John R. Commons’s Two-Layered Theory of Reasonable Value

Broadly speaking, John R. Commons’s theory of reasonable values has been interpreted as either a theory of reasonable prices or reasonable process of policy formation. Comparing newly discovered manuscripts written in 1928–1929 with Institutional Economics, this study shows that Commons’s theory of reasonable value has a two-layered structure consisting of the theory of reasonable price and the theory of reasonable process of policy formation. The essential meaning of reasonableness in the first layer is investigating all facts and giving due weight to each, whereas in the second layer is the voluntary transformation of understandings, leading to the conciliation of conflicting interests through deliberation. In this regard, his theory of reasonable value is related to debates on reasonableness and deliberative democracy in contemporary political philosophy. Then, using the analytical concepts of contemporary political philosophy, this study explains the necessity of a two-layered structure for his theory of reasonable value by clarifying where the two layers overlap and differ.