Institution - Aspects of Institutions

Aspects of Institutions

Although individual, formal organizations, commonly identified as "institutions," may be deliberately and intentionally created by people, the development and functioning of institutions in society in general may be regarded as an instance of emergence; that is, institutions arise, develop and function in a pattern of social self-organization, which goes beyond the conscious intentions of the individual humans involved.

As mechanisms of social interaction, institutions are manifest in both formal organizations, such as the U.S. Congress, or the Roman Catholic Church, and, also, in informal social order and organization, reflecting human psychology, culture, habits and customs, and encompassing subjective experience of meaningful enactments. Most important institutions, considered abstractly, have both objective and subjective aspects: examples include money and marriage. The institution of money encompasses many formal organizations, including banks and government treasury departments and stock exchanges, which may be termed, "institutions," as well as subjective experiences, which guide people in their pursuit of personal well-being. Powerful institutions are able to imbue a paper currency with certain value, and to induce millions into cooperative production and trade in pursuit of economic ends abstractly denominated in that currency's units. The subjective experience of money is so pervasive and persuasive that economists talk of the "money illusion" and try to disabuse their students of it, in preparation for learning economic analysis.