November 4, 2015

Economic Coordination within Emergent Institutional Ecologies: Transcending a Theoretical Antinomy

  • Richard Wagner

    Distinguished Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics and Economics
  • Marta Podemska-Mikluch

    Marcia Page and John Huepenbecker Endowed Professor in Entrepreneurship
read more

Find the paper at SSRN

Economic theory contains a significant theoretical antinomy. Markets secure coordination in self-organized fashion. In contrast, polities secure coordination through planning and administration. This is accomplished analytically by collapsing all political entities within a society into a single entity denoted as "government." Doing this is to commit what Mitchel Resnick (1994) called the "centralized mindset," which is to attribute an observed order to some ordering agent. This paper seeks to dissolve this antinomy by explaining how the same coordinative principles are at work throughout a society. All societies operate in generally coordinated fashion, even though there is wide divergence in the qualities of such coordination due to different institutional arrangements at work in the same society. This paper sets forth an approach to explaining coordination throughout a societal ecology where that coordination is achieved through different forms of transaction, some mutually beneficial and some parasitical.