John Maynard Keynes Between Old and New Institutionalism

The article considers the possible compatibility (in epistemological and ontological terms) of the conceptions of convention and institutions in the thought of John Maynard Keynes, Thorstein Veblen and Douglass North. We argue, first, that while Veblen suggests an approach to institutions based on instincts, North sustains an approach to institutions based on rational choice, which implies distinct conceptions about institutions and the social world. We then present Keynes's ontological commitments and the epistemological implications of his ontology. We conclude that there is a background ontological compatibility between Keynes and the late North in that both accept that the socioeconomic world is fundamentally uncertain and non-ergodic; also that Keynes is epistemologically closer to North than Veblen in studying the economy as a market system embedded in social institutions; and finally that Keynes's treatment of individual action is closer to Veblen’s than North’s, in that both Keynes and Veblen see human action as based on instincts and not only on rationality.