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Studies in Emergent Order, Spring 2009, Vol. 2
Limits on the Communication of Knowledge in Human Organisations , . . Jacky Mallett Hayek observed that the inability of centralized organizations to incorporate significant amounts of local knowledge was a critical disadvantage for social organizations. This paper supports Hayek’s arguments by examining mathematical constraints on communication, and the corresponding limits they place on the total information transmission within communicating organizations. Using recent work from the field of sensor networks, we show that these limits depend on both the topological arrangement of communication links within the network, and also the latency or time taken for messages to be communicated and processed by those participating in the network. The combination of latency and topology can cause dramatic differences in both the amount of communication an organisation can perform, as well as the speed with which it can make decisions based on that information. Since communication latency has been dramatically reduced within human society over the last 150 years, this introduces a historically changing dynamic on human organizations whose influence may have been underappreciated. Academic research and the market economy are emergent orders relying on spontaneous coordination as opposed to central direction. The comparative analysis here suggests these orders differ in their likelihood of overcoming network effects and lock-in. Unlike technologies in the market, academic research lacks an entrepreneur able to profit from surmounting lock-in to an inferior research method. The organization of the academy in discipline based departments also insulates a field from feedback. The propensity for network effects to arise may not differ between academic and economic orders, but academic research will less readily escape lock-in to an unproductive paradigm. This paper then briefly explore implications of this analysis for other emergent orders. Spontaneous Order, Symbolic Interaction and the Somewhat-Less-Hidden Hand . . . Roger A. Lohmann “Hidden hand” explanations should be seen, in part, as jumping off points rather than termina. Workings and processes of economic exchange that Smith noted in the 18th century as hidden and mysterious are not the case today, along a wide variety of fronts in economic, social and political theory. This paper suggests some lines of theoretical and empirical investigation since the 18th century – in particular the work of a group of social psychologists and sociologists known collectively as symbolic interactionists –as revealing at least some of the dynamics of Smith’s hidden hand, and their work and revelations is important to fuller understanding of the concept of spontaneous order. A Mengerian theory of the origins of the business firm . . . Aidan Walsh Hayek made a distinction between spontaneous orders and man-made organizations. The purpose of this paper is to argue that this distinction may not apply clearly to the business firm. Many features of the business firm, such as hierarchy and dynamic adaptive behaviour, may be explained by spontaneously evolving rule-following behaviour and not command or the ‘rules of purpose’; the business firm it is submitted may be a ‘hybrid order’. Understanding coordination within the business firm as possibly being driven by rule-following behaviour may allow us to conjecture an invisible hand or Mengerian theory for the origins of the business firm. We employ the sensory order, a spontaneously-evolved adaptive classificatory apparatus, as an instrument for interpreting experience and forming expectations. Considered primarily as entrepreneurs, individuals employ these internal classificatory schemata to form and revise plans and expectations on a day-to-day basis. This paper will analyze the conduct of entrepreneurial planning as a specialized application of the sensory order. Business firms are considered as designed orders through which entrepreneurial plans are implemented, and over a longer time-frame, as spontaneous orders which escape the control of any one planning intelligence. Entrepreneurs rely on internally-constructed, experimental models of causal relationships to form expectations of consumer want-satisfaction, resource availability, and production. The Adaptive Systems Theory of Social Orders . . .Thomas J. McQuade and William N. Butos Many social orders, including markets and science, can be understood as instances of adaptive systems, i.e., networks of active components whose interactions implement a persistent but mutable structure which is adaptable to its environment. This general model of social structure, being neither exclusively reductionist (in that it encompasses emergent phenomena and adaptive reactions at the system level) nor exclusively holistic (in that it pays due attention to the lower-level interactions which drive the system) can serve as a fertile source of novel ideas for investigating a range of social phenomena. |