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Making Economic Thought Rational: An Institutional Perspective

Classical economic theory grasps ratio in accordance with its own philosophical foundations. Hypothetical premises of marginalist revolution, however, obviously lack such foundations. Rationality is instrumentalized in line with teleological intentions. Even heterodoxist approaches may well consolidate the extensions of this function. This disposition, a legacy of positivism, refers to a paradigmatic problem, rather than an impasse of the discipline. In order to analyze the established economic rhetoric, basic concepts of economics must be scrutinized semantically. Rationality, in this context, can be considered as the achilles’ heel of the traditional approach, rather than as its foundation. Rational mechanism is inherent to the present study, since it pursues an epistemology in parallel with ontology. The methodology of Institutional Economics provides the present attempt with a range of motion.

Rationality, Bounded Rationality, Marginalism, Institutionalism


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