Cultural Evolution of the Firm

Weeks, J. and Galunic, Ch. . A Theory of the Cultural Evolution of the Firm: The Intra-Organizational Ecology of Memes . Organization Studies 24(8): 1309-1352 Copyright 2003 SAGE Publications London, Thousand Oaks, CA & New Delhi) . 0170-8406[200310]24:8;1309-1352;036074 . 2013

A theory of the cultural evolution of the firm is proposed. Evolutionary and cultural thinking is applied to the questions: What are firms and why do they exist? It is argued that firms are best thought of as cultures, as ‘social distributions of modes of thought and forms of externalization’. This culture encompasses cultural modes of thought (ideas, beliefs, assumption, values, interpretative schema, and know-how). Members of a group enact the memes they have acquired as part of the culture. Memes spread from mind to mind as they are enacted; the resulting cultural patterns are observed and interpreted by others. This refers to the meeting of content and process: as memes are enacted the ‘physical’ topology of the culture changes and as a consequence the context for the decisions of other changes. Variation in memes occurs through interpretation during communication and the re-interpretation in different contexts. The approach of taking the meme’s eye view allows a descriptive and non-normative theory of firms.


Firm theory: Why do we have firms? (and to what extent do they have us?). Firms have a cultural influence on people and that is why it is difficult to answer the question of why firms exist: we believe we need them because we were schooled in believing that. ‘They serve our purposes because they have a hand in defining those purposes and evaluating their achievement’ (p 1309). Assuming this is true then a functionalist approach, treating firms as if they are people’s tools, doesn’t help to understand why firms function as they do. It is not sufficient to start at a normative model and explain away the rest as noise as is the common practice with firm theorists; as a start they assume that firms should exist (for instance because of a supposed performance advantage over market forms of coordination) and that these theoretical advantages would pan out in practice. It is argued that a truly descriptive theory of the firm takes seriously the idea that firms are fundamentally cultural in nature and that culture evolves.

Existing theories of the firm

1) Transaction cost economics (Coase, Williamson): individuals will organize in a firm rather than contract in a market because firms are efficient contractual instruments; this organization economizes transaction costs. A contender is knowledge based firm theory (Conner and Prahalad, Kogut and Zander, Grant) positing that firms are better than markets at applying and integrating knowledge to business activity. These theories are complementary in the sense that they share the idea that business organizations exist because they offer some economic advantage to members. This theory makes a further attempt at enhancing purely economic theories of the firm. This theory reaches beyond the idea of a firm as a knowledge bearing entity to a culture bearing entity, where culture is a much wider concept of ideas than mere knowledge. In addition it is required to understand that some elements will enhance the organization’s performance and further the interests of its members and other will not. The theory must explain both. In addition the theory must explain how a firm functionally evolves if it is not towards an optimum in a best of possible worlds while aberrations are minimalized.

Defining Characteristics of the Firm

In transaction cost economics, the difference between a market and a firm is defined by authority (Coase). If B is hired by A to reduce the transaction cost of the market, then A controls the performance of B and hierarchy is introduced, whereas in a market A and B are autonomous: hierarchies and markets differ in how they exert control. The word ‘firm’ denotes the name under which the business of a commercial house is transacted, its symbol of identity (Oxford English Dictionary). It came to refer to a partnership for carrying on a business and then expanded to a broad definition of any sort of business organization. Hierarchy is common in business organizations, but it is not the defining attribute. The defining difference between market and firm is not only control but also identity; this is a key insight of the knowledge based view (Kogut and Zander 1992). People express this identity in their shared culture (Kogut and Zander 1996); the identity reflects participation in a shared culture. The knowledge based view claims that it is this shared culture that affords firms their lower transaction costs compared to the market. However, culture is left exogenous in the knowledge-based theory and in the transaction-based theory; culture is presupposed in both.


Bounded rationality: only if people are fully rational is the neo-classical assumption of rationality justified. In that case the organizational advantage over markets is limited and this assumption of transaction-based economics is invalid. If agents are unable to construct contracts with one another as autonomous agents is it valid. Similarly if no threat of opportunism exists and everybody is fully trustworthy (and known to be so) then organizations bring no additional advantage over the markets, market operations and firm operations imply the same transaction costs. Because this element is of a weak form (it suffices if some agents are unreliable), this is a realistic assumption. The third assumption is the functionalism: not only should transaction cost be economized, but given time and sufficient competitive forces (Williamson and Ouchi 1981: 363-364: 10 years). However, for the transaction cost theory to be descriptive, it needs an explanation of the identification and realization of the efficiency of the economies of the costs of transactions; how do economic agents know the origins, the effects of the cost and how do they know how to economize on them? This requires strong assumptions of neo-classical competition and human rationality. The knowledge-based firm theory is also functional and it is assumed that: 1) the interests of the individual and the enterprise are aligned and 2) individuals can and will always identify the relation between performance and business organization and market respectively when deciding whether to establish a firm or definitely be selected out in time. Firms are theorized to do better than markets is to share and transfer knowledge between members of the organization, individuals and groups, because of the shared identity. This shared identity is built through culture and this takes time; not only does it allow capturing of specific knowledge, also it limits the kind of future knowledge can be further captured and exploited.

An evolutionary model is more suitable: firms evolve as cultures and this need not be functional from the point of view of the organization as a whole. Cultural patterns do not necessarily arise among a social group because they benefit the members of the group equally: power may result in the benefiting of some members more than others, some elements of organizations even though carefully managed do not benefit every member equally and some elements seem not to benefit or disadvantage anyone. Culture seems to be an emergent phenomenon and even organizations that were created for specific purposes tend not to dissolve after having met them, but rather tend to adapt their goals for new purposes unforeseen by their founders.

Intra-organizational Perspective

Individuals learn more about organizations if they are more and longer involved with them, but they are likely to not learn all of it and seldom to accept all that is learned. This is called ‘population thinking’ (Ernst Mayer): every member of the organization has an interpretation resulting in a scatter of cultural elements that they carry and reproduce in a slightly different way. The scatter results in a center of gravity (or a contour) of the prototypical culture of the firm. The interpretation of the culture by each member is a variation to that prototype. None of them might be exactly the same but they have what Wittgenstein calls the ‘family resemblance’: ’They share enough of the beliefs and values and meanings and language to be recognized and to recognize themselves as part of the culture’ (p 1316) NB: this prototype resembles the organization of the autopoietic system that keeps it intact as a unity and that gives it its identity such as to allow it to be recognized by an observer. The entire scatter of cultural elements that builds the firms culture is the structure. Those elements that are dispensable are structure, those that are not are also part of the organization of the autopoietic system that is the firms culture. Complications: 1) how is the social distribution formed and how does it change over time? A theory is needed for the ecology of the cultural elements as well as how they change as they spread over the organization and how a flow of new cultural elements enter the firm and has an impact on existing culture 2) How do the careers of cultural elements develop over time. Memes refer to cultural modes of thought values, beliefs, assumptions, know-how &c. ‘Culture results from the expression of memes, their enactment in patterns of behavior and language and so forth’ (p 1317). Studying evolution of culture it is important to keep in mind that memes have a meanings in the context of other memes.

A firm theory based on knowledge-based firm theory must take into account not only knowledge but culture; it must be evolutionary so as to account for the firms’ changes over time, while a ‘use’ or a ‘purpose’ for some or all of the members of the population is not required for the change to take place.

Memes: The Unit of Cultural Selection

What this means is that the overall, intricate patterns of culture that we call firms are not the best understood as the result of the conscious and coherent designs of astonishing organizational leaders. Instead, for better or for worse, they emerge step-by-step out of the interactions of intendedly rational people making what sense they can of their various situations, pursuing their various aims, and often acting in ways that they have difficulty explaining, even to themselves’ (p 1318)

The key to evolution in the sense of an algorithm providing selection, variation and retention is that it postulates a population of replicators but it does not make assumptions about what those can be. Assuming that the environment stays the same, then every next generation will be slightly better adapted to that environment than the previous one. Competition is assumed for some scarce resource, be it food, air or human attention. Retention assumes the ability of a replicator to be copied accurately. ‘Firms and markets are cultural entities. They have evolved in the same way any part of culture evolves: though selection, variation and retention of memes. Memes are the replicators in cultural evolution. They are the modes of thought (ideas, assumptions, values, beliefs and know-how) that when they are enacted (as language and other forms of expression)create the macro-level patterns of culture. Memes are units of information stored in the brain that replicate from brain to brain as people observe and interpret their cultural expression. .. Memes are the genes of culture. Just as plants and animals and all biological organisms are the phenotypic expression of particular combinations of genes, so cultural patterns such as firms are the phenotypic expression of particular combinations of memes’ (p 1320)

Small Replicators

Genes are the replicators, not the organism. Organisms exist because they are a good way to replicate. Memes are the replicators, not people and not culture. But those memes that are part of firms replicate more than those who aren’t. ‘We have the firms that we do, in other words, not because they are necessarily good for society or good for their members (though often they are both), but fundamentally because they are good was for memes to replicate themselves’(p 1321). To study a firm in this sense is the equivalent of studying ecology: selection but not variation nor retention. Firms do not replicate themselves in toto; selection, however, is theorized as occurring to this object in its entirety. A unit of selection is required that is smaller than the firm as a whole.

Systemic Elements and Social Phenomena

First premise: memes are small and analytically divisible. Second premise: the environment where the selection of memes takes place principally includes other memes. The memes build on themselves and they do so according to the ‘bricoleur principle’ (Lévi-Strauss 1966: 17): building on making use of the materials at hand. Memes are recycled and recombined, informing and constraining the creation of new memes. Some are implicated more than others. NB: here the existence of culture is confused with the existence of memes. The latter are the tools for thought and culture is built of their enactment. And so memes are the experiments (anything that can be uttered) and culture is their expression in the physical world, even spoken, gestured & written (anything that is in fact uttered). ‘In firms, these fundamental memes are akin to what Schein ((1992) calls basic assumptions. They are deeply held assuumptions about the nature of reality and truth, about time aand space, and about the nature of human nature, human activity, and human relationships (Schein 1992: pp. 95-6). When these are widely shared in a culture, they tend to be taken for granted and therefore pass unnoticed. They structure the way firm members think of the mission and goals of the firm, its core competencies, and the way things are done in the firm. Often borrowed and reinterpreted from some part of the wider context in which the firm is located, they are central to the identity of the firm and the identity the firm affords its members. The concept of meme must be robust enough to include these taken-for-granted assumptions if it is to serve usefully as the unit of selection in a theory of the cultural evolution of the firm’ (p 1323). NB This does not explain clearly whence memes come. My premises is that the firm is a cultural pattern originating in the memes that stem from the commonly held beliefs in a society. Not that they merely structure goals and mission, but that they are the stuff of them. There is indeed a relation between the memes and the identity of the firm. There is no mention of the belief systems and more specifically belief in the idea of progress, ala capitalism &c.

Why Memes

Meme is the umbrella term for the category containing all cultural modes of thought. Memes are cultural modes of thought. The concept preserves the distinction between modes of thought and their forms of externalization: the memes in people’ s heads and the ways they talk and act and the artifacts they produce as a product of enacting those memes. ‘The firm is a product of memes in the way that the fruit fly is the product of genes’ (p 1324): a distinction is possible between particular elements of culture and the memes that correspond to them. ‘Memes, the unit of selection, are in the mind. Culture, on the other hand, is social. Culture reflects the enactment of memes. Culture is a social phenomenon that is produced and continuously reproduced through the words and actions of individuals as they selectively enact the memes in their mind. Culture may be embedded in objects or symbols, but it requires an interpreting mind to have meaning and to be enacted’ (p 1324)

With memes in Mind

Without human minds to enact it and interpret it, there is no culture: ‘Memes spread as they are replicated in the minds of people perceiving and interpreting the words and actions and artifacts (compare Hannerz 1992: 3-4; Sperber 1996: 25). They vary as they are enacted and reinterpreted’ (p 1324). A change in culture can be seen as a change in the social distribution of the memes among the members of the population carrying that culture. NB: the social distribution trick gets rid of the meme – culture difference. A change in memes produces different enactment in turn produces different culture resulting in different cultural products such as utterances and artifacts. From the existence of phenotypic traits, the existence of genes and their relation to that phenotype (that property) can with some considerable difficulty be inferred through a reverse engineering exercise. The analog statement is that from cultural features the existence of these particular memes that caused those features can be inferred. This statement is of a statistical nature: ‘He is implicitly saying: there is variation in eye color in the population; other things being equal, a fly with this gene is more likely to have red eyes than a fly without the gene. That is all we ever mean by a gene ‘for’ red eyes’ (p 1325, Dawkins 1982: 21). Concerning the substance of memes and the way it is enacted in culture: ‘Studies of psychological biases (Kahneman and Tversky 1973) can help us to understand ways in which the make-up of our brains themselves may shape the selection of memes’ (p 1326).

The Meme’s-Eye View

The essence is that not survival of the organism but survival of the genes best capable to reproduce themselves. These statements are usually congruent: whatever works for the organism works for the gene and the genes best suitable to reproduce are inside the fittest organism. The Maltusian element of Darwin’s theory is that evolution is about selection based on competition for a scarce resource; in the case of memes the scarce resource is human attention. Memes compete to be noticed, to be internalized and to be reproduced. Memes can gain competitive advantage by their recognized contribution to the firms performance; misunderstanding or mismanagement can lead to reproduction of the wrong memes by management. If firms would be subject to competition and the least successful would die out at each generation then the most successful would thrive in time: ‘We hold that a theory of the firm must be able to explain not why we should have firms, but why we do have the firms (good, bad, and ugly alike) that we have’ (p 1327). NB: This is too modest and I do not agree: before anything can be said about their characteristics, an explanation must be in place about the raison d’ for firms, why does something like a firm exist? But why this limitation of the scope of the explanation?

Mechanisms of Selection, Variation, and Retention

Selection. A meme is internalized when the cultural expression corresponding to it is observed and interpreted by a member of the firm. NB: Is not a form of memorization required such that the observation and enactment are independent in time and ready for enactment? A meme is selected when it is enacted. ‘At any point in time, the pattern of selection events acting on a given variation of memes across the firm defines the ecology of memes in the firm’ (p 1327) NB: Firstly it defines the culture in the firm as the expressions of actions, the enactments of the memes hosted by individuals; those enactments in turn harbor memes and those remain for other members to observe, to interpret and at to enact at some occasion. Selective pressures on memes are: function, fit and form. Function: members believe that some function is served when a particular meme is enacted. This is not straightforward because 1) functionality is wrongly defined because reality and the reaction to it is complex, especially given that people are boundedly rational. Events will conspire to ensure that ill-functioning memes are selected against: members notice that they do not lead to the aspired goal and stop reproducing them. If not they may be removed from their position or the part of the firm or the entire firm is closed. For myriad reasons (p 1328), members may not deviate from their belief in the functional underpinning for a particular meme and they keep reproducing it; therefore function is not a strong argument for the selection of memes. 2) Fit: the manner in which a meme fits into a population of other memes and the memes that fit with other dominant memes stand a better chance of survival: ‘Institutional theory emphasizes that organizations are open systems – strongly influenced by their environments – but that many of the most fateful forces are the result not of rational pressures for more effective performance but of social and cultural pressures to conform to conventional beliefs’ (Scott 1992: 118 in p 1329) NB: this is crucial: the beliefs deliver memes that deliver culture hen they are enacted. The feedback loop is belief > memes > culture > memes > culture and performance is a cultural by-product. How does the produced culture feed back into the memes? ‘Powell and DiMaggio (1991: 27-28) describe this environment as a system of ‘cultural elements, that is, taken-for-granted beliefs and widely promulgated rules that serve as templates for organizing’. In other words, as a system of memes’ (p 1329). NB: this is complex of just-so stories guiding everyday practice. ‘The memetic view shares a central assumption with institutional theory: choices and preferences cannot be properly understood outside the cultural and historical frameworks in which they are set (Powell and DiMaggio 1991: 10). Our perspective, our identity, is a cumulative construction of the memes we carry (see Cohen and Levinthal 1990; Le Doux 2002). We are a product of our memes’ (p 1329) NB: this is a long and generalized version of the memes originating in a belief in the idea of progress. ‘By focusing analysis on the social distributions of memes within the firm, rather than assuming the firm is a monolith that adapts uniformly to its competitive or institutional environment, the memetic view suggests that its isomorphism is always imperfect, and that there are always sources of variation that may evolve into important organizational traits’ (p 1330). NB: this is the equivalent of the monadic view: as perfect as possible given circumstances and time, but never quite perfect. Also the identity of the firm as a consequence of the autopoietic organization and the structure is develops and that adds additional traits to the identity but that can be selected away without losing its identity as a unity. 3) Memes can be selected for their form: the morphology of genetic expressions may influence reproductive success; the ease with which an idea can be imitated is correlated to its actual reproductive success (urban legend, disgustingness, sound bite, self-promotion in the sense of piggybacking on others so as to be reproduced more often and in the sense of creating more network externalities (Blackmore on altruism), catchyness, stickyness).


Novel combinations of memes and altogether new memes. NB if a memeplex is an autopietic system then it is closed to external information. It is a linguistic system. Signals are received and trigger the system to react to them. But no information is actually transferred; this implies that memes stay inside the memeplex and that other members carrying other memeplexes copy based on what they perceive is the effect of the meme in another member in their context. A distinction is made into mutation and migration of memes. The latter does not exist in in autopoietic systems. Hiring is limited because of the tendency to hire those who are culturally close to the firm as is; and the effect of firing severs the availability of their views. Different backgrounds of people in a firm are seen as a source of diversity of memes. NB: how does this idea match autopoiesis?

A difference is pointed out between potential variation and realized variation: the number of new memes that come available to the members of the firm versus the number of new memes that are actually realized. ‘If there is ‘information overload’ and ‘information anxiety’, then it is to a great extent because people cannot confidently enough manage the relationship between the entire cultural inventory and their reasonable personal share in it’ (Hannerz 1992: 32 in p 1332). In this way an increase in the potential memetic variety can lead to a decrease in the realized memetic variety. Whether a relation exists between the potential and the realized in evolving systems is unclear. ‘But an evolutionary perspective, and an understanding of the firm as an ecology of memes, should make us a little more humble about predicting unidirectional outcomes between such things as diversity and performance’ (p 1333). Mutation is a source of variation via misunderstandings. These are in practical terms the rule rather than the exception, especially if conveyed not via written or even spoken word. The final source of variation is recombination: move around the group and then actual recombination. NB: this is the preferred version in an autopoietic system.


Key elements are 1) longevity, 2) fidelity, and 3) fecundity. 1) Longevity is about the firm reproducing itself through the actions of individuals as they conduct recurring social practices and thereby incorporate and reproduce constituent rules and ideas, memes, of the firm. ‘In other words, firm activity is not a fixed object, but a constant pattern of routine activity that reproduces the memes that express these routines’ (p 1335). NB: routine activity in this phrase resembles the organization of an autopoietic system 2) Fidelity means how accurately memes are copied. This is an advantage over markets. ‘The defining elements of the firm (its characteristic patterns of control and identity) provide for meme retention. Control in firms means that employees accept to a relatively greater degree than in markets that they may be told how to behave and even how to think. They accept, in other words, reproducing certain memes and not others’ (p 1335). NB: this is a key notion: based on this definition of control in firms, this is the effect that firms have as the context (ambience) for their employees: they get to copy some desired memes and not others. I have a difficulty with the word ACCEPT in this context: how does it relate to the concept of free will and the presumed lack of it? ‘Those memes that become part of the firm’s identity become less susceptible to change (Whetten and Godfrey 1998). Being consistent with dominant memes in the firm becomes a selection factor for other memes, which further reinforces fidelity’ (p 1336). NB: Copy-the-product versus copy-the-instruction. 3) Fecundity refers to the extent to which a meme is diffused in the firm. This depends on the mind that the meme currently occupies: the more senior the member, the higher the chance that the meme gets replicated. ‘The cultural apparatus includes all those specializations within the division of labor which somehow aim at affecting minds, temporarily or in a enduring fashion; the people and institutions whose main purpose it is to meddle with our consciousness’ (Hannerz 1992: 83). This was meant to apply to societies (media &c.), but it can be used for firms just the same, especially because it is assumed to part of the standard outfit of firms that some groups of people meddle with the minds of other groups.

Why Do Firms Exist?

Why has the cultural evolution process led to a situation where the memes bundle together as firms?’ (p 1337). The scope of the answer is in the bundling of the memes (into patterns of control and identity) such that they have a competitive advantage over others; why do memes that are a part of firms replicate more often than memes that are not a part of a firm? NB: Weeks and Galunic are mistakenly assuming that memes in firms benefit their host by offering them an advantage (p 1338). ‘A cultural and evolutionary theory also forces us to recognize that the reasons firms came into existence are not necessarily the reasons this form persists now’(p 1338). Two questions arise: 1) what are the historical origins of the evolution of the firm and 2) why does the concept of the firm persist until today? Ad 1 origins) the idea is that large (US) firms exist around 50 years. The concept started as a family-run firms and grew from that form to a larger corporate form. As the scale of the business grew it was not longer possible to oversee it for one man and so management emerged, including the functional areas of production, procurement &c. ‘From a meme’s-eye view, we would say that these memes produced cultural effects with a tremendous functional selection advantage, but they did so only when bundled with each other. This bundling was made possible by the enacted identity and control memes of the firm. Thus, together, both sets of memes flourished’ (p 1339). ‘In evolutionary terms, this pattern is to be expected. Through bundling, replicators can combine in ways that produce more complex expressions that are better to compete for resources (such as human attention in the case of memes), but this bundling requires some apparatus to be possible. In our case, this apparatus consists of the memes that enact the firm’ (p 1340). NB: Because of their complexity they are better suited to compete because they better manage to retain bundles of memes for business functions such as production, procurement and distribution. Firms enhanced the faithful reproduction and enactment of those memes; they have reduced variation.


Once the bundle of memes we call the firm had emerged, the logic of its evolution changed somewhat and the possibility of group selection emerged’ (p 1340). NB: I don’t believe that the concept of the firm has changed since it was initially conceived: it must be mirrored. Also as an autopoietic system it has to have existed as a unity and an organization, a unity from the outset in whatever slim shape. It cannot ‘emerge’ from nothingness and evolve into something.’There is always a balance in any evolving system between the longevity offered by retention at the level of the individual meme and for adaptation at the level of of the bundle of memes. The firm emerged because of the reproductive advantages it gave memes, but it persisted because it was also able to provide more effective variation and selection processes’ (p 1340). NB: this is about the diffusion of administrative and managerial processes.


