John Rogers Commons believed in the power of legislation, and his ideas helped to craft social change. His views were widely regarded as radical for the time, and some called him an “incrementalist” or someone who preferred methodical leaps to risky jumps. He was also an institutional economist, favoring working class and progressive ideologies.
Commons made a name for himself by developing an analysis of how the state and its institutions collectively acted. In lay man’s terms, he was a fact finder. He was someone who would seek to understand how an organization was supposed to act and then discover what was happening behind the scenes. That penchant for knowledge helped him draft several pieces of legislation. One of his more significant contributions was helping to establish a worker’s compensation program in Wisconsin, one of the first of its kind in the United States.
He also was the first to recognize that the economy is driven by collective action. He argued that a company had individuals, which collectively were responsible for its outcome. However, their actions could be at conflict. Those conflicts are one of the primary factors that define the economy according to Commons.
Commons was also involved in several important sociological studies of the time. He was part of a study that depicted the lives of steel workers, a key industry during the early 20th century. That gave economists and legislators a clearer picture of the working class lifestyle. Commons also helped to edit the History of Labor, a narrative survey that helped to frame how labor had changed. His work helped frame early American policies on labor, which formed the ground work for the economy we have today.
About the Author: Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Phineas Upham website or LinkedIn page.