Symposium on Ekkehart Schlicht's on custom in the economy - Oxford: Clarendon press, 1998

American Journal of Economics and Sociology, The,  April, 2002  by Uskali Maki,  Laurence S. Moss

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LAURENCE S. MOSS *

In November 1999, Uskali Maki organized an interdisciplinary workshop on Schlicht's pioneering book, On Custom in the Economy, at the Erasmus Institute for Philosophy and Economics in Rotterdam. With two exceptions, the papers that follow are the revised versions of the comments presented at the 1999 Schlicht workshop. The first exception is the paper by Professor Roger Koppl, which was prepared only recently to complement some of the salient features of Schlicht's book that were not emphasized by the original discussants. The second is an investigation by Professor Richard E. Wagner into the connections between an older important literature and the recent contributions of Schlicht. The discussion turned out to be an interesting one and Laurence S. Moss took on the task of preparing the manuscript for publication in the AJES.

Schlicht explained in the preface to his 1998 book that his goal was to re-establish "custom in economics [so as to] provide foundations for institutional thinking" and remove the arbitrariness of current thinking about the role of custom (Schlicht, 1998:v; hereafter we shall refer to this book by page number only). The current approach was to interpret custom as basically a convention or rule that endured because it proved itself capable of solving coordination problems in market settings. The implication is that customs are utilized by actors only when they are useful based on some rational calculation. This could only be a minor part of the story and Schlicht began a major research effort to demonstrate in what ways custom flows out from a primordial human desire to "align behaviour, conviction, and emotion tightly with one another" (p. 2).

Schlicht agrees with the popular view that custom is something that arises from "tradition and common usage" but it is tradition and common usage that also "shape preferences, behavioural dispositions, and normative convictions," which themselves feed back and help reshape custom. Schlicht uses the metaphor of a flowing river where the banks of the river govern the flow of the water but the flow of the water also (gradually) reshapes the banks of the river (pp. 11 and 275). Custom is like the banks of the river and the water behaves like active economic activity but it is the flow of economic activity than can and often does feed-back and alter the banks of the river.

What we have here is "an amalgam comprising habitual, emotional, and cognitive elements, which cannot be easily separated" (p. 12). The processes involved are known to psychologists who point to mechanisms that economists and, by implication, modern economic analysis tends to ignore. But a broader economics cannot ignore the findings of modern psychology as Schlicht argues in his 1998 book and in his response essay to his critics that we have included below.

At a time when many sociologists have taken a renewed look at economic behavior and insist that it is "embedded" in social mores and customs that cannot be omitted from economic analysis it is refreshing to have an alternative and most original psychological account of how custom complements homo economicus in the market. Economic calculation is not subsumed within a thick soup sociology but given a strikingly novel and supportive role in framing our understanding of custom.

Rather than speak for or try to summarize the concerns and observations of Schlicht's critics, it is best to let them speak for themselves. At the end we have Schlicht's response to his critics and this will conclude the symposium.

Professor Uskali Maki is at the Erasmus Institute for Philosophy and Economics at Erasmus University Rotterdam (P.O. Box 1738/3000 DR Rotterdam/The Netherlands). Professor Laurence S. Moss teaches at Babson College and is the editor of this journal.

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