Firms offer memes advantages of retention as a result of: 1) control: peole can be told what to do and what to think 2) the identity that employees develop towards their firms, which brings them to hold certain memes close and protect them against different ideas. ‘Control and identity come together in firms by virtue of the legitimacy granted generally by society and specifically by employees to managers of firms to impose and manipulate corporate culture and thus the assumptions, beliefs, values, and roles internalized by employees and enacted by them not only in the organization (when management may be looking to ensure displays of compliance) but outside as well’ (p 1341). NB: I find this still not entirely satisfactory, because I am convinced that the memes carried by management may be somewhat more specialized than those of the people outside the firm, but the general ideas are widely known and carried by members of society. A firm could not exist in a society where some of the memes that compose a firm do not exist or are not believed to be true. ‘Without very much exaggeration we might say that firms are systems of contractual docility. They are structures that ensure, for the most part, that members find it in their self-interest to be tractable, manageable and, above all, teachable’ (p 1341). The economy for an incumbent meme to be added to the memeplex is described as follows: ‘When you can give ideas away and retain them at the same time, you can afford to be generous. In contrast, it is less easy to maintain allegiance to any number of contradictory ideas, and especially to act in line with all of them. Thus, if somebody accepts your ideas and therefore has to discard or reject competing ideas, in belief or in action, he may really be more generous than you are as a donor’ (Hannerz 1992: 104 in p 1341). NB: members protect memes because they are a product of them. Firms through their efforts of dedicated management to replicate meme high-fidelity and their firm-specific language, facilitate the retention of memes in the minds of their members.

Apart from control and authority, firms provide identity for members. At the core of institutional thinking two elements are held: 1) human actors are susceptible to merging their identity with that of the firms and 2) to be an institution presupposes some stable core memes as attractors of social union. Ad 1 identity) people are inclined to collective enterprise for a need to cooperate (Axelrod 1997) and from a natural tendency to seek and adopt moral order (Durkheim 1984; Weber 1978): ‘This is the sense in which the firms have us as much as we have them: they socialize us, fill our heads with their memes, which shape our sense of identity and which we carry, reproduce, and defend outside the organization as well as inside’ (p 1342). NB: this is where process and content meet: members reproduce the memes provided by the firm and the enacted memes produce the culture which is the environment for the members to base their beliefs on about ‘how things are done around here’. The culture is now also the basis for the development of memes; the content has become process. ‘.. the presence of managerially assigned monetary incentives and career progression that motivate the display of adherence to corporate memes; and, not least, the power of leaders to sanction and select out actors who do not abide by corporate values’ (p 1342).

Selection and Variation

Firms offer two sorts of selection and variation advantages to memes: 1) they offer a context that places memes that are potentially beneficial to the firm in closer proximity to one another than is typical in markets (complementary ideas, groups socially evolving norms) and 2) the presence of professional management who motivated and responsible for the creating and enforcement of memes considered beneficial. ‘.. firms have an advantage over markets as superior explorers of design space and thus are beter able to create variation through novel recombinations of memes’ (p 1344).


Humberto R. Maturana, Francisco J. Varela . The Realization of the Living (Originally: De maquinas y seres vivos 1972) . ISBN 90-277-1015-5 . 1980 . D. Reidel Publishing Company . Dordrecht: Holland / Boston: USA / London: England


A theoretical biology which is topological where the topology is self-referential from the point-of-view of the system itself and has no outside, ‘.. Leibnizian for our day’ (p v). Cognition is defined as a biological phenomenon and as the very nature of biological systems. Hence: ‘Living systems are cognitive systems, and living as a process is a process of cognition’ (p vi).

Essay 1: Biology of Cognition

1) What is the organization of the living? AND 2) What takes place In the phenomenon of perception? Ad 1) No valid definition is available that accounts for all systems: we can recognize them when we encounter them but we cannot say what they are. What is the invariant feature around which selection operates? NB that this is similar to my question concerning the invariant in business change! Look at systems not as open systems, exchanging energy and information with their environment, but closed. In addition a language is needed to describe autonomy as a feature of the system specified by the description. As a consequence notions of purpose, intent, use and function must be rejected. The definition of these systems as unities through their self-reference is their autonomy. Living systems are defined as unities through the circularity of the production of their components. Ad 2) With this theory the activity of the nervous system can be treated as the activity of the system itself and not of its environment. The external world only has a triggering role in the release of the internally determined activity. Moreover the working of the nervous system can only be understood by closing it off: perception is not the grasping of but the specification of an external reality. This can be connected with the Wagensberg model, but some modifcations are required to clean it from thermodynamical arguments. The question changes from: ‘How does the organism obtain information about its environment’ to ‘How does it happen that the organism has the structure that permits it to operate adequately in the medium in which it exists?’ (p xvi).

It was in these circumstances that one day, while talking to a friend (José Bulnes) about an essay of this on Don Quixote de la Mancha, in which he analyzed Don Quixote’s dilemma of whether to follow the path of arms (praxis, action) or the path of letters (poiesis, creation, production), and his eventual choice of the path of praxis deferring any attempts at poiesis, I understood for the first time the power of the word ‘poiesis’ and invented the word that we needed: autopoiesis. This was a word without a history, a word that could directly mean what takes place in the dynamics of the autonomy proper to living systems’ (p xvii)

In a sense it has been my way to a transcendental experience: to the discovery that matter, metaphorically speaking, is the creation of the spirit (the mode of existence of the observer in a domain of discourse) and that the spirit is the creation of the matter that it creates’(p xviii). I would refer to this as the meeting of content and process: beliefs lead to decisions which in turn lead to behavior which lead to a new context which, given beliefs, lead to new action and perhaps to a change of the belief also.

Unity, Organization and Structure

Unity. An observer performs the cognitive operation of distinguishing an entity from its background. They are distinguished for the separability of the respective properties endowed them through this cognitive operation. If this operation is performed recursively by the observer then the components of the entity can be distinguished and the entity is defined by the properties of its components. The observer can also observe the entity as a single unity and distinguish it in the domain of its properties as a unity and not in the domain of the properties of its components. If an autopoietic system is treated as a composite unity, it exists in the space defined by its components, but if it is treated as a simple unity then it is defined in the domain of the distinctive properties of the unity.

Organization and Structure. The relations between the components of a composite unity that define it as a particular kind of a unity constitute its organization. Only those properties are considered and only to the extent that they participate in the constitution of the unity they integrate. The actual components and their actual relations, concretely realizing a system as a member of a class of systems in which it categorizes because of its organization, constitutes its structure. Any given organization may be realized by many different structures and different subsets of components and their relations in a given structure may be abstracted by an observer as organizations defining different classes of composite unities. The organization specifies the class identity of a system and must remain invariant for the class identity to remain invariant; if its organization changes then its identity changes and the unity becomes a unity of a different kind. Conversely because an organization can be realized in systems with different structures, the identity of a system can stay invariant while its structure changes within limits determined by its organization.

Structural coupling. Unity and medium as independent systems operate in each interaction by triggering in each other a structural change, and select in each other a structural change. If the organization in a composite system remains invariant while it undergoes structural changes induced by its medium, then its adaptation is conserved. The structural change in the unity follows the structural change in the medium through a process of structured coupling. Else the outcome of the unity is disintegration. If the unity is structurally plastic, then its conservation of adaptation results in a history of structural couplings to the medium that selects its path of structural change. The configuration of constitutive relations that remain invariant in the adapted composite unity determines the possible perturbations that the unity can admit; it is a reference for the selection of the path of structural changes that take place in it in its history of interactions.

Epistemology. If a composite unity is specified as a simple system then the phenomenological domain is specified by the properties of the simple unity. Because that differs from the domain of the properties of the components phenomenal reduction is not possible. The relations between the components of a composite system interact through a system of contiguity. Necessarily relations such as control and regulation are not of contiguity, but referential relations specified by the observer using their meta-domain by using their view of the whole. The observer creates a meta-domain of descriptions that allows them to speak as if a unity existed as a separate entity that they can characterize by specifying the operations that must be performed to distinguish it. Having characterized it as a distinguishable entity, in that meta-domain can he only cognize the entity in terms of that meta-domain.

Society and Ethics

(1) ‘It is apparent that natural social systems as systems constituted by living systems require these for their actual realization. What is not apparent, however, is the extent to which the coupling of living systems in the integration of a social system entails the realization of their autopoiesis’ (p xxiv). Why is the use of the term ‘autopoiesis’ in the sentence above with regards to the organization of the social system avoided? ‘If, however, the autopoiesis of the components of a natural social system were not involved in its constitution because the relations that define a system as social do not entail them, then the autopoiesis of the components (and hence their autonomy and individuality) would be intrinsically dispensable’ (p xxiv). This means that if autopoiesis of the components of a social system is not involved in the constitution of a social system, then the autopoiesis of the components is not required. Hence the autonomy and individuality of the components would be ‘intrinsically dispensable’. This seems to be a hint at the status of people making up a social group. It does not take into account the existence of memes as components of a memeplex that forms the social fabric of a group.

(2) ‘Accordingly, I propose that a collection of autopoietic systems that, through the realization of their autopoiesis, interact with each other constituting and integrating a system that operates as the (or as a) medium in which they realize their autopoiesis, is indistinguishable from a natural social system. Or, in other words, I propose that the relations stated above characterize the organization of a social system as a system, and that all the phenomena proper to social systems arise from this organization’(p xxv) This must serve as the connection of the autopoiesis theory with the theory of memetics. The autopoietic systems are the belief systems of the components of the social system, namely individual people. Their autopoiesis is realized through the existence of the autopoiesis of the autopoietic social system. The component autopoietic systems and the social autopoietic systems both are realized through the other’s autopoiesis. Implications of this proposition are: (i) ‘The realization of the of the autopoiesis of the components of a social system is constitutive to the realization of the social system itself’ (p xxv) (ii) ‘A collection of living systems integrating a composite unity through relations that do not involve their autopoiesis is not a social system, and the phenomena proper to its operation as such a composite unity are not social phenomena’ (p xxv). (iii) ‘Therefore, the domain of social phenomena, defined as the domain of the interactions and the relations that an observer sees taking place between the compnents of a society, results from the autopoietic operation of the components of the components of the society while they realize it in the interplay of their properties’ (p xxv) (iv) ‘In a society, at any instance of observation, the structures of the components determine the properties of the components, the properties of the components realize the structure of the society, and the structure of the society operates as a selector of the structure of its components by being a medium in which they realize their ontogeny’ (p xxv) NB: this is the notion of the connection between process and content in a social system (v) ‘An autopoietic system participates in the constitution of a social system only to the extent that it participates in it, that is, only as it realizes the relations proper to a component of the social system’(p xxv)

(3) ‘A society defines the domain in which it is realized as a unity’(p xxv) Such a domain constitutes at least an operationally independent medium that operates as: a) a selector of the path of structural change that the society follows in its individual history, and b) ‘if stable, a historical stabilizer of the structures that realize the selected invariant relations that define the society as a particular social system’ (p xxvi).

(4) ‘To the extent that human being are autopoietic systems, all their activities as social organisms must satisfy their autopoiesis’ (p xxvii) ‘In man as a social being, therefore, all actions, however individual as expressions of preferences or rejections, constitutively affect the lives of other human beings and, hence, have ethical significance’ (p xxvi)

(5) ‘What determines the constitution of a social system are the recurrent interactions of the same autopoietic systems. In other words, any biological stabilization of the structures of the interacting organisms that results in the recurrence of their interactions, may generate a social system’ (p xxvi). Gene >> Meme. Also Kevin and Gavin.

(6) ‘A social system is essentially a conservative system. This is so because it is generated through the interactions of structure-determined autopoietic systems and operates as a medium that selects the path of ontogenic structural change of its components, which, thus, become structurally coupled to it. In our case, we as social beings generate, through our structure-determined properties, our societies as the cultural media that select our individual paths of ontogenic change in a manner that leads each one of us to the structure that makes us generate the particular societies to which we belong. A society, therefore, operates as a homeostatic system that stabilizes the relations that define it as a social system of a particular kind’ (p xxvi- xxvii).

(7) The domain of states of a system as a composite unity is determined by the properties that realize its organization. It follows that a social change in a human society can only take place if the individual properties and hence conduct of its members change.

(8) ‘All that matters for the realization of a society is that the component autopoietic systems should satisfy certain relations regardless of the actual structures (internal processes) through which they realize them’ (p xxvii) Hypocrisy.

(9) ‘Interactions within a society are necessarily confirmatory of the relations that define it as a particular social system; if not, the organisms that interact do not interact as components of the society which they otherwise integrate. It is only through interactions operationally not defined within the society that a component organism can undergo interactions that lead to the selection, in its ontogeny, of a path of structural change not confirmatory of the society that it integrates. creativity, as the generation of novel social relations, always entails interactions operationally outside the society.. Social creativity is necessarily anti-social in the social domain in which it takes place’ (p xxvii-xxviii)

(10) ‘In general any organism, and in particular any human being, can be simultaneously a member of many social systems, such as family, a club, an army, a political party, a religion or a nation, and can operate in one or another without necessarily being in internal contradiction. .. An observer always is potentially antisocial’ (p xxviii)

(11) ‘To grow as a member of society consists in becoming structurally coupled to it; to be structurally coupled to a society consists in having the structures that lead to the behavioral confirmation of the society’ (p xxviii)

(12) ‘We as human beings exist in a network of social systems and move from to another in ou daily activities. Yet, not all human beings caught in the mesh of relations generated in this network of social systems participate in it as social beings’ (p xxviii-xxix). This means that if the interaction of someone in this social system does not involve their autopoiesis, is being used by the system but not a member or it is social abuse.

(13) (14) (15)

Biology of Cognition

1. Introduction

Man knows and his capacity to know depends on his biological integrity; furthermore he knows that he knows’ (p 5). This statement also explains the requirement of the existence of human beings as biological organisms for the existence of memes. ‘As a psychological, and hence biological function cognition guides people’s handling of the universe and knowledge gives certainty to their acts; objective knowledge seems possible and through objective knowledge the universe appears systematic and predictable. Yet knowledge as an experience is something personal and private that cannot be transferred, and that which one believes to be transferable, objective knowledge, must always be created by the listener: the listener understands and objective knowledge appears to be transferred, only if he is prepared to understand’ (p 5) Thus cognition is a biological function; it is known through knowledge.

(a) If an organism is a unity, in what sense are its component properties its parts? Has some property arisen from the properties of its organization or from its mode of life?

(b) ‘Organisms are adapted to their environments, and it has appeared adequate to say of them that their organization represents the ‘environment’ in which they live, and that through evolution they have accumulated information about it, coded in their nervous system. Similarly it has been said that the sense organs gather information about the ‘environment’, and through learning this information is coded in the nervous system [Cf. Young, 1967]. Yet this general view begs the questions, ‘What does it mean to ‘gather information?’ and ‘What is coded in the genetic and nervous system?’ (p 6)

III Cognitive Function in General

The Observer

(1) ‘Anything said is said by an observer’ (p 8)

(2) The observer can observe an object and its environment simultaneously. This allows them to interact with both independently and have interactions that are outside of the domain of the observed entity.

(3) An attribute of the observer is that they can interact both with the observed entity and with its relations. Both are units of interaction (entities)

(4) To the observer an entity is an entity if they can describe it. They can describe it if at least one other entity exists so as to distinguish the observed entity from in its description; the ultimate reference is the observer themselves.

(5) The set of all interactions of an entity is its domain of interactions and the set of all possible interactions with the observer (relations) is its domain of relations; the latter lies within the cognitive domain of the observer. ‘An entity is an entity if it has a domain of interactions, and if this domain includes interactions with the observer who can specify for it a domain of relations’ (p 8)

(6) The observer can define himself as an entity by specifying his own domain of interactions.

(7) ‘The observer is a living system and an understanding of cognition as a biological phenomenon must account for (the existence of DPB) the observer and his role in it (the phenomenon DPB)’ (p 9)

The Living System

(1) ‘Living systems are units of interactions; they exist in an ambience. From a purely biological point of view they cannot be understood independently of that part of the ambience with which they interact: the niche; nor can the niche be defined independently of the living system that specifies it’ (p 9)

(2) ‘Living systems as they exist on earth today are characterized by .. a closed circular process that allows for evolutionary change in the way the circuitry is maintained, but not for the loss of the circuitry itself. .. This circular organization constitutes a homeostatic system whose function is t produce and maintain this very same circular organization by determining that the components that specify it be those whose synthesis or maintenance it secures’ (p 9)

(3) ‘It is the circularity of its organization that makes a living system a unit of interactions, and it is this circularity that it must maintain in order to remain a living system and to retain its identity through different interactions’ (p 9)

(4) ‘Due to the circular nature of its organization a living system has a self-referring domain of interactions (it is a self-referring system), and its condition of being a unit of interactions is maintained because its organization has functional significance only in relation to the maintenance of its circularity and defines its domain of interactions accordingly’ (p 10)

(5) ‘Living systems as units of interactions specified by their condition of being living systems cannot enter into interactions that are not specified by their organization. The circularity of their organization continuously brings them back to the same internal state (same with respect to the cyclic process). Each internal state requires that certain conditions (interactions with the environment) be satisfied in order to proceed to the next state’ (p 10). The circular organization implies the prediction that an interaction will take place again. If it does not then the system will disintegrate, if it does it will maintain its integrity (identity vis a vis the observer) and move on to the next prediction. In a continuously changing environment the system can only remain intact if the environment does not change in that which is predicted. The predictions implied in the organizations are not predictions of particular events but of classes of interactions; interactions the features of which allow the organization of the system and hence its identity to remain intact. This makes living system inferential systems and their domain of interactions a cognitive domain.

(6) A niche is defined by the classes of interactions into which a system can enter. The environment is defined as the classes of interactions into which an observer can enter; they treat it as a reference for their interactions with the system. The observer considers the niche of a system the set of interactions that they observe to lie in its part of the domain of interactions of the environment. For the observer a niche is a part of the environment, for the system it is the entire set of possible interactions. As such a niche cannot be ‘part’ of the environment which lies exclusively in the cognitive domain of the observer. ‘Niche and environment, then, intersect only to the extent that the observer (including instruments) and the system have comparable organizations, but even then there are always parts of the environment that lie beyond any possibility of the intersections with the domain of interactions of the organism, and there are parts of the domain of the niche that lie beyond any possibility of intersection with the domain of interactions of the observer. Thus for every living system its organization implies a prediction of a niche, and the niche thus predicted as a domain of classes of interactions constitutes its entire cognitive reality’ (pp. 10-11) This is relevant for the observation of the firms by people as observers and vice versa.

(7) ‘Every unit of interactions can participate in interactions relevant to other, more encompassing units of interactions. If in doing this a living system does not lose its identity, its niche may evolve to be contained by the larger unit of interactions and thus be subservient to it. If this larger unit of interactions is (or becomes) in turn also a self-referring system in which its components (themselves self-referring systems) are subservient to its maintenance as a unit of interactions, then it must itself be (or become) subservient to the maintenance of the circular organization of its components’ (p 11). This is possibly relevant concerning acquisition of firms by other firms (DPB): cells >> bees >> beehive; cells >> people >> firms >> larger firms &c.


(1) Evolutionary change is an aspect of the circular organization that preserves the system’s basic circularity. ‘Reproduction and evolution are not essential for the living organization, but they have been essential for the historical transformation of the cognitive domains of the living systems on earth’ (p 11)

(2) For a change in a unity without losing its identity with respect ot the observer, it must suffer an internal change. If an internal change occurs without the identity of the unity changing then the domain of interactions must change.

(3) After reproduction the new unity has the same domain of interactions as the parent if it has the same organization.

(4) Predictions about the niche are inferences about classes of interactions. Particular interactions may be of the same class and not distinguishable for the system but they may be to the observer.

(5) Aspects of the organization that are subservient to the maintenance of the basic circularity but do not determine it change from generation to generation. The system maintains its organization and its identity through interactions. The basic circularity remains unchanged, the way it is maintained changes. ‘The evolution of the living systems is the evolution of the niches of the units of interactions defined by their self-referring circular organization, hence, the evolution of the cognitive domains’ (p 12)

The Cognitive Process

(1) ‘A cognitive system is a system whose organization defines a domain of interactions in which it can act with relevance to the maintenance of itself, and the process of cognition is the actual (inductive) acting of behaving in this domain. Living systems are cognitive systems, and living as a process is a process of cognition’ (p13)

(2) ‘If a living system enters into a cognitive interaction, its internal state is changed in a manner relevant to its maintenance, and it enters into a new interaction without loss of its identity’ (p 13)

(3) The function of the nervous system is subservient to the necessary circularity of the living organization.

(4) The nervous system has expanded the domain of interactions and hence has transformed the unit of interactions and had subjected interacting to the process of evolution.

(5) This expansion of the cognitive domain (into the domain of ‘pure relations’) allows for non-physical interactions between systems such that the systems orient each other towards interactions within their respective domains. ‘Herein lies the basis for communication: the orienting behavior becomes a representation of the interactions toward which it orients, and a unit of interaction in its own terms. .. there are organisms that generate representations of their own interactions by specifying entities with which they interact as if these belonged to an independent domain, while as representations they only map their own interactions. .. a) We become observers through recursively generating representations of our interactions, and by interacting with several representations simultaneously we generate relations with the representations of which we can then interact.. b) We become self-conscious through self-observation; by making descriptions of ourselves (representations), and by interacting with our descriptions we can describe ourselves describing ourselves, in an endless recursive process’ (p 14)


(1) A living system is an inductive system: what happened once will occur again. Its organization is conservative and repeats only that which works. The present state is always specified by the previous state that restricts the field of possible modulations by independent concomitances.

(2) For the observer any one of the system’s behaviors appears as an actualization of the niche, that is, as a first order description of the environment (denoted as Description); this is a description in terms of the behavior (interactions) of the observed system, not representations of environmental states. The relation between behavior and niches exists in the cognitive domain of the observer only.

(3) A living system can modify the behavior of another system by: a) interacting with it in a way that directs both toward each other such that the following behavior of the one depends strictly on the previous behavior of the other. In this case the two systems can be said to interact. b) By orienting the behavior of the other system to some part of its domain of interactions different from the present interaction but comparable to the orientation of the orienting system. This takes place if the domains of interactions of both systems are coincident; no interlocking chain of behavior takes place because the systems’ behavior is based on parallel but independent behavior. In this case the systems can be said to communicate; this is the basis for linguistic behavior. The first generates a Description of its niche that orients the second within its cognitive domain to an interaction, which ensues a conduct parallel but unrelated to the first. The orienting behavior to the observer is a second order behavior, denoted in italics as description (linguistic utterance DPB), that denotes whatever denotation they assign to it: ‘.. that which an orienting behavior connotes is a function of the cognitive domain of the orientee, not the orienter’ (p 28).

(4) In an orienting interaction the orienter’s behavior as a description generates activity in the orientee, which then, in turn makes a Description of its niche connoted by the orienting behavior of the first.

(5) ‘If an organism can generate a communicative description and then interact with its own state of activity that represents this description, generating another such description that orients towards this representation…, the process can in principle be carried on in a potentially infinite recursive manner, and the organism becomes an observer: it generates discourse as a domain of interactions with representations of communicative descriptions (orienting behaviors). Furthermore, if such an observer through orienting behavior can orient himself towards himself, and then generate communicative descriptions that orient him towards his description of his self-orientation, he can, by doing so recursively, describe himself describing himself .. endlessly. This discourse through communicative description originates the apparent paradox of self-description: self-consciousness, a new domain of interactions’ (p 28-9).


(1) Thinking is the neuro-physiological process of interacting with some of its own internal states as if these were independent entities. From thinking behavior emerges in a deterministic manner. The difference with a reflex action is that the concerning the latter a signal can be traced back to the sensory system. In thinking the signal begins with a distinguishable state of activity of the nervous system itself (2) This process above is independent from language.

