“Contingency, Irony, and Solidarity” in the Era of Polycrisis: Institutionalist Economics beyond the t/T Duality

This article has two objectives. The first is to understand why the 2008 Great Financial Crisis (GFC) did not lead to continuing intra-disciplinary debates between mainstream and heterodox economists. This gap is attributed here to mainstream macroeconomists’ insistence on using a general equilibrium analytical lens: so doing invisibilizes key aspects of the GFC and restricts the space for inter-paradigmatic exchange. This leads to our second objective: to explore the place of institutional economics in an era in which our community exists outside the economics mainstream. Assisted by insights from Richard Rorty and Tom Shippey, we argue that institutional economics’ role remains robust precisely because of features already present in the earliest original institutionalist explorations: analytical flexibility, and specifically understanding that no one model can fully describe lived reality or guide policy responses; a willingness to challenge the use of power for positional advantage, either by privileged agents in the economy itself or by economists defining acceptable terms of theoretical discourse; and an awareness that while social scientific inquiry can “make” (t) truths by careful explorations of socio-economic dynamics, it cannot “find” (T) truths that exist independent of human understanding.