Capitalism as an Economic System Research: Power, Technological Change, and Innovation

Political economy, which developed as a study of wealth and ethics on the basis of the natural law philosophy and the British utilitarian philosophy which is a branch of natural law philosophy, has turned into economics with the marginalist revolution. The marginalist revolution has aimed at scientific “certainity” as in natural sciences, by excluding the concepts of class, institutions and history. This transformation gave the discipline a mature scientific theory appearance instead of a loose social theory form. This transformation is also consistent with the liberal character of the discipline. With that transformation, economics, on one hand, gained the most powerful scientific form among social sciences and on the other hand, it narrowed its borders. Institutional economics, one of the schools of heterodox economics, is seriously opposed to the transformation of the discipline. Both by choosing capitalism as an analysis object and by staying apart from or critical towards this capitalism institutional economics judges the liberal nature of formal economics. Institutional economics considers the economy as an institutionalized process. It accepts the market as given not natural. Economics also covers a wider area than the market. In this case, according to institutional economics, the definition of economics as science will expand and change. Economics will move away from the narrow patterns of scientific economics and reappear as political economy. In this study, it is claimed that conceiving institutional economics as political economy constitutes an opportunity to evaluate contemporary capitalism and to understand the basic tendencies of the this capitalism.