John R. Commons, Wesley N. Hohfeld, and the Origins of Transactional Economics

This article assesses John R. Commons's adoption of Wesley N. Hohfeld's framework of jural opposites and correlatives in order to construct his transactional approach to the study of institutions. Hohfeld's influence on Commons, it is argued, was both positive and negative. On the one hand, Commons followed Hohfeld and recognized that such concepts as property and inheritance actually represent an aggregation of numerous types of legal relations. Hohfeld's schema provided a powerful rhetorical and analytical tool whereby these highly abstract conceptions could be reduced to a limited number of primary elements. Moreover, Hohfeld's schema appeared to be consistent with Commons's general methodological and psychological commitments. On the other hand, Commons's forging of the “transaction” as the elementary unit of economic analysis can be seen as an attempt to go beyond Hohfeld. Commons was in fact unsatisfied with Hohfeld's bilateral treatment of jural relations and with his neglect of the role played by state officials in enforcing transactions and, in so doing, in promoting specific individual interests as collective public policies.