 978-0299015145
• Average Customer Review: 5.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #5,557,159 in Books (See Top 100 in Books)

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14 of 16 people found the following review helpful:

5.0 out of 5 stars Extraordinary Insight into the connection between law and economics, April 18, 2007

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Salty Saltillo (from the road, USA) - See all my reviews

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This review is from: Legal Foundations of Capitalism (Classics in Economics) (Paperback)

I read this book back in law school, intrigued by the title. Initially I was confused by Commons's very strange analytical style (he is quite sui generis in his analytical framework) but the final product is an excellent education in the role courts and judges in UK and USA played in the emergence of the US economy pre-WWII. Within the right frame of mind, this book can be a very valuable opportunity for coming to appreciate the law-economics nexus in a way that gets clouded or obscured by the presuppositions of neoinstitutional economics and the Law & Economics movement. Commons' empirical data in this book consisted of 500 years of court cases involving litigation of commercial questions. From these court cases, Commons extracts a frame of analysis. Commons' method often involves on the one hand, finding analogies and connections between concepts that in our daily and professional lives we treat as separate and synthesizing them into new analytical tools (such as "Working Rules" and "Transactions"), and on the other hand, taking concepts we take for granted as reflecting a certain unity, and busting them open to reveal the internal diversity of different kinds of ideas/events/phenomena that get subsumed and supressed by such a unifying concept (this is done with particularly good result with the concepts of "value", "property" and "liberty" although one is left wishing Commons had not limited himself to judges' opinions in constructing his historical studies.
I think that recognizing this methodology is a key to understanding what Commons was attempting to accomplish in this and in his later works. Commons' technique results in a polyphonic argument that moves in multiple directions at once, sometimes coming together harmoniously into brilliant insights of synthesis. The final framework of analysis that emerges is summarized in Commons' final book - the Economics of Collective Action - which one might want to read as a good sort of introduction to this and to his magnum opus, Institutional Economics.

One of the implications of Commons' analysis is the idea of collective action - it seems to become a logical, defensible, necessary next step in American capitalism from Commons' 1924 point of view. And for many years, the idea gained momentum, but was ultimately gutted and destroyed by the Wagner Act and by a massive ideological campaign launched by the economics profession about the supposed inefficiencies of collective protection and bargaining.

But perhaps one of the richer take-aways of this book for contemporary readers is that, despite the title, one gets a sense that "capitalism" is a rather meaningless word. Commons' framework serves, more than anything, to drive home the fact that our current economic, political, legal, social context - or anyone's context - is really a set of particulars, each with its own history and baggage. Lawyers, I think, understand this since a single change in law, a shift in the allocation of liabilities, or a change in the interpretation of a word, can, slowly but surely, change the entire direction of a society and its economy. In fact, "capitalism" is a rather troublesome word whose role in our language and society seems to gloss over a vast internal diversity of economic practices, institutional frameworks, and social values over time and from place to place, subsuming it all under a catch-all phrase that doesn't really stand on its own two feet in the end. The value of using such a code word is that it allows people like Thatcher to cry "TINA" to shut down opposition to the status quo. A certain popular - though misguided - branch of progressive critical thought spends a lot of effort constructing critiques of capitalism, a tradition started by Marx and the social theorists and just as strong today, as if to confront Thatcher and the rest of the TINA contingent front-on. After reading Commons, I would hope that it would be as apparent to others as it is to me that such a project is futile. We would probably be better off banishing the word from our language. Frankly, I don't think there is any such thing as "capitalism." Capitalism is always used as a sort of placeholder for the any given speaker's internalized conception of the economic, political, and social context in which the speaker finds him- or herself, but rare - if non-existent - is the critic who is able to separate the contingent, local, temporal from some underlying, enduring, constant presence that we can point to and say "ah, here is the core of 'capitalism', whether in 1855 Paris or 1990 Bangkok, or 2007 Toronto". For example, a book I just started reading, by a prominent Italian-American sociologist begins with the claim that "over the lastst quarter of a century something fundamental seems to have changed in the way in which capitalism works. In the 1970s, many spoke of crisis." What crisis? Whose capitalism? Author and reader all seem to take for granted that they all know what capitalism is. I don't think for a minute that Mexican "capitalism" is really that similar to American "capitalism" or to Korean "capitalism" or any other country's capitalism. A thorough reading of Commons will dispell such delusions. Even if we could identify some common demoniminator among countries and over time, it would have to be such a minor element of the overall economy that it wouldn't make sense to frame the debate around such. After Commons, it doesn't make sense to talk in the abstract about grandiose systems, whose internal content is presuppsosed and allegedly comes predefined. Rather, all we are left with are specific policies, practices, institutions, and behaviors, all of which are subject to forces of change and inertias - in other words, all we can meaningfully talk about is the particulars, the subtle changes in "Working Rules," the meaning of "Property", the different kinds of "Bargains" that are available to different participants with respect tot different resources in a given context - in short, who has power to do what and with what consequences. Any grandiose discourse of "Capitalism" seems naive and senseless. It would be refreshing for us progressives if we could get out of the "No Alternative to Capitalism" debates so that we can role our sleaves up and start talking about real issues, rather than discussing the how to replace Capitalism over an espresso in a coffee shop.

0 of 9 people found the following review helpful:

5.0 out of 5 stars need help, November 27, 1999

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This review is from: Legal Foundations of Capitalism (Classics in Economics) (Paperback)

I need to know all about John R. Commons What did he do in all his life?, What was his best book? etc..

0 of 10 people found the following review helpful:

5.0 out of 5 stars need help, November 27, 1999

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hilda ortiz (MEXICO) - See all my reviews

This review is from: Legal Foundations of Capitalism (Classics in Economics) (Paperback)

I need to know all about John R. Commons What did he do in all his life?, What was his best book? etc..