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This article identifies the concept of market value as a standardizing concept that coordinates the actions of market participants in relatively inefficient real estate markets. The paper also identifies different levels of discourse that reflect the organizational/institutional complexity of the real estate appraisal profession. The standardizing effect of market value includes a cognitive and fiduciary component. Using this framework, the paper traces the influence of Richard T. Ely’s institutional economics – and its legacy in the form of the research program of Urban Land Economics at the University of Wisconsin – on the formation and development of the standards of appraisal and ethical practice. This complexity is traced historically from the early part of the 19th century to the formation of the professional organizations and the establishment of their standards, and also through a series of reform efforts in the 1960s and 1980s that were articulated in the academic community. The paper illustrates the manner in which Institutional Economics has been influential in the continuing development of the real estate appraisal profession and suggests reasons for its continuing relevance.

The rise of the regulatory state during the Gilded Age was closely associated with the development of institutionalist ideas in American academia. In their analysis of the emergent regulatory environment, institutionalists like John Commons operated with a fundamentally marginalist theory of value and distribution. This engagement is a central explanation for the ultimate ascendancy of neoclassical economics, and the limitations of the regulatory environment that emerged in the Progressive Era. The eventual rise of the Chicago School and its deregulatory ambitions did constitute a rupture, but one achieved without rejecting preceding conceptions of competition and value. The substantial compatibility of the view of markets underlying both the regulatory and deregulatory periods is stressed, casting doubt about the transformative potential of the resurgent regulatory impulse in the New Gilded Age.

This chapter explores the origins of the theme of competitive advantage in 19th and early 20th century economics. This theme, which forms the core of modern Strategic Management, was a battleground for debates about the value of abstract theory versus observations about real-life events. Intellectual genealogies, citations, and other sources show the central roles played by the University of Vienna and Harvard University. These two institutions strongly influenced the theory of monopolistic competition as well as all three modern views of competitive advantage – the industrial as expressed by Porter, the resource-based as expressed by Penrose, and the evolutionary as expressed by Schumpeter.

William Amasa Scott was in his time well-known as a monetary economist as well as a popularizer of economic ideas, whose opinions were widely regarded by the public. A proponent of Austrian economics and defender of classical economic theory, he soon found a home at the School of Economics, Political Science and History (later the School of Economics) at the University of Wisconsin which, while initially a mainstream department, would evolve into the citadel of Institutional Economics. Notwithstanding his status as an authority on monetary economics and his place as a public intellectual, he remained at the University something of an outsider throughout his career and today is largely forgotten.

As I suggested earlier, Stabile's “lessons” typically take the form of questions. For example, what is the conceptual basis for defining a minimum income sufficient to sustain a labor force (what Stabile dubs the argument from sustainability)? Is there an absolute standard based strictly on basic biological needs, as Rose Friedman argued (p. 53)? Or do the necessities of life also include “whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without,” as Adam Smith declared (quoted in Stabile, p. 17)? Introducing Amartya Sen's notion of capability broadens our scope even further, for now we are concerned about developing the traits, abilities, and opportunities that can make workers more productive, effective, and valuable citizens (a concern that Stabile finds implicitly in numerous authors, including Aristotle, Smith, Marshall, and Richard Ely).

By now, it is one of the standard tropes of those who write about the professionalization of American economics that there was a methodenstreit between the marginalists and the historicists at the turn of the nineteenth century into the twentieth. As recently as last year, Nancy Cohen (2002) argued that the only problem with this picture is that we have not understood correctly that the marginalists had actually won much sooner than we realized, sometime before 1900. Dorothy Ross’s classic The Origins of Amercian Social Science (1991) plays off the same dichotomy, but offers the older chronology, that “[b]etween about 1890 and 1910 marginal economics became the dominant paradigm in American economics.”