Natural Language

(1) ‘Linguistic behavior is orienting behavior; it orients the orientee within his cognitive domain to interactions that are independent of the nature of the orienting interactions themselves. .. Only if the domains of interactions of the two organisms are to some extent comparable, are such consensual orienting interactions possible and are the two organisms able to develop some conventional, but specific, system of communicative descriptions to orient each other to cooperative classes of interactions that are relevant for both’ (p 30). These are the interactions as per Knorr-Cetina.

(2) –

(3) ‘Behavior (function) depends on the anatomical organization (structure) of the living system, hence anatomy and conduct cannot legitimately be separated and the evolution of behavior is the evolution of anatomy and vice versa; anatomy provides the basis for behavior and hence for its variability; behavior provides the ground for the action of natural selection and hence for the historical anatomical transformations of the organism’ (p 31).

(4) ‘However, when it is recognized that language is connotative and not denotative, and that its function is to orient the orientee within his cognitive domain, without regard for the cognitive domain of the orienter, it becomes apparent that there is no transmission of information through language. It behooves the orientee, as a result of an independent internal operation upon his own state, to choose where to orient his cognitive domain; the choice is caused by the ‘message’, but the orientation thus produced is independent of what the ‘message’ represents for the orienter. In a strict sense then, there is no transfer of information from the speaker to his interlocutor; the listener creates information by reducing his uncertainty through his interactions in his cognitive domain. Consensus arises only through cooperative interactions in which the resulting behavior of each organism becomes subservient to the maintenance of both. .. The cooperative conduct that may develop between the interacting organisms from these communicative interactions is a secondary process independent of their operative effectiveness. If it appears to be acceptable to talk about transmission of information in ordinary parlance, this is so because the speaker tacitly assumes the listener to be identical with him and hence as having the same cognitive domain which he has (which never is the case), marveling when a ‘misunderstanding’ arises’ (p 32-3).

(5) –

(6) ‘If one considers linguistic interactions as orienting interactions it is apparent that it is not possible to separate, functionally, semantics and syntax, however separable they may seem in their description by the observer. This is true for two reasons: a) A sequence of communicative desriptions (words in our case) must be expected to cause in the orientee a sequence of successive orientations in his cognitive domain, each arising from the state left by the previous one… b) An entire series of communicative descriptions can itself be a communicative description; the whole sequence once completed may orient the listener from the perspective of the state to which the sequence itself has led him’ (p 33)

(7) ‘Linguistic behavior is an historical process of continuous orientation’ (p 34)

(8) –

(9) ‘Orienting behavior in an organism with a nervous system capable of interacting recursively with its own states expands its cognitive domain by enabling it to interact recursively with descriptions of its interactions. As a result: a) Natural language has emerged as a new domain of interactions in which the organism is modified by its descriptions of its interactions.. b) Natural language is necessarily generative because it results from the recursive application of the same operation (as a neurophysiological process) on the results of this application c) New sequences of orienting interactions (new sentences) within the consensual domain are necessarily understandable by the interlocutor (orient him), because each one of their components has definite orienting functions as a member of the consensual domain that it contributes to define’ (pp. 34- 5)

Memory and Learning

(1) ‘Learning as a process consist in the transformation through experience of the behavior of an organism in a manner that is directly or indirectly subservient to the maintenance of its basic circularity’ (p 35)

(2) ‘Learning occurs in such a manner that, for the observer, the learned behavior of the organism appears justified from the past, through the incorporation of a representation of the environment that acts, modifying its present behavior by recall; notwithstanding this, the system itself functions in the present, and for it learning occurs as an atemporal process of transformation. An organism cannot determine in advance when to change and when not to change during its flow of experience, nor can it determine in advance which is the optimal functional state that it must each; both the advantage of any particular behavior and the mode of behavior itself can only be determined a posteriori, as a result of the actual behaving of the organism subservient to the maintenance of its basic circularity’ (pp. 35-6)

(3 tm 7) –

(8) ‘Past, present and future and time in general belong to the cognitive domain of the observer’ (p 38)

The Observer

(1) The cognitive domain is the entire domain of interactions of the organism. It can be enlarged if new modes of interactions are generated or instruments are applied.

(2) –

(3) The observer generates a spoken description of his cognitive domain (which includes his interactions with and through instruments).

(4) ‘The observer can describe a system that gives rise to a system that can describe, hence, to an oberver. A spoken explanation is a paraphrase, a description of the synthesis of that which is to be explained; the observer explains the observer. A spoken explanation, however, lies in the domain of discourse. Only a full reproduction is a full explanation’ (p 39)

(5) ‘The domain of the discourse is a closed domain, and it is not possible to step outside of it through discourse. Because the domain of discourse is a closed domain it is possible to make the following ontological statement: the logic of the description is the logic of the describing (living) system (and his cognitive domain)’ (p 39) This bears a relation with the Wolfram statement that natural processes are the same as the processes that produced the human powers of perception and analysis.

(6) ‘This logic demands a substratum for the occurrence of the discourse. We cannot talk about this substratum in absolute terms, however, because we would have to describe it, and a description is a set of interactions into which the describer and the listener can enter, and their discourse about these interactions will be another set of descriptive interactions that will remain in the same domain. Thus, although this substratum is required for epistemological reasons, nothing can be said about it other than what is meant in the ontological statement above’(p 39)

(7) ‘We as observers live in a domain of discourse interacting with descriptions of our descriptions in a recursive manner, and thus continuously generate new elements of interaction. As living systems, however, we are closed systems modulated by interactions through which we define independent entities whose only reality lies in the interactions that specify them (their Description)’ (p 40)

(8) ‘For epistemological reasons we can say: there are properties which are manifold and remain constant through interactions. The invariance of properties through interactions provides a functional origin to entities or units of interactions; since entities are generated through the interactions that define them (properties), entities with different classes of properties generate independent domains of interactions: no reductionism is possible’ (p 40)

Post Scriptum

(i) ‘.. That is, man changes and lives in a changing frame of reference in a world continuously created and transformed by him. Successful interactions directly and indirectly subservient to the maintenance of his living organization constitute his only final source of reference for valid behavior within the domain of descriptions, and, hence, for truth; but, since living systems are self-referential systems, any final frame of reference is, necessarily, relative. Accordingly, no absolute system of values is possible and all truth and falsehood in the cultural domain are necessarily relative’ (p 57)

(ii) ‘Language does not transmit information and its functional role is the creation of a cooperative domain of interactions between speakers through the development of a common frame of reference, although each speaker acts exclusively within his cognitive domain where all ultimate truth is contingent to personal experience. Since a frame of reference is defined by the classes of choices which it specifies, linguistic behavior cannot be but rational, that is, determined by relations of necessity within the frame of reference within which it develops. Consequently, no one can ever be rationally convinced of a truth which he did not have already implicitly in his ultimate body of beliefs’ (p 57)

(iii) ‘Man is a rational animal that constructs his rational systems as all rational systems are constructed, that is, based on arbitrarily accepted truths (premises); being himself a relativistic self-referring deterministic system this cannot be otherwise. But if only a relative, arbitrarily chosen system of reference is possible, the unavoidable task of man as a self-conscious animal that can be an observer of its own cognitive processes is to explicitly choose a frame of reference for his system of values. .. ‘ (p 58)

Essay 2:

Autopoiesis – The Organization of the Living

Preface (Stafford Beer)

General: knowledge is categorized and so is our world view. Not wholes seen through different filters but parts derived through analysis and categorized.

The stuff of systems is relations between components. Relation is the essence of synthesis. During categorization the relations between the components are not included. Relations are discarded and alienated and distantiated from. ‘It is an Iron Maiden in whose secure embrace scholarship is trapped‘ (p64).

The world develops exponentially because it is a complex system. Knowledge is developed at a categorically at a linear pace and so in effect the understanding of the world is receding. This book is important in a general sense in that its meaning in a meta-systemic level and not at a interdisciplinary level. And so what appears is not classifiable under the old categories.

Particular: autopoietic systems are homeostats: the variable that keeps a critical system stable is the system’s own organization. Anything can change about the system but as such it survives.

Beer states that human societies are biological systems: ‘..any cohesive social institution is an autopoietic system – because it survives, because its method of survival answers the autopoietic criteria, and because it may well change its entire appearance and its apparent purpose in the process. As examples I list: firms and industries, schools and universities, clinics and hospitals, professional bodies, departments of state, and whole countries’ (p70).

If this view is valid, it has extremely important consequences. In the first place it means that every social institution (in several of which any one individual is embedded at the intersect) is embedded in a larger social institution, and so on recursively – and that all of them are autopoietic. This immediately explains why the process of change at any level of recursion (from the individual to the state) is not only difficult to accomplish but actually impossible – in the full sense of the intention: ‘I am going completely to change myself’. The reason is that the ‘I’, that self-contained autopoietic ‘it’, is a component of another autopoietic system’. These last statements also bear a relation to the experience with change management. It is related to the idea of a funnel resulting from the Western belief in the idea of progress (aka capitalism, aka free-market mechanism).

BELANGRIJK regarding social systems: the authors claim: ‘Our purpose is to understand the organization of living systems in relation to their unitary character’. This formulation of the problem begs the question as to what is allowed to be a called a living system, as theey themselves admit. ‘Unless one knows which is the living organization, one cannot know which organization is living’. They quickly reach the concusion however (Subsection (b) of Section 2 of Chapter 1) that ‘autopiesis is necessary and sufficient to characterize the organization of living systems’. THEN they display some unease, quoting the popular belief: ‘… and no synthetic system is accepted as living.’(p71). This is an important connection with memetics: now it is possible to claim that social systems (that is to say the memetic systems that bring them about) are natural systems and so they are not synthetic by design. I have argued that because it evolves it must be alive so as to be able to define the subject of evolution via the concept of living systems.

AUTOPOIESIS – The Organization of the Living

Systeem causaliteit


Common experience is that living systems are autonomous and they can reproduce. Conversely if something shows signs of autonomy then it is naively often deemed to be alive. Autonomy is exhibited by living systems through their self-asserting capacity to maintain their identity through the active compensation of deformations. The endeavor of the authors is to disclose the nature of the living organization. Their purpose is to understand the organization of living systems in relation to their unitary character. Their approach is mechanistic: no forces or principles will be adduced which are not found in the physical universe. Their interest is in processes and relations between processes realized through components, not in the properties of components (p75). It is assumed that an organization exists that is common to all living systems, regardless the nature of their components (p76). It is assumed that living systems are machines: a non-animistic view, relations are the pivot, not the components, dynamism is a feature of many machines also. The research question is: ‘What is the organization of living systems,, what kind of machines are they, and how is their phenomenology, including reproduction and evolution, determined by their unitary organization?’ (p76).

Chapter I – On Machines, Living and Otherwise

1. Machines

The properties of the components are irrelevant apart from those that participate in the interactions and transformations that constitute the system. The relevant properties determine those relations that determine the working of the machine which they integrate and constitute as a unity.

The organization of the machine is constituted by the relations that define it as a unity and determine the dynamics of the interactions and the transformations it may undergo as such a unity. The structure of the machine is constituted by the actual relations holding between the components integrating the machine in a given space. In this way a given machine can be realized by many different structures (p77).

‘Purpose’ is a means to explain more efficiently the workings of a machine: by using this concept, the imagination of the listener is invoked to reduce the task of explaining of the organization of a particular machine. It is not one of the constitutive properties of such a machine.

2. Living machines

a) Autopoietic machines

Machines can maintain some of their variables constant or within a limited range. This is expressed in the organization of the machine such that the process occurs within the boundaries of the machine which the very organization specifies. These machines are homeostatic and all feedback is internal to them. If there is a machine M with a feedback loop external to it such that a change in the output changes the input, then a M’ exists that includes the feedback loop in the organization that defines it. This is how autopoiesis is defined by the authors: ‘An autopoietic machine is a machine organized (defined as a unity) as a network of processes of production (transformation and destruction) of components that produces the components which: (i) through their interactions and transformations continuously regenerate and realize the network of processes (relations) that produced them; and (ii) constitute it (the machine) as a concrete unity in the space in which they (the components) exist by specifying the topological domain of its realization as such a network’ (p79). In this way the autopoietic machine generates and specifies its own organization through its operation as a system of production of its own components in their endless turnover under conditions of perturbations and compensation thereof.

The relations of production of components are given as processes; if these processes stop then the production stops. In an autopoietic system these relations must be regenerated by the components which they produce such that the system remain autopoietic.

Autopoietic organization means that processes interlace a network of processes of production of components which constitute the network as a unity as they realize it. Every time this organization is realized as a concrete system in a given space, the domain of deformations, which this system can withstand without loss of identity as it maintains its organization constant, is the domain of changes in which it exists as a unity (p80). Autopoietic machine:

(i) are autonomous because they subordinate all change to the maintenance of their own organization

(ii) have an individuality because they keep their organization as an invariant through its continuous production. This represents their identity which is independent of their interactions with an observer

(iii) are unities because of their autopoietic organizations and their operations specify their own boundaries in the processes of self-production

(iv) have no inputs or outputs because even though they can be perturbed by independent events and they can repeatedly undergo structural changes to compensate these. These changes are always subordinated to the maintenance of the autopoietic organization of the machine

The actual implementation of the organization in physical space depends on the properties of the physical materials that embody it. A machine will disintegrate if it is perturbed such that the organization would have to compensate outside of its domain of compensations. The actual way a machine is realized determines the particular perturbations it can suffer without disintegrating.

b. Living systems

In other words we claim that the notion of autopoiesis is necessary and sufficient to characterize the organization of living systems’ (p82).

Chapter II – Dispensability of Teleonomy

Teleology means to describe things by their apparent goal or purpose. Teleonomy means the quality of apparent purposefulness or goal-directedness in living organisms. Both are unnecessary for the understanding of the living organization.

1. Purposelessness

Ontogeny is generally considered as an integrated process toward an adult state following some internal project or program. At different stages certain structures are attained that allow it to perform certain functions. Phylogeny is viewed as the history of adaptive transformations via reproductive processes aimed at satisfying the project of the species with complete subordination of the individual to this end. Purpose or aim and function are not functions of any machine (allo or auto) but they belong to the domain of our actions, namely the domain of descriptions. When applied to some system independent from us, they reflect our considering the machine or system in some encompassing context. Define a set of circumstances that lead the machine to change following a certan path of variations in its output. The connection between these outputs and the corresponding inputs in the selected context is called the aim or purpose of the machine. This aim is necessarily in the domain of the observer. Function can be treated in the same way. Neither aim nor function of the machine constitute its organization and so they are not part of its operation. ‘Living systems, as physical autopoietic machines, are purposeless systems’ (p86).

2. Individuality

In fact, a living system is specified as an individual, as a unitary element of interactions, by its autopoietic organization which determines that any change in it should take place subordinated to its maintenance, and thus sets the boundary conditions that specify what pertains to it and what does not pertain to it in the concreteness of the realization’(p87). In its history as an autopoietic organization, change in a living system can only take place so the extent that it does not interfere with the system’s functioning as a unity; the autopoietic organization remains invariant. Ontogeny in this sense is an expression of the individuality of living systems and the way it is realized; it is a process of the becoming of a system that is fully autopoietic, at every point, the unity in its fullness and not a transit from an incomplete to a complete system. The notion of development (or even progress) is relevant from the perspective of the observer and belongs to their domain.

Chapter III – Embodiments of autopoiesis

The assertion that physical autopoietic systems are living systems requires the proof that all the phenomenology of a living system can be either reduced or subordinated to its autopoiesis .. This proof must consist in showing that autopoiesis constitutes or is necessary and sufficient for the occurrence of all biological phenomena..’(p88).

1. Descriptive and causal notions

The existence of an autopoietic system requires the existence of components with properties that determine their relations such that these realize its organization as a unity. The components are defined by their role in this organization; the domain of the relations of an autopoietic organization is closed. And in this way the autopoietic organization defines a ‘space’ in which it can be realized as a concrete system; the dimensions of this space are the relations of production of the components that realize it, namely Relations of:

(i) Constitution, that determine that the components produced constitute the topology in which the autopoiesis is realized

(ii) Specificity, that determine that the components produced be the specific ones defined by their participation in the autopoiesis

(iii) Order, that determine that the concatenation of the components in the relations of specification, constitution and order be the ones specified by the autopoiesis.

Notions that apply to all autopoietic systems are:

(i) energetic and thermodynamic considerations are not part of the design of autopoietic systems. They are however in vigor implicitly: if the components and their properties, including the relational ones, can be realized then the autopoietic system can be realized.

(ii) Specificity and Order are referential notions in the sense that they carry meaning only in the context of their part in the autopoietic organization of the system under review.

(iii) An autopoietic organization acquires topological unity via its embodiment in a concrete autopoietic system. ‘Furthermore, the space defined by an autopoietic system is self-contained and cannot be described by using dimensions that define another space. When we refer to our interactions with a concrete autopoietic system, however, we project this system upon the space of our manipulations and make a description of this projection… Our description, however, follows the ensuing change of the projection of the autopoietic system in the space of our description, not in the autopoietic space’ (p90)

(iv) Concepts such as coding and transmission of information do not refer to actual processes in an autopoietic system. They do not enter in the realization of the autopoietic system. And so the notion of specificity as described above does not imply coding, information or instructions, but it describes relations between components determined by and produced by the autopoietic organization. The notions of coding and regulation are cognitive and they represent interactions of the observer, not phenomena in the observed domain.

2. Molecular embodiments

(i) Production of constitutive relations; these relations determine the topology of the autopoietic organization including its physical boundaries: ‘There is no specification in the cell of what it is not’(p91)

(ii) Production of relations of specification; these relations determine the identity (properties) of the components of the autopoietic organization and as a consequence its physical factibility. There is no production in the autopoietic system (such as a cell) of relations of specification that do not pertain to it.

(iii) Production of relations of order

These relations determine the dynamics of the autopoietic organization by deteminning the concatenation of the production of relations of constitution, specification and order, and hence its actual realization. This occurs via the production of components that realize the production of relations the production of relations of constitution, specification and order.’There is no ordering through the autopoietic organization of the cell of processes that do not belong to it.’ (p92)

Compensation of deformation keeps the autopoietic system in the autopoietic space.’(p93)

3. Origin

The geometric properties of molecules determine their relations of constitution, namely the topology. Their chemical properties determine their possible interactions hence their relations of specificity. Taken together they determine the sequence and concatenation of the molecular interactions, namely their relations of order. An autopoietic system can exist if its relations of order, is produced and remains constant, concatenate the relations of constitution and specificity in such a way that the system remains autopoietic. Asa consequence, the question about the origin of an autopoietic system is the question about the conditions that must be satisfied for the establishment of an autopoietic space: ‘This problem (of origin DPB), then, is.. a general one of what relations .. any constitutive units should satisfy.’(p93). This leads to the following considerations:

(i) ‘An autopoietic system is defined as a unity by and through its autopoietic organization.’ (p93) ‘Without unity in some space an autopoietic system is not different from the background in which it is supposed to lie, and, hence, can only be a system in the space of our description where its unity is conceptually stipulated’ (p94)

(ii) ‘The establishment of an autopoietic system cannot be a gradual process; either a system is an autopoietic system or it is not’ (p94). ‘Accordingly there are not and there cannot be intermediate systems.’ (p94)

(iii) ‘Auto-catalytic processes do not constitute autopoietic systems because among other things, they do not determine their topology.’ (p94) A unity is defined by operations of distinction as provided by the autopoietic system; .. its origin is co-circumstantial with the establishment of this operation’(p94)

(iv) Two aspects concerning the origin of autopoietic systems: a) factibility and b) the possibility of their spontaneous occurrence. a) the establishment of a system depends on the availability of the components that constitute it and the proper concatenation of their interactions. If these occur then the system is realized. b) given factibility and given the existence of factual autopoietic system, natural conditions exist for the occurrence of autopoietic systems.

Chapter IV – Diversity of Autopoiesis

Reproduction requires the existence of a unity to be reproduced. This is necessarily secondary to the establishment of such a unity. Evolution requires reproduction and the possibility of change and it is necessarily secondary to the establishment of reproduction.

1. Subordination to the condition of unity

Unity is the distinguishability of a unity from a background, hence from other unities. It is the sole necessary condition for existence in a given domain. Its nature and the domain in which it exists are specified by the process of its distinction and determination. ‘Unity distinction is .. an operative notion referring to the process through which a unity becomes asserted or defined: the conditions which specify a unity determine its phenomenology. In living systems, these conditions are determined by their autopoietic organization. In fact, autopoiesis implies the subordination of all change in the autopoietic system to the maintenance of its autopoietic organization, and since this organization defines it as a unity, it implies total subordination of the phenomenology of the system to the maintenance of its unity’ (p97). Consequences of this subordination are:

(i) the establishment of a unity defines the domain of its phenomenology, but the structure of the unity determines the realization of the phenomenology in that domain.

(ii) if the new unity is autopoietic then its phenomenology depends on maintenance of the autopoiesis, which in turn may or may not depend on the autopoiesis of its components

(iii) The identity of an autopoietic unity is maintained while it is autopoietic: as long as it is a unity in physical space and it is a unity in autopoietic space, regardless of the extent to which it is otherwise transformed.

(iv) Only after the autopoietic unity as such is established can it reproduce as a biological phenomenon.

2. Plasticity of ontogeny

The ontogeny means the history of the structural transformation of a unity; in the case of an autopoietic system, it means the history of the maintenance of its identity through continuous autopoiesis in physical space. Comments:

(i) Different classes of autopoietic systems have different classes of ontogenies

(ii) Given that it does not have inputs or outputs, the organization of an autopoietic system determines which changes the system may undergo without loss of identity

(iii) The way the autopoiesis is realized during ontogeny may change, but it should take place without loss of identity meaning uninterrupted autopoiesis

(iv) The changes that an autopoietic system may undergo without a loss of identity are a consequence of deformations; the sequence of the compensating of the deformations is determined by the sequence of the deformations. Nota bene: ‘Although in an autopoietic system all changes are internally determined, for an observer its ontogeny reflects its history of interactions with an independent ambience.’(pp. 98-9)

(v) An observer may distinguish internally and externally generated perturbations even though these are intrinsically indistinguisshable to the autopoietic system itself.

(vi) Changes that an autopoietic system can undergo while maintaining identity can be: a) conservative change in which only the relations between the components change and b) innovative changes, in which the components themselves change. In the first case the system remains positioned on the same point in the autopoietic space, because its components are invariant. In the second case, the interaction leads to a change in the way the autopoiesis is realized and to a change in the position in the autopoietic space, because its components have changed.

3. Reproduction, a complication of the unity

Reproduction is operationally secondary to the establishment of the unity: it cannot be a defining feature of the organization of a unity such as a living system. Living systems are characterized by their autopoietic organization and as a consequence reproduction must be a complication of the autopoietic organization during autopoiesis. ‘.. and its origin must be viewed and understood as secondary to, and independent from the origin of the living organization… in order to understand reproduction and its consequences in autopoietic systems we must analyze the operational nature of this process in relation to autopoiesis’(p100)

(i) Replication – a system generates unities different from itself but in principle identical to each other. Copy – an object or phenomenon is mapped upon a different system so that an isomorphic object or phenomenon is realized in it. Self-reproduction – a system produces another system with a similar organization through a process that is coupled to the process of its own production. ‘It is apparent that only autopoietic systems can self-reproduce because they are realized through a process of self-production (autopoiesis)’ (p101).

