The Design of Free-Market Economies in a Post-Neoclassical World

The ‘Washington Consensus’ supporting competitive frames and market solutions in economics and law was shown inadequate to address social problems in non-U.S. settings. So would diversity and dynamics suggest theories in need of adjustment to other realities such as culture, increasing returns and market power. Reform must account for an economics of falling cost, ecological limits and complementarity in our relations. Such shall open new applications for economics and law. In this paper a theory of planning horizons is introduced and then employed to raise some meaningful questions about the neoclassical view with respect to its substitution, decreasing returns and independence assumptions. Suppositions of complementarity, increasing returns and interdependence suggest that competition is inefficient by upholding a myopic culture resistant to change. Growth – though long believed to rise from markets and competitive values – may not derive from these sources. Instead, as civilizations advance, shifting from material wants to higher-order intangible output, they evolve from market tradeoffs (substitution and scarcity) into realms of common need (complementarity and abundance). If so, then neoclassical arguments shall no longer apply to any advanced information economy also restrained by its ecology. Indeed, this paper opens standard theory into a more general framework constructing ‘horizon effects’ into a case for cooperation – as more efficient than competition for all long-term problems of growth. The case is made that competition is keeping us stupid and immature, rewarding a myopic culture at the expense of learning and trust, therefore retarding economic growth instead of encouraging it as believed. The policy implications of horizonal theory are explored, with respect to regulatory aims and economic concerns. Such an approach emphasizes strict constraints against entry barriers, ecological harm, market power abuse and ethical lapses. Social cohesion – not competition – is sought as a means to extend horizons and thereby increase efficiency, equity and ecological health. The overriding importance of horizon effects for regulatory assessment dominates other orthodox standards in economics and law. In sum, much of the reason for the failure of the Washington Consensus stems from myopic concerns central to any horizonal view. Reframing economics along horizonal lines suggests some meaningful insight to how regulations should be designed to keep pace with this approach in economics and law

Organizing the innovation process : complementarities in innovation networking

This paper contributes to the developing literature on complementarities in organizational design. We test for the existence of complementarities in the use of external networking between stages of the innovation process in a sample of UK and German manufacturing plants. Our evidence suggests some differences between the UK and Germany in terms of the optimal combination of innovation activities in which to implement external networking. Broadly, there is more evidence of complementarities in the case of Germany, with the exception of the product engineering stage. By contrast, the UK exhibits generally strong evidence of substitutability in external networking in different stages, except between the identification of new products and product design and development stages. These findings suggest that previous studies indicating strong complementarity between internal and external knowledge sources have provided only part of the picture of the strategic dilemmas facing firms

Organizing the innovation process : complementarities in innovation networking

This paper contributes to the developing literature on complementarities in organizational design. We test for the existence of complementarities in the use of external networking between stages of the innovation process in a sample of UK and German manufacturing plants. Our evidence suggests some differences between the UK and Germany in terms of the optimal combination of innovation activities in which to implement external networking. Broadly, there is more evidence of complementarities in the case of Germany, with the exception of the product engineering stage. By contrast, the UK exhibits generally strong evidence of substitutability in external networking in different stages, except between the identification of new products and product design and development stages. These findings suggest that previous studies indicating strong complementarity between internal and external knowledge sources have provided only part of the picture of the strategic dilemmas facing firms

House price momentum and strategic complementarity

House prices exhibit substantially more momentum, positive autocorrelation in price changes, than existing theories can explain. I introduce an amplification mechanism to reconcile this discrepancy. Sellers do not set a unilaterally high or low list price because they face a concave demand curve: increasing the price of an above-average-priced house rapidly reduces its sale probability, but cutting the price of a below-average-priced house only slightly improves its sale probability. The resulting strategic complementarity amplifies frictions because sellers gradually adjust their price to stay near average. I provide empirical evidence for concave demand using a quantitative search model that amplifies momentum two- to threefold

Bringing tasks back in: an organizational theory of resource complementarity and partner selection

To progress beyond the idea that the value of inter-firm collaboration is largely determined by the complementarity of the resources held by partners, we build a theoretical framework that explains under which conditions a set of resources or capabilities can be considered as complementary and resulting in superior value creation. Specifically, we argue that the tasks that an inter-firm collaboration has to perform determine complementarities, and that complementarities arise from similar and dissimilar resources alike. We capture this relationship in the concept of task resource complementarity. Further, we examine factors that impact on the relevance of this construct as a predictor of partner selection. Finally, we discuss which implications arise for a theory of the firm when tasks are explicitly incorporated into the conceptualization of resource complementarity

Complementarities and systems: Understanding japanese economic organization

The performance of the Japanese economy in the last forty five years, during which it has gone from post war destitution and near collapse to one of the richest and most productive in the world is unmatched in human history. The purposes of this essay are to interpret both the characteristic features of Japanese economic organization in terms of the concept of complementarity, and some recent developments in Japanese economy, and to speculate on its future.

From the ecology of the human spirit to the development of the orchestral theory of communication: the inclusion of the medium-message axiom

The contributions of the biologist, anthropologist and communication theorist Gregory Bateson (1904- 1980) form the nucleus of the cross-disciplinary theoretical principles which led to the founding of the web of thought spun by Watzlawick, Weakland, Beavin, Fish, Jackson, Erickson, Foster, Haley and Satir, amongst others. These authors were united by a common theoretical standpoint which foregrounded the ecology of the human spirit and saw communication as process, a system of transactional interaction. They were also similarly influenced by cybernetics, systems theory and constructivism. Energised by the clash of the ideas in their exchanges, they constructed the orchestral theory of communication, formalised by Paul Watzlawick, Donald Jackson and Janet Beavin. Today, Watzlawick (1967) is regarded as a seminal publication in the annals of interpersonal communication studies. Moving beyond the confines of the original object of study – face-to-face communication – this theory has been increasingly applied to the analysis of institutionally mediated communication and to the understanding of the construction of learning and change in organisations. However, in current circumstances, its set of axiomatic principles would benefit from the inclusion of a medium-message axiom to allow a fuller understanding of the realities of the mediated communication process that the process contains. This paper proposes the inclusion of this new axiom, medium-message; a proposal which is based on the work of Gregory Bateson, the ecology of the human spirit, the orchestral theory of communication and the thinking of the Media Ecology Association. It aims to help build a more profound insight into the realities of the process of human communication