The Integration of Economics and Society

Abstract

Institutional economics can and must play an important role in realigning economic theory with the evolution of human society. As culture, experience, and values within society change, they become more removed from the traditional economic explanations of the utilitarian philosophy. Just as that philosophy emerged to explain the cultural transition of the Industrial Revolution two centuries ago, so must the cultural transitions occurring today be captured in an expansion and realignment of the existing economic paradigm. The focus of the discussion here is on two central issues: the limiting, restrictive nature of the traditional economic paradigm dominating much of present-day Western society, and a suggested expansion of that paradigm. The first section identifies the alienating nature of modern capitalism that emerges as a result of the growth of inhumane technology and the reliance on market organization to meet preconceived goals in society. The second section focuses on the social contradiction that occurs when the economic paradigm assumes a dominant role over the political and cultural components of society. These contradictions are discussed in terms of the loss of self-direction and value determination by individuals in society. The third section is devoted to a discussion of a process for creating meaning through mutual sharing of ideas, the development of trust and openness, and cooperation among individuals.