Progressive Path-Dependency?

Abstract

Path-dependency is typically associated with a “lock-in” that is suboptimal. The sub-optimality of this “lock-in” is attributed to a degree of ceremonial encapsulation, eroding instrumentality, whereby network effects, technical and/or behavioral, create a state of irreversibility. However, all new ideas and technologies are ceremonially encapsulated to a degree, as they are socially embedded. Yet when the term path-dependency is invoked, it often has a negative connotation implying there is a preferable alternative: a state of no ceremonial encapsulation or pure-instrumentality? If so, this implies ceremonial habits of thought are merely there to be overcome. Yet ceremonial habits of thought are ever-present. This article, therefore, theorizes progressive institutional adjustment by considering how we can account for ceremonial habits of thought as more than a barrier, but also something to be utilized to facilitate change. By using rhetoric as a tool, we can play into ceremonial habits of thought, weaving policy through the ceremonial net to implementation where its instrumentality can be revealed, and a lock-in can form as constituents become accustomed to the material benefits provided. It is here where a progressive path-dependency is formed.

Keywords:

• path-dependency
• institutional change
• ceremonial encapsulation
• rhetoric
• legitimation

JEL Classification Codes:

• B50
• E61
• H50
• I38
• O20
• Z10

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1 Revisiting David’s (1985) article, Barnes, Gartland, and Stack (2004) and Hall, Lacasa, and Günther (2011) analyze the phenomenon through an institutionalist lens, arguing the focus needs to be on the habitual factors, while elucidating how an institutionalist lens provides a more comprehensive understanding.

2 The definition of institutions in this article is Veblen’s, defining them as, “settled habits of thought common to the generality of men” (1909, 626).

3 The line between cumulative causation and path-dependency is unclear in the literature. Sometimes they are used interchangeably, sometimes path-dependencies are characterized, implicitly, as a subset of cumulative causation, sometimes path-dependency is used more when discussing the introduction of technologies and the contingencies that affect the chosen technologies, but not associated with societal institutions themselves. There is not space here, but there is a need to clearly elucidate the relation of these two concepts in institutional thought.

4 When arguing revolution is axiologically inconsistent with an evolutionary approach what is being argued against is the notion Marx gives us when he wrote, “With the change of the economic foundation the entire immense superstructure is more of less rapidly transformed” (Marx [1859] 1978, 5). From an institutionalist perspective, habits of thought (which would be categorized into the superstructure) can take years to adjust creating the institutional landscape necessary to support alternative material conditions. A rapid change in the material conditions can speed up that change, for example, how the appearance of the coronavirus put into the popular lexicon terms and phrases like “flattening the curve,” “social distancing,” “PPE,” “N95,” “essential workers,” etc. This is something Veblen recognized when he argued that the material exigencies can lead to necessary rapid change, but when thinking about progressive policy, the goal is to avoid reaching a point where the material conditions are so dire that habits of thought are forced to change rapidly, for the simple fact that in such conditions could lead to a number of outcomes, not necessarily in a progressive one (e.g. the rise of Nazi Germany). Progressive economic policy’s goal should be to avoid reaching such extremes in material existence in an effort to alleviate the suffering of those without requiring it to increase before change can occur. An accelerationist position on change is antithetical to an Institutionalist axiology.

5 This does not mean we should not continually try to replace ceremonial habits of thought with instrumental, if I believed this I would not be an educator, however, when advocating policy, we should not start here.

6 As Gordon argued, “The problem is how to rework eternally obsolescent behavior norms so that they better serve society’s needs” (1984, 380).

7 This is a time invariant aspect of human nature, the need to mitigate arbitrariness, as Pierre Bourdieu stated, “[e]very established order tends to produce (to very different degrees and with very different means) the naturalization of its own arbitrariness” (Bourdieu 1977, 164). This naturalization is done through the formation of habits of thought, which are the foundation of the ontological and psychological security needed to undertake action.

8 This term comes from Anthony Giddens’ (1990) text, The Consequences of Modernity, developed to describe how, in modernity, habits of thought are formed to maintain a level of ontological and psychological security necessary for undertaking action.

9 See Jacob Powell (2023) for a full articulation of this argument (which was written after this present article).

10 This decreases the index of ceremonial dominance in the first instance. The second instance will come when instrumentality is revealed and instrumental behaviors begin to replace ceremonial behaviors.

11 Waller (1988) conducts specific case studies of agricultural subsidies and veteran affairs benefits to highlight the role of reciprocity in facilitating legitimacy for these policies.

12 This is a major point of Brown (1992), specifically he addresses this in the context of Lenin style Vanguardism, arguing the use of authoritarian means, without garnering legitimacy, is likely to lead to a continual reliance on authoritarian means to keep the change in place, ultimately undermining democratic institutions, which would be inconsistent with an institutionalist axiology.

13 Waller highlights the role of ceremonial habits of thought in mitigating instrumental use of fiscal policy in a number of articles (1987; 1988; 1989; 2014; 2015).

14 A Gallop poll asking the question, “Which of the following approaches for providing healthcare in the United States would you prefer—[ROTATED: a government-run healthcare system (or) a system based mostly on private health insurance]?” found support for a government-run healthcare system move from 35% in November 2010 to 42% in November 2020 (Gallup 2021).

15 Again, this does not mean that there might not come a time when rapid or revolutionary change is needed given the material exigencies, but this should not be our goal, to reach a point of such material suffering. Axiologically Institutionalists are committed to using progressive institutional change now to eliminate material suffering, with the goal of not reaching a point where the material exigencies are so bad that rapid change is forced. At such a point it would be difficult if not impossible to direct such change in progressive directions (and assuming it would inevitably lead to a more progressive outcome is teleological).

16 There is a temporality to this, which is beyond the scope of this paper, but worth addressing. From the pragmatic perspective any solutions to problems is likely to yield new problems, whereby the earlier solution is no longer “progressive.” Progressive is a context-dependent term, relative to the problem at hand. For example, reciprocity rhetoric was used in implementing and framing social security, however, as Wray (2003) has argued, we are starting to run up against the problems of this rhetoric when people believe the fund for social security is running out, which we know from a Modern Monetary Theory perspective, is not true. This will now need to be addressed by reframing the policy or developing a new policy to maintain the instrumentality social security provided.

Additional information

Notes on contributors

Jacob Powell

Jacob Powell is an assistant professor of economics at Bucknell University.