(ii) Only in self-replication is the mechanism of reproduction internal (in principle identical) to the pattern reproduced.

(iii) In terrestrial living systems currently known autopoiesis and reproduction are directly coupled. In them reproduction is a moment in autopoiesis and the same mechanism that constitutes the one also constitutes the other, and consequentially: a) self-reproduction must take place during autopoiesis, b) the individuals produced are self-contained and no external self-reproduction is a form of autopoiesis; variation and constancy in each reproductive step are part of the reproductive mechanism but an expression of autopoiesis c) variation of the way autopoiesis is realized can only arise as a modification from a pre-existing autopoietic structure. As a consequence, to maintain autopoiesis constant, variation can only arise from perturbations that require further homeostatic complications d) Replication takes place independently from autopoiesis, copy takes place in heteropoiesis, self-reproduction is exclusive for autopoiesis and its origin is bound to it as a historically secondary phenomenon e) coding, message or information are not applicable to the phenomenon self-reproduction: ‘Thus, in self-reproduction there is no transmission of information between independent entities; the reproducing and the reproduced unities are topologically independent entities produced through a single process of autopoiesis in which all components have a constitutive participation’ (p102).

4. Evolution, a historical network

A state in a sequence of states arises as a modification of a previous state and not as an independent state. The notion of history may refer to the antecedents of a given phenomenon as a succession of events leading up to it or it may be used to characterize the phenomenon as a process.

(i) Evolution is the history of change in the realization of an invariant organization embodied in independent unities sequentially realized through reproductive steps while the structural realization of the unity at each step arises as a modification of the previous one which constitutes its sequential and historical antecedent.

(ii) Reproduction by replication or by copy of an unchanging model implies an uncoupling of the organization of the unities produced and their producing mechanism.

(iii) Ontogeny and evolution are completely different phenomena: in ontogeny the identity is never interrupted, while in evolution a succession of identities is generated through sequential reproduction. Only unities have ontogenies.

(iv) ‘Selection, as a process in a population of unities, is a process of differential realization in a context that specifies the unitary structures that can be realized’ (p105). This is illustrated by the genotypical space and phenotypical space, the first via variation ‘offering’ possibilities to the second as an experiment to select the ones for survival in that specific context a/p quote above.

(v) Evolution takes place as a history of change in the realization of an invariant organization embodied in the realization of successively generated unities. Reproduction must allow for change in the structure of the sequentially reproduced unities.

(vi) ‘Of the two possible mechanisms that can give rise to sequential reproduction, the only one which is accessible to autopoietic systems in the absence of an independent copying mechanism, is self-reproduction, because of the coincidence between the reproducing mechanisms and the reproducing unity. Sequential reproduction through copy takes place a present only in relation to the operation of living systems in their domain of interactions, particularly in cultural learning; cultural evolution takes place through sequential copy of a changing model in the process of social indoctrination, generation after generation’ (p106)

(vii) ‘A species is a population or a collection of populations of reproductively connected individuals which are thus the nodes in a historical network’(p106)

Strictly, a historical network is defined by each and every one of the individuals which constitute its nodes, but it is at any moment represented historically by the species as the collection of all the simultaneously existing nodes of the network; in fact, then, a species does not evolve because as a unity in the historical domain it only has a history of change. What evolves is a pattern of autopoietic realization embodied in many particular variations in a collection of transitory individuals that together define a reproductive historical network. Thus, the individuals, though transitory, are essential, not dispensable, because they constitute a necessary condition for the existence of the historical network which they define. The species is only an abstract entiry in the present, and although it represents a histoorical phenomenon it does not constitute a generative factor in the phenomenology of evolution, it is its result’(p107)

5. Second and third order autopoietic systems

If the conduct of two or more unities is such that is a domain where the conduct of one or more of them is a function of the conduct of the others then the unities are said to be coupled. Coupling arises as a result of mutual modifications undergone by the unities in the course of their ongoing interactions while their identities remain intact. If the identity of a unity is lost then a new unity may be generated as a result of it, but no coupling takes place.’.. coupling leads also to the generation of a new unity that may exist in a different domain from the domain in which the component-coupled unities retain their identity’ (p107)

The nature of the coupling is determined by their autopoietic organization:

(i) Autopoietic systems can interact without loss of identity as long as reciprocally inflicted perturbations lead to compensable disturbances in their structures. They can couple and constitute a new unity while their individual paths of autopoiesis become sources of the specification of each other’s ambience. To persist as a unity the disturbances must remain in the domain permitted by their organizations. As a result the coupling can become invariant while the coupled systems undergo structural changes as a consequence of it. In this way a composite system can develop in which the autopoiesis of the individual systems is subordinate to the ambience defined by the autopoiesis of all the other autopoietic components of the composite unity. Such a system will be defined as a unity by the coupling relations of its component autopoietic systems. A system whose autopoiesis entails the autopoiesis of the coupled unities which realize it, is an autopoietic system of a higher order.

(ii) ‘An autopoietic system can become a component of another system if some aspects of its path of autopoietic change can participate in the realization of this other system’ (p110)

(iii) ‘If the autopoiesis of the component unities of a composite autopoietic system conforms to allopoietic roles that through the production of relations of constitution, specification and order, define an autopoietic space, the new system becomes in its own right an autopoietic unity of the second order’ (p110) An example on earth is the multicellular pattern of organization.

Chapter 5 – Presence of Autopoiesis

1. Biological Implications

.., hence in a living system, loss of autopoiesis is disintegration as a unity and loss of identity, that is, death’ (p112).

(i) ‘The phenomenology of living systems, then, is the mechanical phenomenology of physical autopoietic machines’(p113)

(ii) ‘A biological explanation must be a reformulation of in terms of processes subordinated to autopoiesis, that is, a reformulation in the biological phenomenological domain’ (p114)


(iv) ‘.. the biological phenomenological is not less and not more than the phenomenology of autopoietic systems in the physical space’ (p114)

2. Epistemological implications

(i) ‘As a result, the biological domain is fully defined and self-contained, no additional notions are necessary, and any adequate biological explanation has the same epistemological validity that any mechanistic explanation of any mechanistic phenomenon in the physical space has’(p116)

(ii) ‘.. an autopoietic system .. must be explained through autopoietic mechanical relations in the mechanical domain, the phenomena generated through interactions of the autopoietic unities must be explained in the domain of interactions of the autopoietic unities through the relations that define that domain’ (p117)

(iii) ‘The organization of the individual is autopoietic and upon this fact rests all its significance: it becomes defined through its existing, and its existing is autopoietic. Thus biology cannot be used anymore to justify the dispensability of the individuals for the benefit of the species, society or mankind under the pretense that its role is to perpetuate them. Biologically the individuals are not dispensable’ (p 118)

3. Cognitive Implications

The domain of all the interactions into which an autopoietic system can enter without loss of identity is its cognitive domain; this is the domain of all the descriptions it can possibly make. The particular mode of autopoiesis determines its cognitive domain hence the diversity of its behavior.

(i) knowledge (its conduct repertoire) is relative to the cognitive domain of the knower. If the way in which the autopoiesis is realized changes then the knowledge of the unity changes. In that sense knowledge is a reflection of the ontogeny of an organism, because it is a process of continual structural change without loss of autopoiesis and a continual specification of the behavioral capacity hence of its actual domain of interactions.

(ii) Autopoietic systems may interact with each other under conditions that result in behavioral coupling. Autopoietic conduct of A is the source of a deformation in B. The compensatory behavior in B is the source of a deformation in A, whose compensatory behavior for B is the source ..&c. These interactions occur in a chain while A and B interact independently based on their internal structure. Their behavior however is a source of compensable deformations to the other which can be described as meaningful in the context of the interactions in light of the coupled behavior. These are communicative interactions. This consensual domain of communicative interactions where behaviorally coupled organisms orient each other with modes of behavior based on their internal structure is the linguistic domain. Communicative and linguistic interactions are non-informative; organism A does not determine the conduct of organism B; that is determined by their proper organizations.

(iii) ‘An autopoietic system capable of interacting with its own states, and capable of developing with others a linguistic consensual domain, can treat its own linguistic states as a source of deformations and thus interact linguistically in a closed linguistic domain’ (p121). Properties of such systems are: a) An autopoietic system can treat some recursively generated states as objects of further interactions. This can give rise to a meta-domain of consensual distinctions appearing to the observer as a domain of interactions with representations of interactions. The system now operates as an observer. This can occur at any time and so the domain of these recursive interactions with its own states is in principle infinite, unless autopoiesis is lost b) A living system capable of being an observer can interact with descriptive states of itself in the sense of interactions with its own self-linguistic states. It is now an observer of itself as an observer, which can be repeated in an endless manner. The domain is called self-observation and consider self-conscious behavior is self-observing behavior, namely in the domain of self-observation. The observer as an observer remains in a descriptive domain as no description of absolute reality is possible. Some such description would require an interaction with the absolute by the autopoietic organization of the observer, not by an agent of it.

Living systems are an existential proof; they exist only to the extent that they can exist. The fantasy of our imagination cannot deny this. Living systems are concatenations of processes in a mechanistic domain; fantasies are concatenations of descriptions in a linguistic domain. In the first case, the concatenated unities are processes; in the second case, they are modes of linguistic behavior’ (p122)

Survey of Schools in Economics

Ecological economics/eco-economics refers to both a transdisciplinary and interdisciplinary field of academic research that aims to address the interdependence and coevolution of human economies and natural ecosystems over time and space.[1] It is distinguished from environmental economics, which is the mainstream economic analysis of the environment, by its treatment of the economy as a subsystem of the ecosystem and its emphasis upon preserving natural capital.[2]

Heterodox economics refers to methodologies or schools of economic thought that are considered outside of “mainstream economics”, often represented by expositors as contrasting with or going beyond neoclassical economics.[1][2] “Heterodox economics” is an umbrella term used to cover various approaches, schools, or traditions. These include socialist, Marxian, institutional, evolutionary, Georgist, Austrian, feminist,[3] social, post-Keynesian (not to be confused with New Keynesian),[2] and ecological economics among others.

Institutional economics focuses on understanding the role of the evolutionary process and the role of institutions in shaping economic behaviour. Its original focus lay in Thorstein Veblen’s instinct-oriented dichotomy between technology on the one side and the “ceremonial” sphere of society on the other. Its name and core elements trace back to a 1919 American Economic Review article by Walton H. Hamilton. Institutional economics emphasizes a broader study of institutions and views markets as a result of the complex interaction of these various institutions (e.g. individuals, firms, states, social norms). The earlier tradition continues today as a leading heterodox approach to economics. Institutional economics focuses on learning, bounded rationality, and evolution (rather than assume stable preferences, rationality and equilibrium). Tastes, along with expectations of the future, habits, and motivations, not only determine the nature of institutions but are limited and shaped by them. If people live and work in institutions on a regular basis, it shapes their world-views. Fundamentally, this traditional institutionalism (and its modern counterpart institutionalist political economy) emphasizes the legal foundations of an economy (see John R. Commons) and the evolutionary, habituated, and volitional processes by which institutions are erected and then changed (see John Dewey, Thorstein Veblen, and Daniel Bromley.)

The vacillations of institutions are necessarily a result of the very incentives created by such institutions, and are thus endogenous. Emphatically, traditional institutionalism is in many ways a response to the current economic orthodoxy; its reintroduction in the form of institutionalist political economy is thus an explicit challenge to neoclassical economics, since it is based on the fundamental premise that neoclassicists oppose: that economics cannot be separated from the political and social system within which it is embedded.

Behavioral economics, along with the related sub-field, behavioral finance, studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation.[1] Behavioral economics is primarily concerned with the bounds of rationality of economic agents. Behavioral models typically integrate insights from psychology, neuroscience and microeconomic theory; in so doing, these behavioral models cover a range of concepts, methods, and fields.[2][3] Behavioral economics is sometimes discussed as an alternative to neoclassical economics.

Prospect theory

In 1979, Kahneman and Tversky wrote Prospect Theory: An Analysis of Decision Under Risk, an important paper that used cognitive psychology to explain various divergences of economic decision making from neo-classical theory.[12] Prospect theory has two stages, an editing stage and an evaluation stage.

In the editing stage, risky situations are simplified using various heuristics of choice. In the evaluation phase, risky alternatives are evaluated using various psychological principles that include the following:

(1) Reference dependence: When evaluating outcomes, the decision maker has in mind a “reference level”. Outcomes are then compared to the reference point and classified as “gains” if greater than the reference point and “losses” if less than the reference point.

(2) Loss aversion: Losses bite more than equivalent gains. In their 1979 paper in Econometrica, Kahneman and Tversky found the median coefficient of loss aversion to be about 2.25, i.e., losses bite about 2.25 times more than equivalent gains.

(3) Non-linear probability weighting: Evidence indicates that decision makers overweight small probabilities and underweight large probabilities – this gives rise to the inverse-S shaped “probability weighting function”.

(4) Diminishing sensitivity to gains and losses: As the size of the gains and losses relative to the reference point increase in absolute value, the marginal effect on the decision maker’s utility or satisfaction falls.

Research Plan, Version 17 mei 2016

Below some research ideas and structure for the development of a new firm theory.

A theory is relevant and useful that explains the existence, the behavior and the death of firms with a wide application because of the changing relation between individual people and firms. This is relevant for an extended audience associated with firms such as policy makers and academics even when the latter differ only in their academic school of thought. Such a theory must necessarily be independent of situational variables such as the sector of the firm’s business, its size, the people associated with it, its financing, its assets and all kinds of temporal issues. Bearing in mind the above, the research question can be posed:

What is a firm?’

A hypothesis anwering this question is:

A firm is a pattern in space and time produced by global behavior of some system. Said global behavior is produced by behavior of individual people. Material and energy flow through’ the pattern – the system bringing forth a firm is not in equilibrium. The pattern that is the firm computes its relation to its environment thus acquiring and maintaining its identity. This identity ceases to exist if the firm dies, usually because of its associating with another firm

Meta. The current shape that firms have taken is a result of the set of beliefs that are fashionable in western society. They are of the same stuff that our ‘other’ beliefs are made of: it harks back to what ‘we’ believe to be, to be good, to be useful. We know these things because they have been taught us from an early age on. They are our beliefs sufficiently corroborated by reality to represent reality to us: they work to some sufficient measure, we consider them to be ‘true’, to us they are knowledge, more than just any belief. To enable a peek at this belief system from outside it is required to ‘unbelieve’ these things and not take them as a given and not defend them as beyond doubt. Doing that, however, implies rejecting many certainties as such: the role of humans in the universe, the existence of God, human consciousness, human freedom of will and agency, moral and ethical certainties such as ‘to work is a good thing’. It is required to look beyond a number of dogmas that for practical reasons people consider truths. In doing so it is also required to release any divinity involved in the capabilities and the faculties, of the human brain or human behavior. As a consequence it is required that human beings exist in the same space of possibilities as every other thing in the universe. They are not fast-tracked nor do they otherwise receive a ‘special treat’. And the same goes for human products: they are not sprinkeled with ‘human stardust’: they too must make do with whatever hand nature deals them. Firms also have no special deal with the laws of nature; they must allow the general rules to rule over them also.

Ontology. This hypothesis above generalizes the behavior of firms to a pattern to which people associated with the firm contribute with their individual behavior in their contexts. The pattern can autonomously develop behavior particular to it and in its own context, independent of the people associated with the firm. In this frame of thought the relation between the behavior of people and the behavior of the firm is the subject of study. The people needn’t per se be the master of the firm, actively controlling it, nor does the converse: that firms develop behavior without the involvement of the people associated, hold true. The subject of this study is the behavior of the individual, the behavior of the firm that is the result, and the process that leads from the individual to the collective behavior. This process can be seen as an operation on or a transposition of the individuals’ behavior to the firm’s behavior. However the case may be, the global behavior of the firm can be different from, even contrary to that of the individuals contributing to the extent that it can be damaging for the indivduals bringing it forth. Looking at the question in this generalized way and not restricted to the perspective of people associated with firms – or other mechanics generally traditionally deemed relevant for firm behavior – allows an unbiased observation of the relation between firms and the people associated with them. Somewhat new is the view that firms can exhibit autonomous behavior, which represents a new souvereign being or perhaps adding new characteristics to an existing category of being and attempting to add scope to what is at this point knowable.

Epist. People’s behavior is to some extent motivated by their beliefs. A belief in turn is information believed true after some level of confirmation with reality, however shallow and indirect. It is therefore not fact, but how reality is modeled by the believer. The extent to which it is corroborated by scientific proof and appropriate frame is decisive for whether it is not mere belief but factual knowledge. Individual people’s behavior driving the overall behavior of the firm is therefore not necessarily motivated by factual reality but what people believe to be true and have accepted as a fact. To them there is no knowing of the alternatives in practical terms at a reasonable cost or in a reasonable time-frame, if at all. The behavior of firms and the relation of firms and individual people is driven by what people believe to be true, including what concerns the actual relationship itself. To phrase the hypothesis in this generalized way allows observation of said relation in an unbiased way so as to assess the beliefs that are at its foundations for what they are. This view affects this study in the sense that what the firm is in reality is a result of the beliefs of individual people collectively: in a sense the firm is what it is said to be. The opposite – at this point fashionable – hypothesis is that firms are designed, developed or built and executed conform a preconceived plan or that they are at least being oriented towards some definable level of utility for all involved. In that view the firm itself is the subject of people’s efforts ‘in the field’ and the subject of the studies of firm theories. This is contrary on this study at hand, because it considers the firm itself to be the object of study, while this study considers it a result of the forces internal and external to the firm that motivate it (sic!) to behave in certain ways. It also implies individual people can improve a given state the firm is in, or its perceived utility for the respective stakeholders. The assumption of this study that this is not automatic.

Meth. A model of reality is suggested that sets out to explain the behavior of firms and their relation with people. The final objective of the model is to predict some aspects of the behavior of firms. In so doing this book loosely follows the train of logic leading to the proof of the hypothesis above. Using the developed model firms are observed in an unbiased way, namely based on the current system of beliefs of the western world.

The scope of the concept of a firm used here is restricted so that it is assumed:

  • to have more than one person associated with it

  • to encompass more than a strictly legal body, namely informational

  • to be detachable from the physical objects a firm can encompass and employ

  • to differ from other kinds of human organisations only because its activities are owned by someone or something

  • that it can be studied as a concept and as a real object in the period from their birth to their death

The cultural elements pivotal to this study are restricted so that they are assumed to be of part of culture and traditions considered to be of western origin, but increasingly wide-spread geographically.

The objective is not to design a normative model: with other belief systems, other firm, or organisational in a wider sense, characteristics might be possible. At best it can show how this belief might lead to that relation between people and their firms and the relation with the world around them. And so in no way is the model intended to qualify peope’s beliefs regarding this or to issue advice regarding people’s actions required for that. Otherwise the approach is pragmatic in the sense that whatever works to predict the current situation is used.

As the study is to a large extent philosophical in nature, the approach is to describe the state of the art in the respective fields, namely universal darwinism, psychology of free will, belief and thinking, neuro-psychological processes of decision making, theoretical ecology, cognitive science, computational sciences, complex sciences, thermodynamics, memetics that cover the chain of logic of the study and to argue and debate relevant viewpoints in each field and their connections. The linking pin is the way that the firm computes its anticipated future. To prove that the individual people’s collectively held belief systems can produce behavioral patterns such as a firm, computer simulation is used.

The stance is constructivist in the sense that a pivot is that the behavior of individuals propels the behavior of the collective, namely the firm, which in turn is to a large extent the environment of the individual associated with the firm in that way motivating its behavior. And in that sense the knowledge of reality of the associated individual depends on the knowledge structures of the system, the firm in this case, that individual amasses by interacting with the system.

The individual acts in the context created by her own actions and those of other entities in the environment of the firm as a system: the agency of the individual is less than complete while structure is an important influence but dependent on her own actions. To bridge this gap between agency and structure, the construct of Jobs is proposed1 as a locus for thoughts. A subset of the class of thoughts is the class of knowledge objects, a concept describing social relations within cultures, unfolding structures that are non-identical with themselves.

Social constructionism examines the development of jointly constructed understandings of the world that form the basis for shared assumptions about reality. The theory centers on the notion that human beings rationalize their experience by creating models of the social world and sharing these via language. A social construct concerns the meaning placed on an object or an event by a society, and adopted by the individual members of that society with respect to how they view or deal with it. A social construct can be widely accepted as natural by the members of the society, but not necessarily by those outside it, and the construct would be an “invention or artifice of that society.”

Social constructionism uncovers ways in which members participate in the construction of their perceived social reality. It involves looking at the ways social phenomena are created, institutionalized, known, and made into tradition by humans. “Social construction” may mean many things to many people. Ian Hacking argues that when something is said to be “socially constructed”, this is shorthand for at least the following two claims: 0) In the present state of affairs, X is taken for granted; X appears to be inevitable, 1) X need not have existed, or need not be as it is. X, or X as it is at present, is not determined by the nature of things; it is not inevitable.

Hacking adds that the following claims are also often, though not always, implied by the use of the phrase “social construction”: 2) X is quite bad as it is, 3) We would be much better off if X were done away with, or at least radically transformed.

Social constructionism is cultural in nature and critics argue that it ignores biological influences on behavior or culture. Many scientists suggest that behavior is a complex outcome of both biological and cultural influences or a nature–nurture interactionism approach is taken to understand behavior or cultural phenomena.

Phenom. From a logical perspective the suggested theory is a construct of a number of partial theories. They loosely start from the philosophies pertaining to the various disciplines listed in the alinea above. Some of them, such as the theory of free will, the theory of memetics, the theory of universal darwinism and the theory of universal computation, are for various reasons and to a various extent dynamic at this time. Some parts of the developed model are therefore falsifications per se and in its entirety the hypothesis is a generalisation and therefore scientifically a falsification also. However, an advantage of a hypothesis at this level over one at a lower level of abstraction is that discussion about the foundations of the concept of firms and their role in society is possible, unbiased by the supposed role of people in its establishment or maintenance.

It is hoped that this overarching theory for firms become an item of discussion and in that way to ‘firm itself up’ in various directions as a viable and robust theory. In this way it is hopefully a contribution to the ongoing discussion about the role of the firm in the development of society.

@naar boven bij ontologie of naar intentional stance believe – act

2) Van gedragsverklaring naar handelingsverklaring: Popper probeert dualisme te overwinnen, namelijk een waarheid voor de natuur en iets anders voor de mens. De essentie van die brug is dat gedrag dat bijv. een amoebe vertoont iets anders is dan handelen dat een mens vertoont: het verschil is overleg. Dat laatse kan niet met natuurwetten worden verklaard, omdat daar het overleg en de rationaliteit (precies het verschil tussen de beide wetenschappelijke benaderingen) niet in is inbegrepen.

1 The construct of ‘situation‘ in methodological situationalism [Knorr-Cetina, K. and Cicourel, A.V.. . The micro-sociological challenge of macro-sociology: towards a reconstruction of social theory and methodology . 1981 . Advances in social theory and methodology . Boston . pp. 1-47].

