John R. Commons
John Rogers Commons (October 13, 1862 – May 11, 1945) was an American political economist, sociologist, and historian, one of the pioneers of the school of institutional economics and the foremost authority on the history of U.S. labor. Commons was an active social reformer, applying information from the social sciences to develop his economic theories. He proposed and achieved reforms that improved conditions for workers, such as workers' compensation, safety regulations, and was involved in the development of the Social security program.
Commons' work, improving the life of labor class, formed a substantial contribution to the betterment of human society in the early part of the twentieth century.
John Rogers Commons was born on October 13, 1862, in Hollansburg, Ohio, but his family soon moved to Indiana, where Commons grew up. His father was a newspaper editor, with strong religious beliefs, who tried to install a sense for social justice into his son. This inevitably influenced Commons’ later dedication to social service, as well as his commitment to social change.
After completing high school, he wanted to teach in elementary school, but without success. Actually, the whole experience of working with children was so unpleasant for him that he decided never to teach again. Instead, in 1882, he went on to study at Oberlin College. After rather poor performance he managed to graduate (1888) and continue with his graduate studies at the Johns Hopkins University in Baltimore, Maryland. He chose Johns Hopkins because of Richard T. Ely, who taught the German Historical School’s approach to economics there.
After spending two years in Baltimore, he accepted a teaching position at the Wesleyan University in Connecticut, and in the same year, he got married. After spending only one year at Wesleyan, Commons left to teach at Oberlin College, but left it soon to accept a higher paying position at Indiana University. He stayed at Indiana again only one year, teaching economics and sociology. After that he went on to Syracuse University in New York where he also stayed only a short period of time.
Commons later found a position with the U.S. Industrial Commission to work on the study on immigration. This was the beginning of his long interest in labor and labor unions. However, during months of study and constant stress, Commons suffered from ill health, and needed months to recover. After that he found job with the National Civics Federation, working on the taxation and labor-management reconciliation. In 1904 he started to teach at the University of Wisconsin at Madison, the position he stayed at the longest in his career. This was also the most fruitful period of his life.
The University of Wisconsin, at the time, had a close relationship with the Progressive Party and Robert M. LaFollette, who asked Commons to support his program of reforms through research. Commons soon engaged in the program, formulating a series of policies on safety regulation in the workplace, workers' compensation, public regulation of utilities, and unemployment. With his work, the University of Wisconsin became the leader in governmental reforms during what was known as the Progressive Era.
Commons served as a member of the Wisconsin Industrial Commission (1911-1913), the U.S. Commission on Industrial Relations (1913-1915), and the Wisconsin Minimum Wage Board (1919-1945).
He also started to write the history of the American labor movement, continuing the work of Richard T. Ely, who had started the study, but was unable to complete it alone. Commons also inherited some files from Carroll Wright, a commissioner of the Department of Labor, before Wright died. Commons published his History of Labor in the United States in 1918.
Commons also served as associate director of the National Bureau of Economic Research (1920-1928) and chairman of the Unemployment Insurance Board of the Chicago Trades (1923-1925).
In his later career, Commons focused on the role of state and other institutions on economic life in general. He published his seminal work, Institutional Economics, in 1934. He continued to teach at the University of Wisconsin until 1933.
Commons died on May 11, 1945, in Fort Lauderdale, Florida.
Commons believed that focusing only on economics cannot be enough to explain the behavior of working people. He thus turned to other social sciences—psychology, history, sociology, and law—to obtain a better understanding of how and why workers behave the way they do. He discovered five key concepts of economics, upon which he later built his reform proposals:
- Equity (fairness for all workers)
- Bargaining (conflict in a workplace can be best resolved through bargaining)
- Reasonableness (bargaining need to be based on social intelligence and reason)
- pragmatism (reforms and change need to be based on practical solutions, not utopian wishes)
- Institutionalism (individuals function economically through institutions)
Commons saw "State," with its system of democracy and equal suffrage, as the main agent of balance between employers on one side, and employees on the other. State’s laws that regulate economic life are mostly directed to protect the business, and thus are mainly of use to employers. State needs also, Commons claimed, to bring laws that would protect common working people—to ensure, for example, health and safety rules or minimum wages.
Commons was a skilled social activist and was able to promote his views effectively. He would never merely theorize about reforms, but would go out into the real world, talk to real people, and ask how and what needs to be changed. He would first obtain the permission of a group of sympathetic employers for a tryout of his ideas in, for example, safety regulations or workers' compensation. After the results showed that his ideas were workable, he would start a campaign for a wider application of the policies and state support for the employers who apply the policies. He managed to have the state to institute the famous Wisconsin worker's compensation program, which was the first such program in the United States. Other policies where his contribution was sound were in the area of payment of compensation for injuries suffered in the workplace, public regulation of utilities, unemployment insurance, and social security-type retirement programs.
