Exchange versus influence: a case of idealization

Abstract

The intertheoretical relation between economic equilibrium theory and a theory of social institutions is studied in reduced form, i.e. by comparing the central primitives rather than the full formal models. It is shown that equilibrium can be regarded as a limit of institutions with ever more symmetrical power relations. Economic equilibrium theory thus is shown to be an idealization of the theory of social institutions. A provisionary topology which gives substance to the notion of a limit is defined "internally", i.e. by reference to items occurring in the models only. The meta-scientific status of idealization is briefly discussed.