Notities over Methode / Methodologie

Philosophy (φιλοσοφία, philosophia, “love of wisdom”) is the study of general and fundamental problems such as existence, knowledge, values, reason, mind, and language. Philosophical methods include questioning, critical discussion, rational argument, and the systematic presentation of big ideas. Philosophy is the general and fundamental study of almost any topic. Richard Feynman argues that the philosophy of a topic is irrelevant to the primary study of a topic, saying that “philosophy of science is as useful to scientists as ornithology is to birds.”

Philosophies of the particular sciences range from questions about the nature of time raised by Einstein’s general relativity, to the implications of economics for public policy. A central theme is whether one scientific discipline can be reduced to the terms of another. That is, can chemistry be reduced to physics, or can sociology be reduced to individual psychology? The general questions of philosophy of science also arise with greater specificity in some particular sciences. For instance, the question of the validity of scientific reasoning is seen in a different guise in the foundations of statistics. The question of what counts as science and what should be excluded arises as a life-or-death matter in the philosophy of medicine. Additionally, the philosophies of biology, of psychology, and of the social sciences explore whether the scientific studies of human nature can achieve objectivity or are inevitably shaped by values and by social relations.

Metaphysics replaces the unargued assumptions embodied in such a conception with a rational and organized body of beliefs about the world as a whole. Epistemology seeks by argument to make explicit the rules of correct belief formation. Everyone governs their conduct by directing it to desired or valued ends. Ethics, or moral philosophy, in its most inclusive sense, seeks to articulate, in rationally systematic form, the rules or principles involved.

Methodologie is de verantwoording van de gebruikte methode: die kan de vorm hebben van een debat, een beargumenteerd standpunt van een school, beschrijvend onderzoek naar een standpunt of debat, filosofische analyse.

Volgens welke procedure kunnen wij tot empirisch toetsbare economische theorieen komen en hoe kan een theorie worden getoetst? De hypothetisch deductieve methode schrijft een procedure voor.

Volgens het hypotetisch deductieve model van wetenschappelijk onderzoek wordt bij een toetsing dezelfde procedure gevolgd als bij de toepassing: in beide gevallen wordt volgens Jehle (par. 2.1.2) de theorie opgevat als een wetmatige uitspraak: ‘onder deze set van omstandigheden x doet zich verschijnsel y voor.’

HD-m: observatie >> inductie >> deductie >> toetsing >> evaluatie>> ga terug naar observatie.

Fasen van HD-m volgens Popper: P >> TT >> EE >> P* >> TT* etc (P probleemstelling, T tentative trial, E elimination of error, * volgende ronde, P* is de probeemstelling minus de geconstateerde foute oplossing (error). Economen hebben veel toetsing weggelaten en de cyclus niet volledig doorlopen.

Het doel van HD-m is kennis verwerven die in staat stelt te verklaren of te voorspellen. Hiervoor is het deductief-nomologisch model door Hempel-Oppenheim geformuleerd. De pijlers van dit model zijn: de ‘covering law these’ en de ‘symmetrie these’.

Covering law: een wetenschappelijke verklaring heeft de vorm van een syllogisme. Voor die randvoorwaarden of beginvoorwaarden geldt deze uitspraak altijd: covering.

Symmetrie: verklaren en voorspellen hebben dezelfde logische structuur. Het verschil in aanpak is dat de verklaring uitgaat van een verschijnsel terwijl de voorspelling erop vooruitloopt. Uitgaande van de bekende omstandigheden en kennende de wetten is een verschijnsel te verklaren. Voorspellen werkt andersom: een voorspelling die uitkomt wordt een verklaring. Elke verklaring is potentieel een voorspelling en omgekeerd [Hempel 1965, p 367]. De denkmethode is andersom: progressive of regressive deductie (par. 2.3.1.): op basis van verwachtingen over omstandigheden een voorspeling doen over een ontwikkeling, toetsen of die voorspelling uitkomt en dus het model valide is.

De logische (1 tm 3) en empirische (4) adequaatheidsvereisten voor wetenschappelijke verklaringen zijn [Hempel 1965, pp 247-9]:

1) logisch moeten de premissen relevant zijn voor het te verklaren of te voorspellen verschijnsel

2) de major premisse moet een wet zijn en ten minste 1 premisse moet geldingscondities bevatten

3) De explanans uitspraken moeten zo zijn geformuleerd dat zij empirisch toetsbaar zijn

4) Bij toepassing moet voldaan zijn aan de eis dat de de explanans uitspraak empirisch waar is.

Hypothese = gissing, vermoeden: hoe meer mogelijkheden worden uitgerangeerd des te informatiever de gissing.

Veronderstelling = aanname. Hulphypothese = aanvullende aanname.

Theorema = afgeleide stelling, slotconclusie. Een theorema kan een hypothese zijn.

Lemma = tussentijdse conclusie

Axioma = woord dat zelf niet meer deductief logisch kan worden bewezen

Afnemende graad van algemeenheid: fundamentele veronderstellingen > veronderstellingen over het verklaringsideaal > veldveronderstellingen > hulphypothesen

Verifieren van een hypothese: toetsingsprocedure die ten doel heeft vast te stellen of een bewering waar is, in overeenstemming met de feiten. Universele hypothese (voor alle x geldt) kan niet worden geverifieerd maar wel gefalsifieerd. Existentiele hypothese (er is tenminste 1 x waarvoor geldt) kan alleen worden geverifieerd (geen yeti vinden betekent niet dat niet bestaat). Singuliere hypothese (x is een y) kan worden geverifieerd en gefalsifieerd. Gecorroboreerd betekent: ondanks verschillende pogingen om een hypothese te weerleggen is dat vooralsnog niet gelukt.

Niet goed toetsbaar zijn: tautologie, definitie, normatieve uitspraken, vage uitspraken, hypothesen die wel in theorie maar om allerleid redenen niet in de praktijk toetsbaar zijn.

De combinatie van verifieren en falsifieren is reduceren ofwel herleiden. Het constateren van feiten kan niet alleen met falsificatie. Bij controle van een paspoort wordt eigenschap E n+1 gevonden. Die moet inductief aan de lijst van te controleren elementen voor de vaststelling van de echtheid van het paspoort worden toegevoegd. Een vleugje inductie is nodig om verder te komen.

Via de HD-m methode worden hypotheses getoetst en zo wordt vooruitgang geboekt. Is de kennisaanspraak controleerbaar, is hij terecht, en neemt onze kennis erdoor toe?

Logisch geldige argumentatievormen (Methode – Logica):

1 Modus Ponens: Deductie – Deductief: als p dan q, p, dus q

3 Modus Tollens: Reductie – Deductief: als p dan q, niet q, dus niet p

Logisch niet geldige argumentatievormen (Methode – Logica):

2 Als p dan q, niet p, dan niet q?

4 Drogreden, bevestiging van de consequent: Als p dan q, q, dan p?

Deze zijn logisch dus niet geldig maar kunnen nuttig zijn om een onderzoek op nieuw spoor te zetten 2 of in een bepaalde richting voort te zetten 4.

Nieuwere wetenschapsfilosofie

De epistemologische opdracht is uit te vinden of een hypothese geloofwaardig is of niet. Als p dan q, niet q, dus niet p: als we q betrouwbaarder vinden dan p dan keuren we p af. Wat tegen de hypothese pleit laten we zwaarder wegen dan wat er voor pleit. Omdat de empirie niet zo uitsluitend is als soms wordt aangenomen bestaat het toetsen vooral uit het toetsen van een hypothese aan een andere hypothese [Against Method . Feyerabend 1975]. Want wat wij een feit noemen hebben wij omarmd als vertrouwenwekkend. Maar een feit is niet meer dan een getekende checque: pas iets waard als iemand zijn vertrouwen eraan heeft gegeven.

Maar niet het hele belang van de methode is verloren: met de lancering van een nieuwe theorie krijgt ook het veld vorm en worden nieuwe toetsingsmethodes ontwikkeld. Als p en q dan r, niet r, dus niet (p en q). Waar zit dus de fout, in p of in q? Nooit wordt een hypothese volledig geisoleerd getoetst, vrijwel altijd zijn aanvullende hypotheses nodig, die dan ook worden meegetoetst.

Feiten zijn niet een resultaat van objectieve waarneming en beschrijving, maar van een constructie, een samenspel van analyse en synthese. Bovendien zijn er waarnemingsprotocols, definities en klassificaties. Feiten zijn dus theorie afhankelijk.

Wetenschappelijk observeren is een vorm van experimenteren: het is planmatig en protocollaire activiteit. De eisen eraan zijn: 1) het waarnemingssubject is inwisselbaar, 2) interpretatie en registratie moet gescheiden zijn (vooroordelen vermijden), 3) trefzekere kwalificatie van verschijnselen leidend tot kwantificering ervan.

Introspectie als naar binnen gerichte observatie methode: gezond- of boerenverstand.

Simulatie is proefondervindelijk onderzoek op een model. Het doel is te weten te komen wat er zal gebeuren als de echte condities overeenkomen met de modelcondities. Het gaat niet om de exacte herhaling (ivm de moord op de stand-in) maar om een nabootsing ervan. Simulatie is niet een toestand maar een toedracht. Simulatie als experimentele methode is een manier om via manipulatie van het model informatie te verkrijgen over de structuur of de werking van het systeem dat door dit model wordt gerepresenteerd. Modellen zijn schakels tussen onze wiskundige kennis en de wereld: ‘De wereld is de wereld, alleen onze modellen kunnen wiskundig zijn.’ [Harré, R. . An Introduction to the Logic of Sciences . London . 1960, p 95].

Een simulatie is geen kopie van de werkelijkheid maar komt ermee overeen in belangrijk geachte opzichten. Het fundamentele probleem is een schaalprobleem: hoe de gevonden resultaten kunnen worden ‘teruggeprojecteerd’ op de werkelijkheid.

Logische analyse is het verdelen van complexe uitspraken in kleinere om ze te verhelderen. Russell heeft dat verruimd tot een taalanalyse om samengestelde uitspraken tot elementaire uitspraken te ontleden om van elk de geldigheid te kunnen vaststellen.

De Axiomatisch-deductieve methode (AD-m) bestaat uit:

Stap 1) een theorie opvatten als een onsamenhangend geheel van uitspraken, een aggregaat. Door axiomatisering dit aggregaat omvormen tot een axiomatisch-deductief systeem door uitspraken te verdelen in axioma’s (woorden die zelf niet meer deductief logisch kunnen worden bewezen) en overige uitspraken waarvan bewezen moet worden dat ze ook uit de axioma’s kunnen worden afgeleid. Dit zijn de tussentijdse conclusies (lemma) en slotconclusies (theorema).

Stap 2) omzetting in een calculus: de beschrijvende termen zijn vervangen door symbolen en de regels voor het gebruik van de symbolen. Het axioma stelsel hoeft niet evident te zijn maar wel consistent, namelijk: geen logische tegenspraak, geen axioma voor het bewijzen van het theorema mag ontbreken (volledigheid), de redenering zelf moet uit logisch geldige argumenten bestaan (zindelijk). Als hieraan is voldaan dan is het AD-m systeem ‘logisch adequaat’.

Stap 3) de betekenis van een wiskundig theorema moet worden geinterpreteerd: de betekenis in economische zin moet worden begrepen.

Bij het uitvoeren van een onderzoek zijn deze keuzemomenten van belang:

Keuzemoment 1: het zien van een probleem. In de economie is het coordinatieprobleem bijv. al eeuwenlang het belangrijkst: hoe kunnen de plannen van individuen die op eigen voordeel uit zijn en die via vrijwillige ruil met elkaar in contact staan toch een overeenstemming bereiken?

Bij keuzemoment 1: Realisme (economische theorie is een afspiegeling van het proces zoals dat in feite toegaat) versus idealisme (voorstelling van het beste van alle werelden) versus constructivisme (de werkelijkheid wordt steeds opgebouwd uit kennisstructuren van het systeem, die wij opbouwen door open te staan voor ervaringsgegevens).

Keuzemoment 2: welke probleemstelling verdient de onderzoeksprioriteit? De kunst van het ontdekken (heuristiek) betekent dat de onderzoeker zich realiseert wat de oplossing bijdraagt en niet blind een bepaald onderzoeksgebied uitbouwt.

Bij Keuzemoment 2: Individualisme (economische verschijnselen moeten worden opgebouwd uit individuele keuzes, besissingen en gedrag gegeven de natuurlijke omstandigheden) versus holisme (individueel gedrag moet worden verklaard uit de omstandigheden en het geheel waarvan het individu deel uitmaakt (=holos), bijvoorbeeld alle instituties, stelsel, historische ontwikkelingen.

De laatste is onder te verdelen in sociaal functionalisme de individuele rol wordt bepaald door de functie in het geheel) en sociaal evolutionisme (sociale veranderingen volgen een vast patroon bijv. revolutie theorie van Marx, 5 fasen van Rostow etc).

Bij keuzemoment 2 Deze bovengenoemde tegenstelling in keuzes tussen vrije wilsbeschikking en de situatie hangt af van wat je wilt verklaren: het geheel uit de delen of de delen uit het geheel. Deze tegenstelling kan worden overbrugd met het begrip ‘situatie’ in methodologisch situationalisme [Knorr-Cetina, K. and Cicourel, A.V.. . The micro-sociological challenge of macro-sociology: towards a reconstruction of social theory and methodology . 1981 . Advances in social theory and methodology . Boston . Pp 1-47]. 1

Tot zover ‘weten waarom’.

Keuzemoment 3: welk wetenschapssysteem: de gangbare onderzoeksrichting of een andere volgen? De aantallen alternatieven zijn dan groot: als het geen eik is dan kan het van alles zijn.

Keuzemoment 4: zijn de vooronderstellingen aanvaardbaar? Dit is niet hetzelfde als de veronderstellingen, de aannames. Vooronderstellingen zijn de aannames over het kader van het onderzoek zelf. Dit is vooral causaliteit: traditioneel keten van gebeurtenissen die leidt naar de eerste beweger. Nieuwe causaliteit is een eigenschap die aan een model wordt toegevoegd en kan verschillende vormen hebben zoals statistisch of sequentieel.

Tot hier ‘weten dat’

Een model definieert een systeem, een hypothese is een voorlopige aanspraak, een theorie is een hypothese waarvan de onderzoeker de overtuiging heeft dat die geldig is. Volgens het standaardmodel moet een theorie empirisch bevestigd worden. Een algemene theorie (een economische kringloop) kan niet empirisch worden getoetst: eerst een specifiek model opstellen (de nederlandse economie in jaar x = een toegepast model).

Keuzemoment 5: is de gevolgde methodologie aanvaardbaar? Dit is weten hoe. Wetenschap streeft naar algemeen geldige kennis: universeel geldig (voor alles) en objectief (voor iedereen). Objectiviteit wordt methodisch tot stand gebracht.

Bij Keuzemoment 5: Monisme (1 methode superieur voor alle vakgebieden) versus pluralisme (meerdere methoden voor verschillende vakgebieden mogelijk).


Positieve economie = realisme, individualisme en monisme.

Instrumentalisme (Friedman) = postieve economie minus realisme, theorie beoordelen op voorspellend succes. Pragmatisme maar niet blijvend, whatever works om de theorie te vinden, niet om een permanent lapmiddel te vinden van het pragmatisme.

Analytische school: de economische wetenschap is een manier van denken: Keynes: methode om door bemiddeling van modellen correcte conclusies te trekken over de gang van zaken in een bepaalde situatie; ze hebben betekenis in relatie tot een actief subject dat doeleinden heeft en beslissingen kan nemen (agency). Het gaat hier om het aanpassen van de omgeving aan de mens, kennen is beslissen: als x en y dan z, x en y, z. Doe x en y opdat z!

Oostenrijkse school: indidualisme, dualisme, wijsgerig idealisme (wetenschappelijk kennen prevaleert boven de ervaring).

Von Mises: radicaal subjectivisme (our own mental activity is the only unquestionable fact of our experience: knowledge is merely subjective and that there is no external or objective truth), dualisme, praxeologie (handeling als causaliteit: handeling in verschillende condities, bij x condities y handeling).

Popper-Hayek programma [Boland, L.A. . 1982 . The foundations of Economic Method . London . p. 178]:

1) Mensen leren van hun ervaring: Poppers opvatting dat alle kennis feilbaar is en wetenschappelijke kennis weerlegbaar – Poppers opvatting dat actoren in hun hoofd niet iets kunnen doen dat logisch niet kan – Hayeks opvatting dat elke actor steeds rationeel handelt gegeven kennis van de situatie – Hayeks opvatting dat behalve veranderingen in de situatie ook leereffecten van de actor bepalend zijn voor zijn doen en laten.

2) Van gedragsverklaring naar handelingsverklaring: Popper probeert dualisme te overwinnen, namelijk een waarheid voor de natuur en iets anders voor de mens. De essentie van die brug is dat gedrag dat bijv. een amoebe vertoont iets anders is dan handelen dat een mens vertoont: het verschil is overleg. Dat kan niet met natuurwetten worden verklaard, omdat daar het overleg en de rationaliteit (precies het verschil tussen de beide wetenschappelijke benaderingen) niet in is inbegrepen.

Toegepaste economie is het aanwenden van kennis of methoden met een bepaald doel, zoals:

1) beschrijven hoe het echt gaat, 2) verklaren waarom het zo gaat, 3) begrijpen hoe het gaat vergeleken met een norm 4) veranderen of ingrijpen van hoe het nu gaat naar een gewenste gang van zaken. Bij 1) en 2) betreft het de specificatie van een concreet geval uit een algemene regel. 3) en 4) betreft het begrijpen van een feitelijke situatie als een bijzonder geval van een andere algemene regel.

Verklaren en voorspellen hebben dezelfde logische structuur (symmetrie these van Hempel). Een verklaring moet antwoord geven op de vraag: ‘waarom is dit het geval?’. Een succesvole verklaring bewijst waarom iets zich in de gegevens omstandigheden wel voor moet doen: een bijzonder geval van een algemene regel (of samenstel van regels = theorie). P1 Als (p en q) dan r, P2 (p en q), dus vandaar r. Volgens het deductief nomologisch model van verklaren moet P1 een algemene empirisch bewezen universele theorie zijn en moet P2 feitelijk waar zijn. Het DM-m model kan gebruikt worden met het doel om te verklaren, te voorspellen of te toetsen.

Er is een spanning tussen de veronderstelling van rationele agenten en de dagelijkse ervaring. Daarom stelt Friedman zich op het standpunt dat theorie geen empirische verklaring voor gedrag kan geven. Popper en Marschak stellen voor theorieen als maatlat of referentie te gebruiken om afwijkingen tussen modelgedrag en de wekelijkheid aan te wijzen.

Het voorspellend argument

P1 Als (hypothetische relatie H en geldingscondities A) dan (Implicatie I), hypothetische relatie H, geldingscondities A, Implicatie = voorspellende uitspraak I >>

P1 Als (H & (modelcondities M & conditie dat er geen verstoringen zijn C) dan I >>

P1 Als (H & M & C) dan I

P2 Welnu (M* & C*)

C Dus I*

* is de zwakke plekken, de major heeft de schuld afgeschoven.

Voorspellende uitspraak

Objectief (volgens waarnemingsprotocol), positief (het duidelijk wat is) en kwantitatief (richting van de verandering en de omvang van de verandering), onafhankelijk (de gegevens van de situatiebeschrijving (M* en C*) mogen niet gebruikt zijn voor het model (konijn in de hoed en dan er weer uit).


M* is een model van de werkelijkheid en voorwaarde C bepaalt dat naast de modelfactoren nog andere een rol kunnen spelen voor de voorspelling die buiten beschouwing zijn gelaten. Dit is de belangrijkste twijfel aan de symmetrie these van Hempel betreft voorspellingen in de toekomst, omdat niet zeker is dat er niets meer veranderen zal. Het heden is open, zodat niet alleen de voorspelling van de verklaring verandert maar ook de predictie van de retrodictie. Namelijk een syllogisme bevat een dubbele voorspelling namelijk de theorie in de major en de theorie over de toekomstige situatie in de minor. C* betekent dat alle relevante factoren in het model zijn opgenomen door d eonderzoeker en ook als ze veranderen geen invloed hebben op de voorspelling.


Dit is het probleem van theorie absorptie [Morgenstern 1972]: als een voorspelling bekend wordt dan gaaan mensen daarop reageren en de voorspelling bevestigen (self fulfilling prophecy) of juist ontkennen (self-denying prophecy). De drogreden is de verwarring tussen kennisverwerving en kennistoepassing.

1Karin Knorr-Cetina works on epistemology and social constructionism. A knowledge object is a theoretical concept to describe the emergence of post-social relations in epistemic cultures. Knowledge objects are different from everyday things and are defined as unfolding structures that are non-identical with themselves (also Jyri Engeström). Social constructionism (also social construction of reality, also social concept) is a theory of knowledge in sociology and communication theory that examines the development of jointly constructed understandings of the world that form the basis for shared assumptions about reality. The theory centers on the notions that human beings rationalize their experience by creating models of the social world and share and reify these models through language. A social construct or construction concerns the meaning, notion, or connotation placed on an object or event by a society, and adopted by the inhabitants of that society with respect to how they view or deal with the object or event. In that respect, a social construct as an idea would be widely accepted as natural by the society, but may or may not represent a reality shared by those outside the society, and would be an “invention or artifice of that society.”

A major focus of social constructionism is to uncover the ways in which individuals and groups participate in the construction of their perceived social reality. It involves looking at the ways social phenomena are created, institutionalized, known, and made into tradition by humans. “Social construction” may mean many things to many people. Ian Hacking argues that when something is said to be “socially constructed”, this is shorthand for at least the following two claims:

(0) In the present state of affairs, X is taken for granted; X appears to be inevitable.

(1) X need not have existed, or need not be as it is. X, or X as it is at present, is not determined by the nature of things; it is not inevitable.

Hacking adds that the following claims are also often, though not always, implied by the use of the phrase “social construction”:

(2) X is quite bad as it is.

(3) We would be much better off if X were done away with, or at least radically transformed.

Social constructionism is at the nurture end of the spectrum of the larger nature and nurture debate. Critics have argued that it generally ignores biological influences on behavior or culture, or suggest that they are unimportant to achieve an understanding of human behavior. The view of most psychologists and social scientists is that behavior is a complex outcome of both biological and cultural influences. Other disciplines, such as evolutionary psychology, behavior genetics, behavioral neuroscience, epigenetics, etc., take a nature–nurture interactionism approach to understand behavior or cultural phenomena.


This post contains notes from different sources about micro-economics. The backdrop is that a connection is needed between the economic models that are taught in schools and any new theory under development. Even if it were only to be able to translate from language to the other and to distinguish the conditions from the main issues, however the case may be.

If the bold hypotheses … , that complex systems achieve the edge of chaos internally and collectively, were to generalize to economic systems, our study of the proper marriage of self-organization and selection would enlist Charles Darwin and Adam Smith to tell us who and how we are in the nonequilibrium world we mutually create and transform.‘ [Kauffman, 1993 p. 401]

How does this theory relate to economic subjects? In economic theory technology is an important factor in the development of an economy. Kauffman suggests it is the important pillar of economic development: the existence of goods and services leads to the emergence of new goods and services. And conversely: new goods and services force existing goods and services out. In this way, the economy renews itself [Kauffman, 1993, pp. 395-402]. The question is how an economic structure does control its means of transforming the entry and exit of goods and services. A theory is required that describes how goods and services ‘match’ or ‘fit’ from a technological perspective.

