The difference between mainstream economics and some other approaches is rarely as clarified and explicit as in Hicks’ seminal book ‘Value and Capital’ (1939, Oxford, Clarendon Press). In the Itroduction (p. 7) he gave the following statement:
This is a work on Theoretical Economics, considered as the logical analysis of an economic system of private enterprise, without any inclusion of reference to institutional controls. I shall interpret this limitation pretty severely. For I consider the pure logical analysis of capitalism to be a task in itself, while the survey of economic institutions is best carried on by other methods, such as those of the economic historian (even when the institutions are contemporary institutions). It is only when both these tasks are accomplished that economics begins to near the end of its journey. But there is a good line for division of labour between them, and it is a line we do well to observe. It must be realized, indeed, that, as the price of this austerity, the purely theoretical economist becomes unable to say that any opportunities or dangers he diagnoses are or are not present in the actual world, at any particular date. He is bound to leave that to a separate investigation. But he will at least have helped that other investigator in showing him some things to look out for.
No further comments are needed, I think. Today, when contemporary economists have been making serious efforts to find the adequate place for theoretical economics and tend to regard it as spurious, so clear-cut a manifesto proves to be highly illuminating. Looking into the effects of social institutions on the behaviour performed by the agents is not on the agenda of mainstream econonomics, simply put. This is the essence of the division of labour between the possible scientific approaches to our socio-economic reality, as Max Weber suggested. Economists in the Hicksian sense are responsible for elaborating the rational core in order to take the consequences of rational utility-maximizing behaviour into account. It is out of question that investigating the effects of social institutions is equally important, but it is a job to be done by others… historians, sociologists, economic politicians and, of course, institutional economists. It is difficult to imagine how different the reception and the contemporary evaluation of mainstream economics would be if our profession felt tempted to recall such classical texts. I am afriad our current debates are about an enormous quantity of unread and forgotten works in theoretical economics. To be sure, mainstream economics is not something to give upon but it is a project the exact scope of which should be urgently reconsidered… This is a mission.