Political Government and Economic Government in J.R. Commons’ Institutional Economics

Abstract

This article clarifies the evolutional theory of money as an institution presented by the American institutionalist J.R. Commons, from the perspective (dichotomy) of the political government (“sovereignty”) and the economic government (the alliance between the pay community and industry). This article identifies two interactive processes between the political and economic governments, and integrate them to present a constant evolution driven by mutual dependence, conflict, and the politics of these governments. Finally, it places Commons’ proposition of an “advisory committee,” a novel governance system of the debt market, as a boundary system in the gap between the governments.