Institutional Economics is an approach to economic theory that is reflective of, and fundamentally informed by, scientific theory. Historically, the scientific theory so employed was Evolutionary Theory, which maintains that scientific fields progress toward complete knowledge of the world through continued and increasing usage of the scientific method. In this model, a body of facts grows and– in a painfully oversimplified way– evolves into a bigger and better body of facts. This process is taken to be both the structure of and motivation for scientific progress.

However, for the sake of examination, this paper rejects the use of Evolutionary Science in the understanding of Institutional Economics, substituting it with the theoretical framework of Revolutionary Science.

The latter theory– also known as Paradigm Theory, widely and ubiquitously attributed to Thomas Kuhn’s The Structure of the Scientific Revolutions— holds that scientific fields do not evolve per se, steadily progressing from one achievement to the next, but that they undergo occasional and dynamic revolutions, more commonly referred to, correctly or otherwise, as paradigm shifts. The various paradigm phases that a scientific field experiences then are typified by extended periods of normal science, which is conducted through scientific methods, as established and selected in light of the central tenets of the operative paradigm.

Replacing the evolutionary structure of science traditionally used in Institutional Economics with the revolutionary structure laid out in Paradigm Theory has several striking corollaries: teleological reasoning may be completely eliminated, as revolutionary science does not presuppose a specific end to any process; explanation becomes just as important as prediction, as no single model of the scientific method is accepted to the exclusion of all others; and economic theory can take on a distinguishably dynamic nature, as opposed to a generally static one. The consequences of any one of these points may be interpreted as positive or negative to economists or philosophers so involved, but for now, and at the cost of any once-precious nuance, suffice it to say that this paper can prove that Revolutionary Science is better as a theoretical framework for understanding Institutional Economics than Revolutionary Science is.