"These individual actions are really trans-actions instead of either individual behavior or the "exchange" of commodities. It is this shift from commodities and individuals to transactions and working rules of collective action that marks the transition from the classical and hedonic schools to the institutional schools of economic thinking. The shift is a change in the ultimate unit of economic investigation. The classic and hedonic economists, with their communistic and anarchistic offshoots, founded their theories on the relation of man to nature, but institutionalism is a relation of man to man. The smallest unit of the classic economists was a commodity produced by labor. The smallest unit of the hedonic economists was the same or similar commodity enjoyed by ultimate consumers. One was the objective side, the other the subjective side, of the same relation between the individual and the forces of nature. The outcome, in either case, was the materialistic metaphor of an automatic equilibrium, analogous to the waves of the ocean, but personified as "seeking their level." But the smallest unit of the institutional economists is a unit of activity -- a transaction, with its participants. Transactions intervene between the labor of the classic economists and the pleasures of the hedonic economists,simply because it is society that controls access to the forces of nature, and transactions are, not the "exchange of commodities," but the alienation and acquisition, between individuals, of the rights of property and liberty created by society, which must therefore be negotiated between the parties concerned before labor can produce, or consumers can consume, or commodities be physically exchanged."
John Rogers Commons was an American institutional economist, Georgist, progressive and labor historian at the University of Wisconsin–Madison.
"The Chinese and Japanese are perhaps the most industrious of all races, while the Chinese are the most docile. The Japanese excel in imitativeness, but are not as reliable as the Chinese. Neither race, so far as their immigrant representatives are concerned, possesses the originality and ingenuity which characterize the competent American and British mechanic."
"I do not overlook the important contributions to economic theory in the past whether orthodox or heterodox I correlate them with institutional economics. The classical and communistic economists used as their measure of value the man hour of labor. This is evidently since the incoming of scientific management the engineering economics of efficiency. The Austrian and hedonistic economists deriving from Bentham used as the measure of value the diminishing marginal utility of consumption goods. This is evidently the home economics recently introduced in the college curriculum."
"Liberty is absence of restraint. Freedom is participation in government."
"Liberty is as much a matter of compulsion as duty, but where duty says to a person that he must or must not, liberty says to other persons that they must not interfere with that person, or that they even must help to prevent still other persons from interfering, if necessary."
"Economic theory deals with two concepts, Value and Economy. Abstract reasoning regarding these concepts rests ultimately on mathematical concepts of quantity, time and energy. The three are inseparable, for quantity and time are dimensions of energy. The quantity relationships of energy, usually termed "statics," turn on the problem of the relation of the parts to the whole, while the time relationships, usually termed "dynamics," are the relations of a process that connects past, present and future."
"In the entire circuit of the globe those races which have developed under a tropical sun are found to be indolent and fickle. From the standpoint of survival of the fittest, such vices are virtues, for severe and continuous exertion under tropical conditions bring prostration and predisposition to disease. Therefore, if such races are to adopt that industrious life which is a second nature to races of the temperate zones, it is only through some form of compulsion. The negro could not possibly have found a place in American industry had he come as a free man."