With this model an economy can be simulated as a population of ‘as-if’ goods and services, sourcing from external sources (basic materials), that supply to each other when complementary goods and substitute when substituting goods and that each represent a utility. The equilibrium for this simulated economy can be the production ratio in that economy at a maximum utility for the whole of all present goods and services. That ratio can also be the basis for a measurement of the unit of price in the simulated economy. How does this simulated economy develop?

Introduce variations to existing goods and services through random mutations or permutations to generate new goods. Generate a new economy by introducing this new technology into it. Determine the new equilibrium: at this equilibrium some of the newly introduced goods and services will turn out to be profitable: they will stay. Some will not be profitable and they will disappear. This is of interest for these reasons:

  • Economic growth is modelled with new niches emerging as a consequence of the introduction of new goods and services
  • This kind of system leads to new models for economic take-off. The behavior of an economy depends on the complexity of the grammar, the diversity of the renewable sources, the discount factor as a part of the utility function of the consumer and the prediction horizon of the model. An insufficient level of complexity or of renewable resources leads to stagnation and the system remains subcritical. If too high then the economy can reach a supra critical level.

This class of models depends on past states and on dynamical laws. The process of testing of the newly introduced goods and services in a given generation is the basis on which future generations can build and so it guides the evolution and growth of the system. Because it will usually not be clear a priori how new goods and services are developed from the existing, the concepts of complete markets and rational agents can not be maintained as such: classical theory needs to be adapted.

An important behavioral factor of large complex adaptive systems is that no equilibrium is encountered. The economy (or the markets) is a complex system and so it will not reach an equilibrium. However, it is possible that limited rational agents are capable of encountering the edge of chaos where markets are near equilibrium. On that edge avalanches of change happen, which in the biological sphere leads to extinction and in the economy may lead to disruption.


Whenever we try to explain the behavior of human beings we need to have a framework on which our analysis can be based. In much of economics we use a framework built on the following two simple principles.

The optimization principle: People try to choose the best patterns of consumption that they can afford.

The equilibrium principle: Prices adjust until the amount that people demand of something is equal to the amount that is supplied.

Let us consider these two principles. The first is almost tautological. If people are free to choose their actions, it is reasonable to assume that they try to choose things they want rather than things they don’t want. Of course there are exceptions to this general principle, but they typically lie outside the domain of economic behavior. The second notion is a bit more problematic.The second notion is a bit more problematic. It is at least conceivable that at any given time peoples’ demands and supplies are not compatible, and hence something must be changing. These changes may take a long time to work themselves out, and, even worse, they may induce other changes that might “destabilize” the whole system.

This kind of thing can happen . . . but it usually doesn’t. In the case of apartments, we typically see a fairly stable rental price from month to month. It is this equilibrium price that we are interested in, not in how the market gets to this equilibrium or how it might change over long periods of time. It is worth observing that the definition used for equilibrium may be different in different models. In the case of the simple market we will examine in this chapter, the demand and supply equilibrium idea will be adequate for our needs. But in more general models we will need more general definitions of equilibrium. Typically, equilibrium will require that the economic agents’ actions must be consistent with each other.

One useful criterion for comparing the outcomes of different economic institutions is a concept known as Pareto efficiency or economic efficiency. 1 We start with the following definition: if we can find a way to make some people better off without making anybody else worse off, we have a Pareto improvement. If an allocation allows for a Pareto improvement, it is called Pareto inefficient; if an allocation is such that no Pareto improvements are possible, it is called Pareto efficient.

A Pareto inefficient allocation has the undesirable feature that there is some way to make somebody better off without hurting anyone else. There may be other positive things about the allocation, but the fact that it is Pareto inefficient is certainly one strike against it. If there is a way to make someone better off without hurting anyone else, why not do it?

Let us try to apply this criterion of Pareto efficiency to the outcomes of the various resource allocation devices mentioned above. Let’s start with the market mechanism. It is easy to see that the market mechanism assigns the people with the S highest reservation prices to the inner ring namely, those people who are willing to pay more than the equilibrium price, p ∗ , for their apartments. Thus there are no further gains from trade to be had once the apartments have been rented in a competitive market. The outcome of the competitive market is Pareto efficient. What about the discriminating monopolist? Is that arrangement Pareto efficient? To answer this question, simply observe that the discriminating monopolist assigns apartments to exactly the same people who receive apartments in the competitive market. Under each system everyone who is willing to pay more than p ∗ for an apartment gets an apartment. Thus the discriminating monopolist generates a Pareto efficient outcome as well.

Although both the competitive market and the discriminating monopolist generate Pareto efficient outcomes in the sense that there will be no further trades desired, they can result in quite different distributions of income. Certainly the consumers are much worse off under the discriminating monopolist than under the competitive market, and the landlord(s) are much better off. In general, Pareto efficiency doesn’t have much to say about distribution of the gains from trade. It is only concerned with the efficiency of the trade: whether all of the possible trades have been made.

We will indicate the consumer’s consumption bundle by (x 1 , x 2 ). This is simply a list of two numbers that tells us how much the consumer is choosing to consume of good 1, x 1 , and how much the consumer is choosing to consume of good 2, x 2 . Sometimes it is convenient to denote the consumer’s bundle by a single symbol like X, where X is simply an abbreviation for the list of two numbers (x 1 , x 2 ).

We suppose that we can observe the prices of the two goods, (p 1 , p 2 ), and the amount of money the consumer has to spend, m. Then the budget constraint of the consumer can be written as

p 1 x 1+ p 2 x 2 ≤ m. (2.1)

Here p 1 x 1 is the amount of money the consumer is spending on good 1, and p 2 x 2 is the amount of money the consumer is spending on good 2.

p1 x1 + x2 ≤ m.

This expression simply says that the amount of money spent on good 1, p1 x1 , plus the amount of money spent on all other goods, x2 , must be no more than the total amount of money the consumer has to spend, m. equation (2.2) is just a special case of the formula given in equation (2.1), with

p 2 = 1

p 1 x 1 + p 2 x 2 = m


p 1 (x 1 + Δx 1 ) + p 2 (x 2 + Δx 2 ) = m.

Subtracting the first equation from the second gives

p 1 Δx 1 + p 2 Δx 2 = 0.

This says that the total value of the change in her consumption must be zero. Solving for Δx 2 /Δx 1 , the rate at which good 2 can be substituted for good 1 while still satisfying the budget constraint, gives

Δx 2 /Δx 1 = -p1/p2

This is just the slope of the budget line. The negative sign is there since Δx 1 and Δx 2 must always have opposite signs. If you consume more of good 1, you have to consume less of good 2 and vice versa if you continue to satisfy the budget constraint. Economists sometimes say that the slope of the budget line measures the opportunity cost of consuming good 1.

Consumer Preferences

We will suppose that given any two consumption bundles, (x 1 , x 2 ) and (y 1 , y 2 ), the consumer can rank them as to their desirability. That is, the consumer can determine that one of the consumption bundles is strictly better than the other, or decide that she is indifferent between the two bundles. We will use the symbol to mean that one bundle is strictly preferred to another, so that (x 1 , x 2 ) (y 1 , y 2 ) should be interpreted as saying that the consumer strictly prefers (x 1 , x 2 ) to (y 1 , y 2 ), in the sense that she definitely wants the x-bundle rather than the y-bundle. This preference relation is meant to be an operational notion. If the consumer prefers one bundle to another, it means that he or she would choose one over the other, given the opportunity. Thus the idea of preference is based on the consumer’s behavior. In order to tell whether one bundle is preferred to another, we see how the consumer behaves in choice situations involving the two bundles. If she always chooses (x 1 , x 2 ) when (y 1 , y 2 ) is available, then it is natural to say that this consumer prefers (x 1 , x 2 ) to (y 1 , y 2 ).

If the consumer is indifferent between two bundles of goods, we use the symbol ∼ and write

(x 1 , x 2 ) ∼ (y 1 , y 2 ). Indifference means that the consumer would be just as satisfied, according to her own preferences, consuming the bundle (x 1 , x 2 ) as she would be consuming the other bundle, (y 1 , y 2 ).

If the consumer prefers or is indifferent between the two bundles we say that she weakly prefers (x 1 , x 2 ) to (y 1 , y 2 ) and write (x 1 , x 2 ) (y 1 , y 2 ). These relations of strict preference, weak preference, and indifference are not independent concepts; the relations are themselves related! Indifference curves are a way to describe preferences. Nearly any “reasonable” preferences that you can think of can be depicted by indifference curves. The trick is to learn what kinds of preferences give rise to what shapes of indifference curves.

well-behaved indifference curves

First we will typically assume that more is better, that is, that we are talking about goods, not bads. More precisely, if (x 1 , x 2 ) is a bundle of goods and (y 1 , y 2 ) is a bundle of goods with at least as much of both goods (x 1 , x 2 ). This assumption is sometimes and more of one, then (y 1 , y 2 ) called monotonicity of preferences. As we suggested in our discussion of satiation, more is better would probably only hold up to a point. Thus the assumption of monotonicity is saying only that we are going to examine situations before that point is reached—before any satiation sets in—while more still is better. Economics would not be a very interesting subject in a world where everyone was satiated in their consumption of every good.

What does monotonicity imply about the shape of indifference curves? It implies that they have a egative slope. That is, if the consumer gives up Δx 1 units of good 1, he can get EΔx 1 units of good 2 in exchange. Or, conversely, if he gives up Δx 2 units of good 2, he can get Δx 2 /E units of good 1. Geometrically, we are offering the consumer an opportunity to move to any point along a line with slope −E that passes through (x 1 , x 2 ), as depicted in Figure 3.12. Moving up and to the left from (x 1 , x 2 ) involves exchanging good 1 for good 2, and moving down and to the right involves exchanging good 2 for good 1. In either movement, the exchange rate is E. Since exchange always involves giving up one good in exchange for another, the exchange rate E corresponds to a slope of −E.

If good 2 represents the consumption of “all other goods,” and it is measured in dollars that you can spend on other goods, then the marginal- willingness-to-pay interpretation is very natural. The marginal rate of substitution of good 2 for good 1 is how many dollars you would just be willing to give up spending on other goods in order to consume a little bit more of good 1. Thus the MRS measures the marginal willingness to give up dollars in order to consume a small amount more of good 1. But giving up those dollars is just like paying dollars in order to consume a little more of good 1.

Originally, preferences were defined in terms of utility: to say a bundle (x 1 , x 2 ) was preferred to a bundle (y 1 , y 2 ) meant that the x-bundle had a higher utility than the y-bundle. But now we tend to think of things the other way around. The preferences of the consumer are the fundamental description useful for analyzing choice, and utility is simply a way of describing preferences. A utility function is a way of assigning a number to every possible consumption bundle such that more-preferred bundles get assigned larger numbers than less-preferred bundles. That is, a bundle

(x 1 , x 2 ) is preferred to a bundle (y 1 , y 2 ) if and only if the utility of (x 1 , x 2 ) is larger than the utility of (y 1 , y 2 ): in symbols, (x 1 , x 2 ) (y 1 , y 2 ) if and only if u(x 1 , x 2 ) > u(y 1 , y 2 ). The only property of a utility assignment that is important is how it orders the bundles of goods. This is ordinal utility.

We summarize this discussion by stating the following principle: a monotonic transformation of a utility function is a utility function that represents the same preferences as the original utility function. Geometrically, a utility function is a way to label indifference curves. Since every bundle on an indifference curve must have the same utility, a utility function is a way of assigning numbers to the different indifference curves in a way that higher indifference curves get assigned larger numbers. Seen from this point of view a monotonic transformation is just a relabeling of indifference curves. As long as indifference curves containing more-preferred bundles get a larger label than indifference curves containing less-preferred bundles, the labeling will represent the same preferences.

Consider a consumer who is consuming some bundle of goods, (x 1 , x 2 ). How does this consumer’s utility change as we give him or her a little more of good 1? This rate of change is called the marginal utility with respect to good 1. We write it as M U 1 and think of it as being a ratio, MU1 = ΔU /Δx 1 = ( u(x 1 + Δx 1 , x 2 ) − u(x 1 , x 2 ) )/ Δx 1

that measures the rate of change in utility (ΔU ) associated with a small change in the amount of good 1 (Δx 1 ). Note that the amount of good 2 is held fixed in this calculation. This definition implies that to calculate the change in utility associated with a small change in consumption of good 1, we can just multiply the change in consumption by the marginal utility of the good:

ΔU = MU1 Δx 1

The marginal utility with respect to good 2 is defined in a similar manner:

M U 2 = ΔU /Δx 2 = u(x 1 , x 2 + Δx 2 ) − u(x 1 , x 2 ) ) / Δx 2

Note that when we compute the marginal utility with respect to good 2 we keep the amount of good 1 constant. We can calculate the change in utility associated with a change in the consumption of good 2 by the formula ΔU = MU2 Δx2 .

It is important to realize that the magnitude of marginal utility depends on the magnitude of utility. Thus it depends on the particular way that we choose to measure utility. If we multiplied utility by 2, then marginal utility would also be multiplied by 2. We would still have a perfectly valid utility function in that it would represent the same preferences, but it would just be scaled differently.

Solving for the slope of the indifference curve we have

MRS = MU1 / MU2 = – Δx2 / Δx1 (4.1)

(Note that we have 2 over 1 on the left-hand side of the equation and 1 over 2 on the right-hand side. Don’t get confused!).

The algebraic sign of the MRS is negative: if you get more of good 1 you have to get less of good 2 in order to keep the same level of utility. However, it gets very tedious to keep track of that pesky minus sign, so economists often refer to the MRS by its absolute value—that is, as a positive number. We’ll follow this convention as long as no confusion will result. Now here is the interesting thing about the MRS calculation: the MRS can be measured by observing a person’s actual behavior we find that rate of exchange E where he or she is just willing to stay put, as described in Chapter 3. The condition that the MRS must equal the slope of the budget line at an interior optimum is obvious graphically, but what does it mean economically? Recall that one of our interpretations of the MRS is that it is that rate of exchange at which the consumer is just willing to stay put. Well, the market is offering a rate of exchange to the consumer of −p 1 /p 2 —if you give up one unit of good 1, you can buy p 1 /p 2 units of good 2. If the consumer is at a consumption bundle where he or she is willing to stay put, it must be one where the MRS is equal to this rate of exchange:

MRS = − p1 / p2

Another way to think about this is to imagine what would happen if the MRS were different from the price ratio. Suppose, for example, that the MRS is Δx2 / Δx1 = −1/2 and the price ratio is 1/1. Then this means the consumer is just willing to give up 2 units of good 1 in order to get 1 unit of good 2—but the market is willing to exchange them on a one-to-one basis. Thus the consumer would certainly be willing to give up some of good 1 in order to purchase a little more of good 2. Whenever the MRS is different from the price ratio, the consumer cannot be at his or her optimal choice.

Revealed preferences

In Chapter 6 we saw how we can use information about the consumer’s preferences and budget constraint to determine his or her demand. In this chapter we reverse this process and show how we can use information about the consumer’s demand to discover information about his or her preferences. Up until now, we were thinking about what preferences could tell us about people’s behavior. But in real life, preferences are not directly observable: we have to discover people’s preferences from observing their behavior. In this chapter we’ll develop some tools to do this. When we talk of determining people’s preferences from observing their behavior, we have to assume that the preferences will remain unchanged while we observe the behavior. Over very long time spans, this is not very reasonable. But for the monthly or quarterly time spans that economists usually deal with, it seems unlikely that a particular consumer’s tastes would change radically. Thus we will adopt a maintained hypothesis that the consumer’s preferences are stable over the time period for which we observe his or her choice behavior.


I have had several occasions to ask founders and participants in innovative start-ups a question: “To what extent will the outcome of your effort depend on what you do in your firm?” This is evidently an easy question; the answer comes quickly and in my small sample it has never been less than 80%. Even when they are not sure they will succeed, these bold people think their fate is almost entirely in their own hands. They are surely wrong: the outcome of a start-up depends as much on the achievements of its competitors and on changes in the market as on their own efforts‘ [Kahneman, 2011, p. 261]

Competition neglect – excess entry – optimistic martyrs / micro economics modeling

WYSIATI – what you see is all there is. The inclination of people to react to what is immediately at hand, observable, while neglecting any other information available requiring slightly more effort. Inward looking. Basis for micro-economic model?

Utility theory as p/ Bernouilli (wealth > utilty) is flawed because 1) reference point for initial wealth and change in wealth. Utility theory is also the basis for most of economic theory, p. 274-76. Harry Markowitz suggests to use changes of wealth instead p. 278.

Coordination of Economic Decisions

Douma, S. and Schreuder, H. . Economic Approaches to Organizations . United Kingdodom : Pearson . 20013 . ISBN 978-0-273-73529-8

The subject of this book is the  coordination of economic decisions. The (categories of) mechanisms for that job are markets and organizations. A special class of organizations is of course the firm. And so this summary of the above book is included as a connection of a new theory of the firm under construction with existing economic theories.

Chapter 1: Markets and Organizations

Economic systems can be segmented by their property rights regime for the means of production and by their dominant resource allocation mechanism1. The coordination problem is the question how information is obtained and used in economic decision-making, namely decisions where demand and supply meet. The book contributes to the answering of the coordination problem in economics: why are economic decisions coordinated by markets and by organizations and why do these systems for that job co-exist?

An economic problem is any situation where needs are not met as a result of scarcity of resources. Knowing this, then what is the optimal allocation of the available resources over the alternative uses? If resources are allocated optimally, they are used efficiently (with efficiency).

Economic approaches to organisations can be fruitful if the allocation of scarce resources are taken into account. To this end consider this conceptual framework (figure 1.1): division of labour (1) >> specialization (2) >> coordination (3) >> markets (4) AND organization (5) << information (6) << pressure from environment and selection (7)

1) division of labour as per Adam Smith: splitting of composite tasks into their components leads to increased productivity (this is taken as a fact of life in our kind of (western) society), because:

2) specialisation (Adam Smith: greater dexterity, saving of time to switch between jobs, tools) enables to do the same work with less labour: economies of specialisation. This higher performace comes at a cost to get acquainted with a new task. Higher performance but less choice: trade-off between satisfaction of higher performance and lower satisfaction because of limited choice and boredom

3) coordination: hardly anyone is self-reliant and exchange must take place between specialists to get the products needed and not self-made. The right to use them is transferred: a transaction takes place. This need to be reciprocal. Specialisation leads to a need for coordination, namely the allocation of scarce resources. There are 2 types of coordination: transactions across markets or within organizations.

4) and 5) markets and organizations: for example the stock market: no individual finds another to discuss allocation, but the price system is the coordinating device taking care of allocation. The price is a sufficient statistic (Hayek 1945) for the transaction. Optimal allocation occurs when prices meet at their equilibrium without parties needing to meet or to exchange more information than the price alone. Why is not all exchange via markets? Because if a workperson goes from dept x to dept y then the reason is not a change of relative prices but because he is told to do it (Coase 1937). A firm is essentially a device for creating long term contracts when short term contracts are too bothersome. They do not continue to grow forever, because as they grow, firms tend to accumulate their transaction cost as well; and so over time the tyransactio cost of the firm will offset those of the market. Transactions will shift between markets and organizations as a function of the transaction cost involved in either choice of alternative. Williamson (1975) has expounded this element to be adressed in Ch8 to include the marginal cost of either alternative. The balance between markets and hierarchies is constantly ‘sought after’ and when it is struck then the entrepreneur may decide to change its transaction cost by forming firms or increasing their size up to the point that its transaction cost becomes too high. Ideal markets are characterized by ‘their’ prices being sufficient statistics for individual economic decision making. Ideal organizations are characterized if their transactions are not based on prices to communicate informatiion between parties. Many transactions in reality are governed by hybrid forms of coordination.

6) Information: the eminent form of coordination is a result of the information requirements in that specific sitution. And so information is the crucial element in the model, producing the coordination mechanism. There are many situations where the price alone cannot provide sufficient information to effect a transaction – up to the point where price alone is entirely incapable of the transaction. Organization thus arises as a solution to information problems.

7) the environment and institutions are the environment in which the trade-offs between market and organization take place and they are economic, political, social cultural, institutional, etc in nature. The environment provides the conditions for the creation of both, shapes both and selects both. Institutions are the rules that shape human interaction in a society (a subset of MEMES with a regulatory character or just the entirety of the memes or the memes that are motivators); they are an important element in the environment of organizations and markets. Douglass North (1990, 2005b?). ‘In the absence of the essential safeguards, impersonal exchange does not exist, except in cases where strong ethnic or religious ties make reputation a viable underpinning‘ [Douglass North 2005b p. 27 in Schreuder and Douma p. 18]. Not agreed: evolution of morale.

If the institutions are the rules of the game imposed by the environment, ‘the way the game is played’ is shaped by the countries’ institutional framework – all institutions composing the environment of organizations and markets. These factors detemine which organizations and markets are allowed and if they do then they shape the way they function. These factors are dynamic.

This approach is fairly new because economists viewed coordination by the market between organizations and organizational scientists viewed coordination inside organizations.

Chapter 2 Markets

Standard micro-economic theory focuses on how economic decisions are coordinated by the market mechanism. Consumers decide on how much to consume, producers decide on how much to produce, they meet on the market and there quantity and price are coordinated.

Law of demand: the lower the price the higher the demand. Law of supply: the lower the price the lower the supply. Market equilibrium occurs where demand and supply intersect.

Theory of demand: goods are combined in baskets, each person can rank the goods in a basket for preference, the preferences are assumed to be transitive, each person prefers to have more of a certain good than less of it. Indifference curves represent the preferences of the person. If two baskets are on different locations on the same indifference curve (he is indifferent), then the utility of the two baskets is said to be the same (because the person’s satisfaction is the same for either). It iss assumed that the consumer knows which basket she prefers, but not by how much. The budget line indicates the person’s budget: if this line is combined with the indifference curve, the maximum utility is located on the tangential of the indifference curve with the budget line (there can be only one).

Theory of supply: how a supplier decides on how much to produce. The firm is an objective function describing the goals of the firm (profit, share value). The objective function must be maximized given the constraints of the firm’s production function. The production function describes the relation of the inputs of a firm and the maximum outputs given those inputs. Q=Q(K, L, M) is the maximum ouput at some given input. If K and M are given at some time then the output increases if L increases. L cannot be increased indefinitely and either K or M will constrain a further increase of L and thus of Q. To increase K takes most time and can only be executed in the long run only: in the short run (and so at any time) M can be changed, in the medium and the long term term L can be changed. L = variable short and long run, K = variable long run only. The production function represents all the combinations of K (LT; Capital) and L (short term; labour) isoquants that the firm can choose from if it wants to produce quantity Qx.

