Radical institutionalism, though not as developed as its cousin, Marxism, is also a profoundly critical theory of industrial capitalism. Radical institutionalism is based on the works of Thorstein Veblen and, to a much lesser extent, on the works of John R. Commons. Central concepts of radical institutionalism include (1) The economy is a process, not an equilibrium; (2) Socialized irrationality frequently overwhelms the would-be solidarity of exploited classes; (3) Power and status combine with myth and authority to sustain tyranny; (4) Equality is essential to the good life; (5) Values and ideology support (6) Participatory democracy; and (7) Radical transformation rather than incremental adjustment is called for under the current dispensation. Radical institutionalism is not based on the labor theory of value, but does share with Marxism certain critical points in relation to neoclassical economic theory.
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