Alienation and the Soviet Economy by Paul Craig Roberts

Author:Paul Craig Roberts
Language: eng
Format: epub
Publisher: Independent Institute
Published: 2017-03-15T16:00:00+00:00

An Organizational Model of the Market

When organization is achieved among people by their mutual interaction and initiative, the result is a system of mutual interdependence that cannot be subdivided into consecutive stages. Such a system is termed “polycentric” because all members in the interlocking and overlapping network of organization are free to undertake autonomous action that will bear on the actions of other members. Each member’s autonomously chosen task comprises a part of the overall outcome and contributes toward its achievement. The result produced by the system is meaningful even though it is ex ante indeterminate. That is, although the outcome can be predicted, it is not predetermined but historically observable. The organization of science, democratic politics, and economic activity in a market system are characterized by polycentrism.

Diagrammatically, the organizational structure of a market system can be illustrated as in Figure 2. Each individual firm (a, b, c, d, e, f) has a hierarchic organizational structure, and each firm is interrelated to each of the others through the polycentric structure of the polygon. In Figure 2 each member, m, has m — 1 interrelations. There are two interrelations between two members, i.e., a adjusts to b and b adjusts to a. The total number of interrelations R = m (m — 1).4

Imagine the expansion of Figure 2 by the addition of polygons (Figure 3).5 In Figure 3, a, for example, has direct interrelations with members of three joining polygons, is indirectly interrelated to x through n and m, and is interrelated to y through, for example, an indirect interrelation with x. Thus, a’s autonomous actions will not equally affect all members of the polycentric organization. In the example, a’s autonomous actions will bear more on b, c, d, e, f, g, h, i, j, k, m, n, and less on y.

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