Profit maximization in competitive markets: assume that a firm wants to maximise profits. Then Profit = Q.p – c.K – w.L. Constraint of the production function Q = Q(K, L). Decide How Much to produce implies to choose Q. Deciding How To produce means choosing K and L. K and L are free, Q is their function. Short run: K is fixed so only L is free to choose. Profit = p.Q(KL)-c.K-w.L; its maximum is dProfit / dL = p.dQ / dL – w = 0 or dQ / dL = w / p. If dQ / dL is the marginal productivity of labour it decreases with increasing use of Labour (yet another unit of labour will decrease the marginal productivity of Labour, dQ / dL is a decreasing function.). The firm can choose how much to produce, not how to produce. Long run: dQ / dK = p. dQ / dK – c = 0. From which follows that dQ / dK = c / p, while (see above) dQ / dL = w / p. Solving both gives optimal values foor L and K and from that follows Q. The firm chooses K so that the marginal productivity of K is c / p while choosing L so that the marginal productivity of L is w / p. The firm can choose how to produce and how much.

Market coordination. Producers maximize profit: via the amount she calculates L in the short term and K and L in the long term. This results in a supply curve for all firms and an industry supply curve. Consumers maximize utility and for any given price he decides the amount he is going to buy, resulting in a demand curve for all consumers. Supply and demand meet at one point only, the intersection of their curves, and the resulting price is a given for consumers and producers. Now every consumer knows how much he will buy and every producer how much she will produce.

The paradox of profits. Normal profit equals the opportunity cost of the equity capital. Economic profit is any profit in excess of normal profit. If profit falls below the normal profits, then the shareholders will invest their capital elsewhere. In a competitive market a firm cannot make an economic profit in the long run, because profit attracts new incumbants, supply increases, prices go down and economic profits vanish. Hence the paradox: each firm tries to make a profit, but no firm can in the long run.

Comments: 1) if competition was perfect then resource allocation was efficient and the world would be pareto optimal. This does not imply that everyone’s wants are satisfied, however, it just means that, given some configuration, an initial distribution of wealth and talents, nobody can be made better off whithout someone else being worse off. 2) assumptions underpinning the assumption of perfect markets are: 2a) large number of small firms, 2b) free entry and exit of firms, 2c) standardization of products. 3) it is assumed that firms are holistic entities in the sense that its decisions are homogeneous, taken as if by one person with profit maximization in mind, given their utility function. 4) firms are assumed to have only one objective such as profit or shareholder value. If there are other then they must be combined into one as a trade-off. 5) it is assumed that there is perfect information: everyone knows everything relevant to their decisions. In reality information is biased: the insured knows more about his risks than the insurance company, the sales person knows more about his activities when travelling then his boss. This is not a sustainable market. 6) consumers and producers are assumed to maximize their profit and utility and so it is assumed that they must be rational decision makers. The decisions may be less solid and more costly the longer the prediction horizon is. 7) markets are assumed to function in isolation, but it is clear that the environment influences the market.

Chapter 3 Organizations

Are ubiquitous. It is impossible for markets alone to coordinate people’s actions. Paradox at the heart of modern economies: it is possible to an increasing extent to work individually doing specialized work but thhis is only possible because of some form of organization and interdependency. While people appear to have more agency, they are more dependent on others’ performance. The central question the is how organizational coordination – as opposed to market coordination – is achieved.

.. the operation of a market costs something and by forming an organization and allowing some of authority (‘an entrepreneur’) to direct the resources, certain marketing costs are saved‘ [Coase 1937 in Schreuder Douma 2013 p 48].

.. the problem of what is the best way of utilizing knowledge initially dispersed among all the people is at least one of the main problems of economic policy – or of designing an efficient economic system. The answer to this question is closely connected with that other question which arises here, that of who is to do the planning. .. whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals‘ [Hayek 1945 in Schreuder and Douma 2013 pp. 48-49].

The best use of dispersed information is indeed one of the main problems in economic coordination.

Mintzberg identified these ways in which work is coordinated in organizations: mutual adjustment, direct supervision, standardization of work process, standardization of output, standardization of skills, standardization of norms. ‘These are thus also the ways in which people in organizations can communicate knowledge and expectations. Conversely, they are the ways in which people in the organization may learn from other what they need to know to carry out their tasks as well as what is expected from them‘ [Schreuder and Douma 2013 p. 51]. In large organizations is it no longer possible to coordinate via the authority mechanism and so combinations of the other mechanisms are used.

Real organizations are hybrids of the above coorinating mechanisms. Some prototypical organizations are dominated by a specific coordinating mechanism: 1) Entrepreneurial Organization – Direct Supervision, 2) Machine O – Stand. of Work Processes, 3) Professional O – Stand. of Skills, 4) Diversified O – Stand. of Outputs, 5) Innovative O – Mutual Adjustment, 6) Missionary O – Stand. of Norms. When markets are replaced by organizations then the market (price) mechanism is replaced by other coordinating mechanisms. Organizations can take many forms depending on the circumstances: it can handle different types of transactions [p 58].

Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, mysellf included, are in a state of shocked disbelief‘ [Alan Greenspan former chairman of the Federal Reserve about the lack of regulation in the financial markets to the House Committee on Oversight and Govenment Reform during a congressional hearing in 2008].

Chapter 4: Information

The information requirements in any situation determine the kind of coordination mechanisms or mix of them. If agents cannot influence the price then the market is perfect and the agents are price-takers; in that case the prices are sufficient statistics conveying all the necessary information to the market parties. Under conditions of perfect markets (namely perfect competition) agents can only decide on the quantity at some price for some homogeneous good (namely no difficulties with the specifications, quality differences). The price mechanism is a sufficient coordination mechanism where the economic entities have a limited need for information. If all the required information can be absorbed in the price can we rely on the market (price) mechanism as the sole coordinating device.

If the specifications vary then more informtion than the price only is necessary. Sugar: commodity product, price suffices. Fruit: some changes with the season, some more info is needed by selecting the individual pieces. Soup: more info is needed, tasting not practical, brand name as a label to inform client of the specifications to expect. A brand name is a solution to an information problem. Uncertainties exist for instance the quality of next year’s fruit: retailers and suppliers may agree on a contingent claims contract (prices depends on the actual quality at that time). In practical terms it is difficult to cover all contingencies.

If client and supplier have different information then information asymmetry exists. Disclosing all information to a client needed to fully understand some solution or product enables the construction of the object by the client himself and destroys its value. This situation can invite opportunistic (or strategic) behavior in agents.

Hidden information means the existing skewness of availability information between the parties, leading the one to take advantage of the other. Hidden action means introduced skewness between the availability of information between parties. Hidden information and hidden action both come from unobservability, they both imply a skewness of information and both occur in both market and organizational environments. Hidden information is an ex-ante problem, while hidden action is an ex-post problem.

If everybody knew everything then all information would be of equal value.

Chapter 5: Game Theory

Coordination game: two or more players coordinate their decisions so as to reach an outcome that is best for all. Example new technology. If both choose the same platform then the customer is not forced to choose between tech AND brands, but brands only. This is an advantage for both. If the choice is to be made simultaneously then the outcome is unpredictable, if the decisions are seqeuential then one player will follow the other player’s choice of tech. As soon as a first player chooses then the choice must be comunicated to the other so as to reap the benefits and not allow the other to deviate.

The entry (monopolist versus incumbant) game: moving from one stage to two stages. This can be solved by looking ahead and reasoning backwards in a decision tree. Commitment in this sense means that a participant altes the pay-offs irreversibly by committing to some course of action so that it it becomes in its own interest to execute a threat. Example: investing in extending a mobile network prior to a new incumbant entering allows the monopolist to execute its threat to lower prices – thereby increasing its number of customers.

Situations involving more than two players in a single stage game: auctions. In both open auctions and closed bid auctions, the observability of information plays a crucial role. At an increasing bid auction the price may not be perfect for the seller as the one-but-the-last potential buyer may drop out at a price far below the cut-off of the last potential buyer. To prevent that, the dutch auction can be used: a decreasing price auction. In this way the seller reclaims some of the difference between the highest and the one-but-the-highest bid. A problem for the seller is that there is no minimum price. To establish a minimum a seller can revert to a two-stage auction: first the increasing price competition where the winner takes some premium, followed by a dutch auction. If the second stage does not result in a price then the winner of the first stage buys the lot. In this game, only the winner’s private information remains private, the others’ are known after the intial round. During the second round the bidder with the highest private valuation is induced to reveal it and the seller is willing to pay a premium to get this information. The premium is hopefully loer than the difference between the highest and the one-but-the highest bid.

Sealed-bid auction: best performance+synergies considering first bid competitor’s prize.

The observability of auctions pertains to the differences in availability of the private information of each of the participants in the auction. The winner’s curse is the question whether the winner was lucky to win or overly optimistic in her predictions. Competitors can collude to keep the price low.

Single stage PD, Iterated PD for many players. IPD with players’ mistakes: show generosity by retaliating to a lesser extent than the defection and show contrition by not re-retaliating if the other retaliates after a mistaken defection. However, too much forgiveness invites exploitation.

In evolutionary game theory strategies evolve over time: variation, selection and retention. In a fixed environment (fixed proportions of strategies) it pays to learn which competitors are exploitable: maximize cooperation with the cooperating strategies and exploit the exploitables. In a dynamic environment the fitter strategies increase their proportions in the population. If more can evolve then they co-evolve.

Chapter 6: Behavioural theory of the firm

In micro-economics the firm is viewed holistically (as a dot with agency), in behavioral theory it is seen as the locus of the coalition of the (groups of) participants of the firm. The starting point is not full but bounded rationality: cognitive and informational limits to rationality exist. Decision processes in the firm are described as step: 1) defining the goals of it2 2) how it forms expectations on which the decision processes are based 3) describe the process of organizational choice.

Each participant receives inducements and makes contributions to the organization. These can have a wide defintion: they are a vector of inducements and contributions. What sets behavioral economics apart from standard micro-economics is that participants are not fully capable to know every alternative; it is in the information they have. For some of the elements of the vector of for instance employees these are even harder to know than regarding the pay; and so on for all participants of the coalition. In standard micro-economics the management is hired by the shareholder and works for them alone. In behavioral economics, management represents the interests of all stakeholders. The competitive environment as per micro-economics is a given, behavioral economics focuses on the decision making processes in the firm.

Step 1 organizational goals: in standard micro economics (SME) one goal is assumed of profit maximization. In behavioral economics it is assumed that every participant has her goals, that between them do not necessarily coincide. The composition and the overall goals of the coalition (the firrm) are arrived at via bargaining: the more unique the expected contribution the better her bargaining position. Each participant demands that the goals reach some individual level of aspiration; if that hurdle is not reached she will leave the coalition. Theoretically in the long term there would be no difference between the levels of achievement in the firm, the levels of achievement of other firms and the level of aspiration of the participants in these respects. The difference between total resources and total payments required to preserve the coalition is the ‘organizational slack’. So in the long run there would be no organizational slack. However, the markets for the various contributions are not perfect because information about it is difficult to obtain and the levels of aspiration change only slowly. In behavioral theory it is assumed that operational subgoals are specified per managerial area; it is however often impossible to define operational goals per area. And so aspirational levels are identified taking into account the effects of the conflicts between areas and so the conlict is quasi-solved instead of completely.

Step 2 organisational expectations: SME assumes information symmetry; in behavioral firm theory this is not the case. The production manager needs the sales manager to makes a forecast. Expectations means to infer a prediction from available information. Members have different information and different inference rules.

Step 3: organizational choice: SME assumes that behavior of firms is adequately described as maximizing behavior: all alternatives are known and they can be compared so as to maximize the objective. Behavioral theory rejects these assumptions: decisions have to be made under limitations. They make decisions on a proposal, without knowing what alternatives turn up the next day. SME assumes that firms search until the marginal cost of additional searching equals the marginal revenue of additional searching. Other firms would take advantage of this because they decide quicker. In reality this is impractical. In behavioral theory alternatives are roughly evaluated based on available information one at a time instead of maximizing their (assumed) objective function and weighted against some aspired level. This process is better described (then maximizing) as satisficing: to search for alternatives that satisfy levels of aspiration and is threfore acceptable. This process is closer to reality because alternatives often present themselves one at a time (is that so?). Also it is quite implausible that the consequences of each alternative can be calculated because people cannot handle all the relevant information: their rationality is bounded. They intend to be rational but only manage to a limited extent. The final argument why firms are rather satisficing than maximizing is that each stakeholder has her objectives and if a firm has no single objective functon, how can it maximze? Alternatives are evaluated against an aspiration level of each stakeholder and if they meet those they are then accepted.

Even the inteded rationality is rather generous when it concerns people. Kahneman and Tversky concluded that people are biased and use simple rules of thumb to decide.

Chapter 7: Agency Theory

This theory stems from the separation of ownership and control and discusses the relation between the entities the principal and the agent, who makes decisions on behalf of (or that affect) the principle (e.g. manager – shareholder). Dialects of the theory are: the positive agency theory (the firm is a nexus of contracts), that attempts to explain why organizations are as they are, and the principal and agent theory (how does the principle design the agent’s reward structure).

There is a stock market for corporate shares and a market for corporate control, entire companies. Here competition between management teams increases the pressure on management performance. Also there is a market for managerial labour: management of a large firm is typically more prestigious than a smaller one. Also there is a market for the firms products: the more competition in those marjets, the less opportunity for the manager to wing it. Lastly the pay package of the manager usually includes a profit or stock related bonus that brings the manager’s interests more in line with the shareholder’s.

Managerial behavior and ownership structure.

Monitoring and bonding.

Entrepreneurial firms (owned and managed by the same person) and team production. The entrepreneur monitors and controls the work of others and gets paid after all the contracts have been fulfilled. If a freelancer puts in n extra effort she enjoys m extra utility working alone. If in a team putting in extra n she enjoys only 1/m additional utility. This results in shirking: when in a team people tend to put in much less effort then when they work alone. Everyone is willing to put in more effort if the others do also. If this can be monitored by the other members of the team then a solution can be for all to agree not to shirk and to punish someone who does. Else it is unobservable , an informational problem. [Minkler 2004]. If shirking can be detected by an independent monitor (and not or with difficulty by the other team members) then if the monitor is paid a fixed pay then the monitor is incentivized to shirk also. If the monitor has a right to the residuals after the contracted cost are fulfilled, then she will have no incentive to shirk. If the monitor is to be effective then she must be able to make changes to the team (revise contracts, hire and fire, change individual payments) without consent of all the other members and sell her right to be the monitor (to justify actions the effect of which is delayed in time). The monitor in this sense is the entrepreneur, the firm is an entrepreneurial firm. This theory assumes the existence of team production and that monitoring reduces the amount of shirking. The latter implies that this is useful if it is more cumbersome for the members to monitor themselves and each other then for an outsider to do it; only in that case is this model viable.

In these two ways 1) consumption on the job and 2) shirking are restricted by managers.

The firm as a nexus for contracts: if 1) and 2) then how to explain the existence of large corporations not (or to a limited extent) owned by their managers. Shareholders in this sense merely have contracted to receive the residual funds: they are security owners. Shareholders are just one party bound by a contract to the firm like many others with their specific individual contracts.

[Fama and Jensen 1983 a, b] explain entrepreneurial and corporations with this ‘nexus of contracts’ model. ‘They see the organization as a nexus of contracts, written and unwritten, between owners of factors of production and customers‘ [Schreuder and Douma 2013 p151].

The residual payment is the difference between the stochastic cash inflow and the contracted cash outflow, usually fixed amounts. The residual risk is the risk of this diffrence, borne by the residual claimants or risk bearers. The most important contracts determine the nature of the residual payments and the sttructuring of the steps in the decision process of the agents: initiation (decision management), ratification (decision control), implementation (decision management), monitoring (decision control) of proposals. Fama and Jensen distinguish between non-complex and complex organizations: non-complex are the organizations where decisions are concentrated in one or a few agents, complex ini more than a few (small and large organizations respectively). If a small firm is acquired by a larger one, then the decision control transfers from the management of the smaller to the larger while decision management stays with the management of the smaller firm. As the management of the smaller firm is no longer the ultimate risk bearer nor the receiver of the residual payments, this confirms the theory.

Theory of principal and agent

In this theory risk and private information are introduced in the relation between agent and principal. Conditions concerning these issues in the previous versions of the agency theory are relaxed here. If the performance of the firm depends on the weather (random) and the performance of the agent, then: situation 1) the principal has information about the agent’s performance, 2) the agent has no information about the agent, 3) the agent has no direct information about the agent’s performance but has other signals.

These models are single-period and single-relation and therefore not realistic, because agents are usually employed for more than one period. Also if more than agent is employed often in circumstances that are not exactly the same and therefore the relation is different. Monitoring is costly and so the question remains how and how much to monitor. The model is based on monetary criteria only and that is not reality.

Chapter 8: Transaction Cost Economics

The fundamental unit of analysis is a transaction. Whether a transaction is allocated to a market or a firm is a cost minimization issue. Schreuder and Douma argue that to assume tht cost in a firm are lower than cost outside of it is a tautology, becaue: ‘If there is a firm then, apparently, the costs of internal coordination are lower than the cost of market transactions‘ [Douma and Schreuder 2013 p167]. But boundaries can emerge for other reasons than costs alone and, contary to what they claim, this can be empirically tested in a ‘make or buy comparison’. Transaction cost economics as per Williamson is based on bounded rationality and on opportunism. Bounded rationality means that the capacity of humans to formulate and solve problems is limited: it is ‘intendedly rational but only limitedly so‘ [Simon, H.A. . Administrative Behavior (2nd edition) . New York . MacMillan . 1961 and Organizations and Markets . Journal of Economic Perspectives / vol. 5 (2) pp 25-44 . 1991]. Bounded rationality will pose problems when the environment is uncertain or complex. Opportunism is defined as ‘self-interest seeking with a guile’ and as making ‘self-disbelieved statements’. Opportunistic means to try to exploit a situation to your own advantage in some cases by some people. It is difficult and costly to ex-ante find out who will do this and in which cases. Opportunistic behavior can occur ex-ante (not telling the buyer of a defect prior to the transactio) and ex-post (backing out of a purchase). This problem can occur when trading numbers are small and if the numbers are large but reputations are unimportant or information about reputations is unavailable.

Whether a transaction is governed by the market or by an organization (the mode) is governed by the sum of the production cost and the transaction cost and by the atmosphere. The atmosphere is the local environment where the transaction takes place itself giving satisfaction (for example to work as a freelancer or be an employee of some organization). This acknowledges the fact that economic exchange is embedded in an environmental and institutional context with formal and informal ‘rules of the game’ (as per chapter 1); ‘the informal rules of the game are norms of behaviour, conventions and internally imposed rules of conduct, such as those of a company culture. this can be related to the informal organization. ., he acknowledges the importance of such informal rules, but admits that both the concepts of informal organization and the economics of atmosphere remain relatively underdeveloped’ [Williamson 1998, 2007 in Douma and Schreuder 2013 p. 174].

The fundamental transformation means that lock-in occurs after a supplier has fulfilled a contract during some time and has learned how to manufacture efficiently. This lock-in is effectively a monopoly in a many supplier situation.

Critical dimension of a transactions: 1) Asset specificity (asset required for one transaction only) resulting in the availability of quasi-rent (everything above the variable cost) that the buyer will want to appropriate. Solution: merger or long-term contract includes inspection of the buyer’s business by the seller. 2) Uncertainty / complexity 3) Frequency. If 1), 2) and 3) are high then the transaction is likely to be executed within an organization in the long run. If the cost of transacting under the different modes differ then the more efficient mode will prevail. This leads to competition between organizational forrms and the one that turns out to be most efficient prevails in the long term.

A peer group is a group of people together without hierarchy. The coordinating mechanism is mutual adjustment. Advantages are: 1) economies of scale regarding specific assets 2) risk-bearing advantages 3) associational gains (atmospherical elements like higher effort, inspiration, quality). Disadvantages are shirking and so even in peer groups some form of hierarchy emerges (senior partners).

A simple hierarchy is a group of workers with a boss. The advantages are: 1) team production (monitoring according to Alchian and Demsetz (1972), separation of technical areas according to Williamson (1975), this is rare). 2) Economies of communciation and of decision making (in a simple hierchy the connections are n-1, in a peer group the number of connections is 1/2n(n-1): the cost of communicating is much higher in a peer group),re decision making takes less effort and less cost also as a consequence). 3) Monitoring (to prevent shirking in a peer group).

Multistage hierarchies: U form enterprises are functional hierarchies. They suffer from cumulative control loss and corruption of the strategic decisionmaking process. M-form enterprises are a solution for those problems: divided at top level into several semi-autonomous operating divisions along product lines. Top management is assisted by a general office (corporate staff). Advantages: 1) responsibility is assigned to division management cum staff 2) the corporate staff have auditing and advisory role so as to increase control 3) the gereal office is concerned with stratefgic decision including staffing 4) separation of general office from operations allows their executives to not absorb themselves to operational detail. A third is the H-form, a holding with divisions, the general office is reduced to the shareholder representative.

Concerning coordination mechanisms other than markets and organisations: markets coordinate via price mechanisms, organizations via the 6 mechanisms defined earlier. Namely: mutual adjustment, direct supervision, standardization of work process, standardization of output, standardization of skills, standardization of norms. Often the organizational form is a hybrid of some of the ‘pure’ configurations. In addition the markets are usually to some extent organized and organizations can have markets of all kinds inside of them.

Williamson’s transaction cost economics is also called the markets and hierarchies paradigm: markets are replaced with organizations when the price coordination breaks down3. Comments on the paradignm are that: 1) people are not that opportunistic: they can and do trust each other, 2) markets and organizations are not mutually exclusive coordination mechanisms but they should be viewed as a continuum.

Ouchi introduced clans as an intermediate form between markets and organizations as markets, bureaucracies (later hierarchies) and clans [Ouchi 1980, Ouchi and Williamson 1981]. Clans are a third way of coordinating economic transactions. The replacement of bureaucracies for hierarchies was standard form in organizational sociology [Max Weber 1925, translation by A.M. Henderson and T. Parsons . The Theory of Social and Economic Organization . New York: Free Press . 1947]: personal authority is replaced with organizational authority. Modern organizations now had the legitimacy to substitute personal rules for organizational rules, described by Weber as bureaucracies. Ouchi argues that in those bureaucracies prices are replaced with rules. And the rules contain the information required for coordination. The essence therefore of this type of coordination is not its hierarchic but its bureaucratic nature.

The third way of coordinating transactions is a clan. The clan relies on the socialization of individuals ensuring they have common values and beliefs: individuals who have been socialized in the same way have common norms for behavior. The norms can also contain the information necessary for transactions. This is clarified by an axamples of Japanese firms, where workers are socialized so as t adopt the company goals as their own and compensating them for non-performance criteria such as length of service. Their natural inclination as a result of socialization is to do what is best for the firm. Douma and Schreuder argue that Ouchi’s emphasis on rules does not cover the entire richness of observed organizations and it is subsumed by Mintzberg’s typology in 6.

The role of trust: the position of Williamson is that you cannot know ex ante whom to trust because some people cheat some of the time. If you like your business partner and you know that she trusts you, you are less likely to cheat on her, even if that would result in some gain: trust is an important issue. If the trust is mutual you can develop a long-term business relationship. Trust is important between and within organizations. If, in general, people are treated in good faith then they are more likely to act in good faith also. But as Williamson argues, you cannot always ex-ante be sure about the stranger and you might be needing to prepare for an interaction.

