Economic Organization, Capabilities and Coordination by Richardson G. B. Loasby Brian J. Foss Nicolai J

Author:Richardson, G. B.,Loasby, Brian J.,Foss, Nicolai J.
Language: eng
Format: epub
ISBN: 978-1-134-68985-9
Publisher: Taylor & Francis (CAM)

Planning and investments

There is a direct, though neglected, link from Richardson’s early work (1953, 1956, 1959, 1960) on co-ordination problems to his acclaimed work on inter-firm relations (1972). The link is provided by Richardson’s 1969 consultancy report for the British Electrical and Allied Manufacturers’ Association (BEAMA), The Future of the Heavy Electrical Plant Industry, and his 1971 article on ‘Planning versus competititon’.

The report was written in the context of the aftermath of a co-ordination failure for complementary investments associated with projections of economic growth in the Labour Government’s 1965 National Plan (Richardson 1969: 8), a co-ordination failure that Austrians may invoke in support of their views on public intervention. Specifically, there had been wide and unpredictable fluctuations taking place in the electricity authorities’ demand for heavy plant; in fact, a massive over-ordering of generating equipment, which was the price of consistency with the Plan. This lack of co-ordination of complementary investments was only part of the problem; for there was also a problem of co-ordination of competitive investments that arose because of the particular organisation of the power station equipment industry. The industry in fact confronted the destructive situation that relates to the co-ordination of competitive investments under competition so dramatically portrayed by Richardson in Information and Investment. As a result, it was virtually impossible for firms in the industry to operate on a profitable basis under competitive tendering.

Given that Richardson’s 1969 report was very much written in the context of indicative planning gone wrong, it is perhaps not surprising that he should turn his attention towards comparative systems issues. In addition to putting forward a number of fresh arguments on the particular issue under consideration, ‘Planning versus competition’ (1971) is also noteworthy for its anticipation of some of the central points in the much better known 1972 article on ‘The organisation of industry’. It is here that Richardson for the first time systematically inquires into alternative forms of economic organisation – markets, inter-firm arrangements, firms – in a private property market economy.

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