Commons also studied the history of labor unions. He undertook two major studies of the history of labor unions in the United States. Beginning in 1910, he edited A Documentary History of American Industrial Society, a large work which preserved many original source documents of the American labor movement. Almost as soon as that work was complete, Commons began editing his History of Labor in the United States, a narrative work which built on the previous 10-volume documentary history. He published this work in 1918.
Commons is well known for developing an analysis of collective action by the state and other institutions, which he saw as essential to understanding economics. In this analysis, he continued the strong American tradition in institutional economics by such figures as the economist and social theorist Thorstein Veblen. This institutional theory was closely related to his remarkable successes in fact-finding and drafting legislation on a wide range of social issues for the state of Wisconsin.
In 1934, Commons published Institutional Economics, which laid out his view that institutions were made up of collective actions that, along with conflict of interests, defined the economy. In Commons' view, institutional economics added collective control of individual transactions to existing economic theory:
Collective action ranges all the way from unorganized custom to the many organized going concerns, such as the family, the corporation, the trade association, the trade union, the reserve system, the state. The principle common to all of them is greater or less control, liberation and expansion of individual action by collective action (Institutional Economics, 1931).
Commons emphasized the legal foundations of an economy, seeing laws of the State or other institutions as playing a fundamental part in economic theory. In economics everything is based on relationships, and thus laws are necessary to ensure each relationship functions properly:
Either the state, or a corporation, or a cartel, or a holding company, or a co-operative association, or a trade union, or an employers' association, or a trade association, or a joint trade agreement of two associations, or a stock exchange, or a board of trade, may lay down and enforce the rules which determine for individuals this bundle of correlative and reciprocal economic relationships. Indeed, these collective acts of economic organizations are at times more powerful than the collective action of the political concern, the state (Institutional Economics, 1931).
Commons believed that economics cannot be separated from the political or social system, but should be studied together with it.
Commons contributed to economics both with the theory of labor and the theory of institutional economics. He was the first American economist who studied and who tried to improve the conditions of labor. His legislation proposal led to the establishment of Wisconsin's workers' compensation program, which was the first of this kind in the United States. His students, Edwin Witte and Arthur Altmeyer, were involved in the creation of the social security program in the 1930s.
Commons was a contributor to The Pittsburgh Survey, a 1907 sociological investigation of a single American city. His graduate student, John A. Fitch, wrote The Steel Workers, which became a classic depiction of a key industry in early twentieth century America.
- Commons, John R. 1893. The Distribution of Wealth. New York: Augustus M. Kelley.
- Commons, John R.  1967. Social Reform and the Church. Harvard University Press. ISBN 067800286X
- Commons, John R.  1989. Proportional Representation. Harvard University Press. ISBN 0678002223
- Commons, John R.  1967. Races and Immigrants in America.. Harvard University Press. ISBN 0678003211
- Commons, John R.  1964. Labor and Administration.. Harvard University Press. ISBN 0678000352
- Commons, John R. 1918. History of Labor in the United States (4 Vols.). Augustus M Kelley Pubs. ISBN 0678040389
- Commons, John R.  1974. Industrial Goodwill. Ayer Co Pub. ISBN 0405021135
- Commons, John R.  1974. Industrial Government. Ayer Co Pub. ISBN 0405021135
- Commons, John R. 1924. Legal Foundations of Capitalism. Lawbook Exhange. ISBN 1584775971
- Commons, John R. 1931. "Institutional Economics." American Economic Review, 21, 648-657.
- Commons, John R.  1989. Institutional Economics. Transaction Publishers. ISBN 0887388329
- Commons, John R.  1964. Myself.. Madison, WI: University of Wisconsin Press.
- Commons, John R. 1970. The Economics of Collective Action. University of Wisconsin Press. ISBN 0299053601
- Commons, J.R. & Andrews, J.B.  1967. Principles of Labor Legislation. Harvard University Press. ISBN 067800207X
ReferencesISBN links support NWE through referral fees
- Barbash, Jack. 1989. "John R. Commons: Pioneer of Labor Economics." Monthly Labor Review, 112: 5. Retrieved on December 27, 2006.
- Dorfman, Joseph. 1969. The Economic Mind in American Civilization: 1918-1933.. New York: Augustus M. Kelley Publications. ISBN 0678005400
- Fitch, John A.  1989. The Steel Workers.. Pittsburgh: University of Pittsburgh Press. ISBN 0822960915
- Thayer, Watkins. John R. Commons and His Economic Philosophy. San Jose State University. Retrieved on December 27, 2006.
All links retrieved August 3, 2022.
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