Habits of Thought and the Process of Economic Development: Remarks on Receiving the Veblen-Commons Award

Among the many insightful contributions of Thorstein Veblen and John R. Commons is that habits of thought matter. Habits of thought condition policy and place limits on what is possible. This article tackles five habits of thought that inhibit the process of economic development. These include: (i) the confusion of economic development with economic growth; (ii) the crowding-out hypothesis; (iii) the concept of the steady state economy; (iv) the peak oil hypothesis; and (v) the inevitability of economic progress. None of the discussions in this article are intended to minimize the importance of other very real constraints to the development process. A few of these other constraints are war, racism, sexism, political instability, corruption, and climate change.