Customary rule-following behaviour in the work of John Stuart Mill and Alfred Marshall 1

Abstract

The informal institutional structure embraces the social norms and moral values of a particular society and together with the formal institutional frame, they compose the social environment. Social norms and values, congealed into customary rules of behaviour, provide a stable and enduring context to economic life that acts positively or negatively on economic activity. Despite their methodological and theoretical differences, Mill and Marshall have both suggested that individual economic decisions are fully embedded in their social environment. Thus, in order to explain the economic phenomena, from simple transaction processes to long term development, they adopted a broader perspective by including the social frame inside which economic choices are made, divulging the role of custom, yet in a quite distinctive way. Copyright © Millennium Economics Ltd 2014