A few initial thoughts based on writings from Al Schmid and his first edition book, Property, Power and Public Choice published in 1978. Lets start with a direct quote, "the system of analysis used here begins with the fact of human interdependence. It is the public choice of property rights (institutions) that control and direct this interdependence and shape the opportunity sets of the interacting parties." In these two sentences, we can unpack a lot of information and insight. We start with interdependence. Al started with the idea that we get in each others hair and that especially in the modern economy we are tied together. This is not the Robinson Crusoe economy where each individual simply works on their own accord to raise their own product. Ultimately, Schmid will lay out several forms of interdependence. The second part of this passage is related to property rights and institutions. In the spartan school, institutions are thought o...
A. Allan Schmid was one of the main founders and thinkers in the Spartan School of Institutional Economics. He took a balanced and pluralistic view of the value and importance of the various approaches and methodologies. One of the key questions is the relationship between institutional economics and neoclassical (or so called orthodox) economics. Schmid, as we will see, took a very balanced and nuanced view of this relationship. This view helps set the stage for a more general exploration of institutional economics. His writing illustrates his nuanced view of these issues. Schmid writes that "orthodox economics misses many issues of power" and "neoclassical economics has focused narrowly on that part of psychology that can be captured in the concepts of utility and preferences" (Schmid, pg. 3 and 4). At the same time, Schmid is complimentary of some of the important advances in neoclassical and welfare economics, he writes that, "welfare economics ...