Rutherford, Dale Bush and the limits to

institutional change

Roberto Resende Simiqueli

PhD in Economic Development
Universidade Estadual de Campinas - UNICAMP
rrsimiqueli@gmail.com

Thorstein Veblen's work, especially his Theory of the Leisure Class, remains as
one of the most innovative chapters in the History of Economic Thought. His peculiar
assessment of the leisure class, of the ground upon which institutions are built and
transformed, and of the links between violence, ownership, labor exploitation and
gender relations all have provided critical and radical scholars with an interesting set
of questions on how much contemporary societies have changed, while preserving
some of their most archaic traits. The struggle between conservatism and change
plays a pivotal role in Veblenian analysis.
As such, it comes as no surprise that several of his disciples and students have
followed on his footsteps and dedicated extensive parts of their work to similar issues.
The overarching themes of how institutional change and innovation are able to trump
the forces of conservatism, or how the institutions built around leisure class
prerogatives, privileges and habits of thought are able to discipline and constrain
change have remained some of the most important elements of diverse trends in
institutional economics. Out of the researchers that have remained true to Veblen's
original institutionalism, two perspectives provide interesting takes on this question.
Malcolm Rutherford addresses the age-old question of how institutions change
by tackling the dichotomy between instrumental and ceremonial values. In Thorstein
Veblen and the Processes of Institutional Change (1984), the author discusses how
institutional schemes grow and develop around their own internal logic, which might
accommodate or promote specific lines of technological change. Rutherford also
states that institutions in this scheme may adjust to new technology or interfere with
technological insight, resisting the crucial changes that would have been brought by
innovation.
Paul Dale Bush, on the other hand, builds his analysis of institutional change
around the idea of behavioral patterns prevalent in different institutional settings,
summarized in the notion of ceremonial dominance: a measure of how averse to
structural change a given system would be. While also resorting to the instrumental-
ceremonial dichotomy and to the technological dynamic as the main driving force
behind change, Dale Bush is original in his assessment of the different outcomes of
institutional change, understood as a change in the value structure of a given
institution. In The Theory of Institutional Change (1987), the author distinguishes
between progressive and regressive institutional change, understood as situations
where change is effective, being carried out by technological dynamics and
incorporated into the system, or signified into a progressive varnish of the value
system and behavioral pattern en vogue in a given institutional scheme, respectively.
The phenomenon of ceremonial encapsulation plays a particular role, in these cases:
for Paul Dale Bush, change must always respond to the forces aiming to discipline it,
taming its main drive and turning structural changes into focal, localized ones.
 Our aim, with this paper, is to revisit Rutherford and Dale Bush's theories of
institutional change, as well as some of the comments by other researchers on these
perspectives. As such, we briefly analyze the characterization of institutions in The
Theory of the Leisure Class, as well as their origin, development and change. After a
brief review of the role played by institutional change in the works of the first
students of Veblen's work, we delve into the treatment of these issues in Thorstein
Veblen and the Processes of Institutional Change, by Malcolm Rutherford, and
Thorstein Veblen and the Processes of Institutional Change, by Paul Dale Bush,
followed by the debate around the two theses. On our closing remarks, we provide a
critical reassessment of both papers, aiming to contribute to the debate on institutional
change and conservatism.