Chapter 9: Economic Contributions to Business/Competitive Stategy

Economic contributions to strategy planning and management are mainly related to content, not process: the focus is on the information that firms need to make their choices.

Move and counter-move: In 5.3 commitment was introduced as a way to change the pay-off in a game setting. The example concerned the investment in a network by National, the existing cellphone provider. ‘Commitments are essential to management. They are the means by which a company secures the resourcces necessary for its survival. Investors, customers and employees would likely shun any company the management of which refused to commit publicly to a strategy and back its intentions with investment. Commitments are more than just necessities, however. Used wisely (?), they can be powerful tools that help a company to beat the competition. Pre-emptive investments in production capacity or brand recognition can deter potential rivals from entering a market, while heavy investments in durable, specialized and illiquid resources can be difficult for other companies to replicate quickly. Sometimes, just the signal sent by a major commitment can freeze copetitors in their tracks. When Microsoft announces a coming product launch, for instance, would-be rivals rethink their plans‘ [Sull, D.N. . Managing by Commitments . Harvard Business Review, June 2003 pp. 82-91 in Douma and Schreuder 2013 pp. 223-4].

Memeplex > Belief + Environment > Predicting* / Planning* > Committing* > Execution = Acting as Planned, * means anticipating the future. Compare to: ‘Each single business firm and each business unit in a multibusiness firm needs to have a competitive strategy that specifies how that business intends to compete in its given industry‘ [Douma and Schreuder 2013 p. 228].

Chapter 10: Economic Contributions to Corporate Strategy

In a multibusiness firm some transactions are taken out of the market and internalized within the firm: capital market, management market, market for advise. Also some transactions between the individual businesses are taken out of the market and internalized, such as components, know-how. The question is whether this approach is more efficient than the pure market approach, namely is value created or destroyed. Parenting advantages poses 2 alternative questions: 1) decide whether corporate HQ adds value. Yes if it is cheaper than the market. 2) Can another HQ add more value to one of the business units. Yes if another parent cannot add more value to the BU. This is related to the market of corporate control earlier discussed.

Value adding activities of HQ are: 1) Attract capital and allocate to business units 2) appoint, evaluate abd reward business unit managers 3) offer advice 4) provide functions and services 5) portfolio management by making adjustments to the business units.

In a mature market economy it is harder for an organization to surpass the coordinating capacity of the market. In a less developed economy this threshold is easier to meet and organizatrional coordination is more favourable than market coordination. Organizational relatedness of business units A and B sharing the same HQ can take different shapes: 1) vertical integration (A supplying B) 2) horizontally related (A and B are in the same industry) 3) related diversification (A and B share same technology or same type of customer) 4) unrelated diversification (A and B share nothing). Portofolio management means management of the business units.

Chapter 11: Evolutionary Approaches to Organizations

The perspective is on the development of organizational forms over time: from static to dynamic. The anaysis is about populations of organizational forms, not the individual organization but the ‘species’. Organizations are human constructs: ‘.. organizations can lead a life of their own, to continue the biological analogy – but the element of purposive human behaviour and rational construction is always there‘ [Scott, W.R. . Organizations: Rational, Natural and Open Systems (5th edition) . Englewood Cliffs . NJ: Prentice Hall . 2003]. Thus the creationist view is likely to have more implications for the organizational view than for the biological view. The meaning of the term construct goes beyond the design of something, and includes a product of human mental activity. It might be said that organizations are more constructionist / constructional than giraffes. ‘Organizations are much less ‘out there’: we have first to construct them in our minds before we find them. This delicate philosophical point has important consequences. One of those consequences is that it is harder to agree on the delineation of organizations than of biological species. Another consequence is that it is much less clear what exactly is being ‘selected’, reproduced’ in the next generations and so on‘ [Schreuder and Douma 2013 p 261].

Similarities between the organizational and the biological view evolve from the assumptions that 1) organizations have environments and 2) environments play a role in the explanation of the development of organizational forms. As a result the development of organizational forms instead of individual forms can be studied and additionally the concept of environment is broadened to anything that allows for selective processes. As a reminder: selection on certain forms of organization is now replacing adaptation of individual firms to their environment. ‘So, there is no question that selection, birth and death, replacement and other such phenomena are important objects of orgnizational study as well‘ [Douma and Schreuder 2013 p. 262].

Ecologists study the behavior of populations of beings: what is the defintiion of a population in organizational science and what is the procedure for the distinction of one population of organizational forms from another. Organizational ecology distinguishes three levels of complexity: 1) demography of organizations (changes in populations of organizations such as mortality) 2) population ecology (concerning the links between vital rates between populations of organizations) 3) community ecology of organizations (how the links within and between populations affect the chances of persistence of the community (=population of firms or society?) as a whole). 1) has received the most attention, 2) and 3) not so much.

The definition of a species is interbreeding: its genotype, the genepool. According to Douma and Schreuder there is no equivalent for organizations. This can be solved using the concept of memes identifying the general rules that are adopted by participants in this kind of organization, DPB.

An organizational form is defined as the core properties that make a set of organizations ecologically similar. An organizational population is a set of organizations with some specific organizational form. [Caroll and Hannan in 1995 in Douma and Schreuder 2013 p264]. An assumption is the relative inertia of organizations: they are slow to respond to changes in their environment and they are hard-pressed to implement radical change should this be required. As a consequence organizations are inert relative to their environments. This sets the ecological view apart from many others as the latter focus on adaptability. In other approaches efficiency selects the most efficient organizations. The Carroll and Hannan approach of ecological organizations is that these have other competences: 1) reliability (compared to ad-hoc groups) 2) routines can be maintained in organizations but not in ad-hoc groups 3) organizations can be held accountable more easily 4) the organizational structures are reproducible (procedures must stay in place). Selection pressures will favor those criteria in organizations and so they will remain relatively inert: inertia is a result of selection, not a precondition.

What is the size of a population, namely how many organizations with some typology do wee expect to find in a population: 1) what is its niche 2) what is the carrying capacity. Whether an actual organization survives is detemined by 1) competition with other organizations in their niche, 2) legitimation is defined as the extent to which an organization form is accepted socially (D & S are confusing the organizational form and the actual organization here). As they perform consistently and satisfactorily then they survive.

[Nelson, R. and Winter, S. . An Evolutionary theory of economic change . 1982] Their view is routine behavior of firms and developments of economic systems. Firms are better at self-maintenenance than at change if the environment is constant and if change is required than they are better at ‘more of the same’ than at other kinds of change. They denote the functioning of organizations with: 1) routines that are learned by doing 2) the routines are largely tacit knowledge (Viz Polyani 1962). Organizational routines are equivalent to personal skills: they are automatic behavior programmes. ‘In executing those automatic behavior programmes, choice is suppressed‘ [Douma and Schreuder 2013 p272]. Routines are 1) ubiquitous in organizations, they are the 2) organizational memories and they serve as an organizational truce meaning that satisficing takes the place of maximizing in the classical sense. ‘The result may be that the routines of the organization as a whole are confined to extermely narrow channels by the dikes of vested interest … fear of breaking the truce is, in general, a powerful force tending to hold organizations on the path of relatively inflexible routine‘ [Nelson and Winter 1982 pp 111-2 in Douma and Schreuder p. 272].

Thre classes of routines: 1) operating characteristics, given its short term production factors 2) patterns in the period-by-period changes in production factors 3) routines that modify over time the firm’s operating characteristics. And so routine changing processes are themselves guided by routines. And so just as in the biological sphere, the routine make-up of firms determines the outcomes of their organizational search. (The pivot of this categorization is the presence of production factors in the firm and how that changes over time; my starting point, via Rodin, was the presence of ideas that might or might not lead to the buying or making of production factors or any other method, contract, agreement, innovation or mores DPB). Whatever change happens it is expected to remain as close as possible to the existing situation minimizing damage to the organizational truce.

‘He (Nelson) went on to point out that there are three different if strongly related features of a firm..: its strategy, its structure, and its core capabilities’. .. Some of the strategy may be formalizedand writtten down, but some may also reside in the organizational culture and the management repertoire. .. Structure involves the aay a firm is organizaed and governed and the way decisions are actually made and carried out. Thus, the organization’s structure largely detemines what it does, given the broad strategy. Strategy and structure call forth and mould organizational capabilities, but what an organization can do well also has something of a life of its own (its core capabilities DPB).

Nelson and Winter classify themselves as Lamarckian, while Hannan and Freeman classify themselves as Darwinian [Douma and Schreuder 2013 p 275]. In my opinion this classification is trivial as memetic information can recombine so as to introduce new ‘designs’ in a darwinian sense or starting from the environment, new requirements can be introduced that the organization must deal with to in the end internalize them in the rules, DPB.

Hannan and Freeman conclude that organizational change is random, because 1) organizations cannot predict the future very well 2) the effects of the orrganizational change are uncertain. Nelson and Winter conclude that some elbow room (namely learning imitation and conscious adaptation) exists, but that changes are constrained by the routines that exist at some point. From a practical point of view organizations are less adaptable than might be expected.

Differences between ecological and evolutionary approach: 1) in the ecological approach the organizational form is selected, in the volutionary approach the routines are selected 2) the ecological approach observes the organization as an empty box in an environment, whereas the evolutionary approach introduces behavioral elements and so the inside of the firmm is adressed as well.

Chapter 12: All in the Family

The model encompasses a family of economic approaches. The chapter is about their similarities and differences.

Information is pivotal in the model detemining which coordination mechanism prevails. Environmental and selection pressures on both markets and organizations. In this context the pressure on organizations results in the population power law and the pressure on the stock exchange results in the power law (or exponential ?) for the distribution of the listed firms on the grid.

Commonalities in the family of models: 1) comparison between markets and organizations 2) efficiency guides towards an optimal allocation of scarce resources and therefore in the selection of either markets or organizations as coordinating mechanism 3) information is stored in the routines, the rules, arrangements.

Process and / or content traditional dichotomy: differences in the family of models: content theories dealing with the content of strategies or process theories enabling strategies to come into being. Similarly approaches to organizations can be distinguished as process (what are the processes regardless the outcomes) and content (what is the outcome regardless the process leading up to it). From process to ascending content: behavioral theory – organizational ecology – evolutionary theory – dynamic capabilities – RBV – strategy – transaction cost economics – positive agency theory – principal agent theory.

Evolutionary theory is classified as a process based theory with increasingly more capabilities to generate outcomes.

Static and dynamic approaches: itt turns out that on a content-process and statis-dynamic grid, the middle sections are empty: there is no theory that addresses both dynamicism and content generation simultaneously. View picture 12.3 p. 302.

Level of analysis ascending from micro to macro: dyad of individual persons – small group with common interest or purpose – intergroup of groups with different interests or purposes – organization as a nexus of contracts, a coalition, administratieve unit – organizational dyad as a pair of interacting organizations – population of organizations as all organizations of a specific type – system as the entire set of all organizational populations. View picture 12.4 on p. 304.

The extension of the evolutionary theory with dynamic capabilities has provided a bridge to Resource Based View strategy theories and it implies that evolutionary theories can now allow for more purposeful adaptation than before. In addition the managerial task is recognized in the sense of build, maintain and modify the resource and capability base of organizations.

Lastly: 1) at all levels of analysis (dyads to systems) economic aspects are involved 2) the approaches address different problems because they view a different level and because of different time frames 3) even at the same level of analysis different theories see different problems (differrent lenses etc).

Paragraph about complex adaptive systems.

Chapter 13: Mergers and Acquisitions

The significance of m&a: 1) globalization 2) strong cask-flow after the 2001-2003 slump 3) cheap financing facilitates PE 4) shareholder activism and hedge funds. Success and failure: target firms’ shareholder gain 20+% while bidding firms’ shareholders break even. If this is due to more efficient management of the bidder then the market for corporate control is indeed efficient, else: the market can be elated when the deal is announced but disappointed after the deal is closed. Using event analysis (change in stock price around take over) The net overall gain seems to be positive: M&A apparently in that view is a worthwhile activity as it is creating value for the shareholder. Using outcome studies (comparison of performance of merged of taken-over firms against competitors) shows that associated firms compared to a non-merging control group in 11% of the transactions come out stronger after the event and weaker in 58%. This is consistent with event studies in the long term. Details: 1) combined sales equal or lower in spite of consumer prices tendency to rise 2) investments equal 3) combined R&D lowered 4) assets restructured 5) lay-off unclear 6) management turnover in about half the cases. Serial acquirers seem to be more successful than occasional acquirers.

Focus-increasing acquisitions tend to show the best results. Diversifying acquisitions the worst. The best approximation of the success and failutre rate of any acquisition in general is about 50/50. Target shareholders do best, buyers shareholder break-even. Management encounters changes.

Strategy, acquisitions and hidden information: buyers and sellers suffer from hidden information (risk of buying a lemon).

Auctions: the vast majority of M&A take place via an auction. Description of the process.

The winner’s curse and hubris: a majority of the M&A’s destroy shareholder wealth.

Adverse selection. Moral hazard.

Chapter 14: Hybrid forms

This is a form of coordination in between market and organization. Examples: franchise, joint venture, purchase organization, long-term buyer-supplier relation, business groups (some tie of ownership, management, financing etc), informal networks.

The basic thought was that if asset specificity rises then transaction cost rises more rapidly in a market configuration than in an organization: and in a hybrid form this is in between. As an illustration: if asset specificity is very low then the market can coordinate this, if it is medium specific then a hybrid can coordinate it, else it has to an organization to coordinate it.

Tunnelling is the transfer of value through artificial invoicing. Propping is to prop up underperforming or struggling firms to the benefit of the controlling owners.

Chapter 15: Corporate Governance

This is the system by which the business firms are directed and controlled via rules, responsibilities for decisions and their procedures. It also involves the way the company objectives are set, the means of attaining them and the monitorig of them. The focus here is on the relation between the shareholders and the management. Problems can arise for a lack of alignment and because of information asymmetry between them. This may arise because sharwholders expect the management to maximize their shareholder value, while the management expects to maximize her utility function. Porblems: 1) free cash flow issue in mature markets and hubris 2) difference in attitude towards risk: shareholders invest some portion in each firm to spread risk, a CEO invests all her time in the firm: the shareholder expects that risk be taken, the CEO tends to more risk averse 3) different time horizons: shareholder are entitled forever, CEO’s are contracted for a limite period only 4) the issue of on-the-job consumption by management. Any program in this area should focus on reducing the information gap and the existing interests: the size of the agency problem can be reduced by organizational solutions and market solutions.

[Paul Frentrop 2003] shows that the main reason for improvement of the corporate governance regulations was stock market crashes and scandals such as the South Sea Bubble in the UK 1720 and the 1873 Panic in the USA.

The evolution of different corporate governance systems in the world: 1) social and cultural values: in Anglosaxon countries in the social and political realm individual interests prevail over collective interests and this may explain why markets play a relatively large role 2) is the concept of a corporation viewed from a shareholder perspective or from a stakeholder perspective 3) the existence of large blockholdings in companies by institutional investors (yes in Germany and Japan, no in the US) implies a difference of the corporate governance 4) the institutional arrangementss have been developed over time and they incorporate the lessons of the past; in that sense the countries’ policies are path-dependent. Do these diffferences between countries’ corporate governance regulations increase over time or do they converge? This may be the case because: 1) cross-border mergers, 2) international standardization of discosure requirements 3) harmonization of securities regulations and merger of stock exchanges 4) development of corporate govenernance codes (best practices) incorporating those of other countries.

1If private ownership is combined with market allocation the system is called “market capitalism”, and economies that combine private ownership with economic planning are labelled “command capitalism” or dirigisme. Systems that mix public or cooperative ownership of the means of production with economic planning are called “socialist planned economies”, and systems that combine public or cooperative ownership with markets are called “market socialism.

2In Schreuder and Douma ‘it’ is replaced with the organization.

3In this sense Williamson’s ideas are descendant of Coase’s, who argued that organizations are primarily characterized by authority (here: direct supervision).

Notes on Philosophers

Filosofen Lexicon – Werk, Leven en Citaten van tweehonderd grote denkers. Ruben Heijloo, Erno Eskens e.a. – 2007, Diemen: Veen Magazines ISBN 978-90-76988-62-7

This is an (unedited) listing of a number of philosophers with the objective to survey where possible connections are with the subject of the theory of firms under development.

Max Ferdinand Scheler 1874 – 1928

‘Politics and Morals’, ‘The Idea of Eternal Peace and Pacifism’ were subjects of talks he delivered in Berlin in 1927. In his analyses of capitalism Scheler argued that capitalism was a calculating, globally growing ‘mind-set‘, rather than an economic system. While economic capitalism may have had some roots in ascetic Calvinism (cf. Max Weber), its very mind-set, however, is argued by Scheler to have had its origin in modern, subconscious angst as expressed in increasing needs for financial and other securities, for protection and personal safeguards as well as for rational manageability of all entities. However, the subordination of the value of the individual person to this mind-set was sufficient reason for Max Scheler to denounce it and to outline and predict a whole new era of culture and values, which he called ‘The World-Era of Adjustment’.

Theodor Adorno 1903-1969

Kritische theorie (met Max Horkheimer): de mens mag niet gewennen aan zijn vervreemding. Dit is de kloof tussen mens en wereld die is ontstaan na de verlichting en groter wordt. In de verlichting is de wens ontstaan de natuur volledig te beheersen: nu is de mens slaaf geworden van dit streven tot volledige beheersing. Een ander kenmerk van de verlichting is de sociaal-ontologisch atomisme, dat mensen voorstelt als rationele onpersoonlijke subjecten. Verschillen tussen groepen worden niet langer geinterpreteerd als diversiteit maar als het Absoluut andere dat ontoegankelijk is en moet worden geelimineerd.

Dialektik der Aufklaerung (met Horkheimer) 1947, Minima Moralia (1951), Negative Dialektik (1966), Aestethische Theorie (1970).

Giorgio Agamben 1942-

Souvereiniteit van de staat en de reikweidte van de wet. Onderscheid bios, het politieke leven van een burger en de zoe het naakte leven. Bios heeft de macht in te grijpen in zoe, het te definieren. In bepaalde gevallen kan de staat dus de individu buiten de (oorsponkelijke) wet plaatsen, namelijk door te bepalen waar de wet niet meer volledig geldt.

Stanze (1970), Homo-sacer cyclus (1993-), Le Temps qui reste (2000)

Hannah Arendt 1906-1975

Zij analyseert de massa maatschappij die die via automatisering, vervreemding en onverantwoordelijkheid een voedingsbodem is voor een totalitaire staat. Het individuele bestaan wordt daar zinloos en de vrijheid verdwijnt. De oude grieken namen geen genoegen met verzorgende arbeid of productief werk maar eisten ook handelen in het politieke leven.

The Origins of Totalitarianism (1955), The Human Condition (1960).

Aristoteles 384-322 VC

Grondlegger van de metafysica, ‘wat achter de fysica zit’. Dit is de hoogste wetenschap die zich niet bezighoudt met specifieke delen van de werkelijkheid maar met het gehele zijn. Een belangrijk inzicht is dat alles in de natuur door iets anders wordt bewogen of in gang gezet. De bron van alle beweging is de ‘onbewogen beweger’, die dus zelf alle beweging veroorzaakt zonder zelf te bewegen. Ook grondlegger van de logica: syllogisme. Ethica Nicomacheia, hoe de mens zich dient te gedragen.

Jean Baudrillard 1929-

Net als de dingen ontlenen ook de woorden hun belang aan de handel: er is vraag naar en dan bepaalt de markt wat beteksnisvol is. Betekenis is een fantasiebeeld. Het verschil tussen vorm (teken) en (inhoud) betekenis wordt ondernijnd. Er is geen vaste relatie tussen het woord en het object waarnaar het verwijst. Een hoop op een vaste waarde is het geloof in een realiteit. Echter deze realiteit is verrruild voor een hyperrealiteit: alle standpunten worden ongeloofwaardig maar we moeten het ermee doen. Er is geen realiteit meer, het is een sprookje en de media bepaalt wie lang en gelukkig mag leven.

La Systeme des Objets (1968), La societe de consommation (1970), L’Echange symbolique et la Mort (1976), A l’ombre des majorites silencieuses (1978), Les strategies fatales (1983), Amerique (1986).

Jeremy Bentham 1748-1832

Sociaal Utilitarisme: het grootste geluk moet woorden nagestreefd voor het grootst aantal mensen. Het individu dat van nature streeft naar zijn eigen geluk, moet inzien dat het dit het beste is gediend als hij zijn eigen streven aanpast aan dat algemene doel. Een ongebreideld hedonistisch egosime zal dus niet het gevolg zijn. Het principe geldt voor ethiek en voor het recht. De wetgever moet zich zo min mogelijk bemoeien met de individu.

Principles of moral and legislation (1781), The rationale of evidence (1827).

Isaiah Berlin 1909-1997

Er zijn veel ondeelbare menselijke waarden die niet tegen elkaar kunnen worden weggestreept noch kunnen worden gereduceerd naar dingen zoals geluk of nut. Objectief pluralist omdat de waarden waarop wij onze keuzes baseren niet door onszelf worden uitgevonden. Kritisch tegenover: 1) de veronderstelling dat op alle vragen 1 antwoord bestaat 2) dat die antwoorden kenbaar zijn 3) dat ze niet met elkaar in tegenspraak zijn. Volgens ddit standpunt heeft de geschiedenis geen einddoel en kan de filosofie geen definitieve antwoorden geven.

Karl Marx (1939), The hedgehog and the fox (1953), Two concepts of liberty (1958), Against the current (1979)

Edmund Burke 1729-1797

De maatschappij is een contract (.) Omdat de doelen van deze maatschappij de levensduur van de generaties overtijgen, gaat het hier niet alleen om een verbond tussen levernden, maar ook tussen levenden, overledenen en degenen die nog moeten worden geboren.

Rudolf Carnap 1891-1970

Logische positivisme: duidelijkheid en helderheid in de wetenschap.

Der logische oufbau der welt (1928), Logische syntax der sprache (1934), testability and meaning, introduction to semantics (1942), formalisation of logic (1943), meaning and necessity (1947), logical foundations of probability (1950).

Charles Robert Darwin 1809-1882

Daniel Clement Dennett 1942-

Jacques Derrida 1930-2004

Deconstructivisme: de betekenis van een tekst heeft per se geen betekenis maar wordt bepaald door de context ervan (dehors texte). Omdat wereld buitend e tekst verandert verandert de betekenis van de tekst zelf ook. De ene betekenis is niet noodzakelijk beter dan een andere, het is meer zoals het wegnemen van een matroesjka poppetje: het is een ander poppetje dat tevoorschijn komt, niet per se beter.

De la grammatologie (1967), La voix et la Phenomene (1967), Marges de la philosophie (1972), eperons. Les styles de Nietsche (1978), La verite en peinture (1979), Glas (1981), Positions (1981), Signeponge-signsponge (1984).

Rene Descartes 1596-1650

Gedachten kennen geen ‘uitgebreidheid’ en behoren daarmee niet tot de fysieke ruimte. Grondlegger van de moderne filosofie.

Amitai Etzioni 1929-

Grondlegger van het communitarisme: de smanleving bestaat volgens hem uit gemeenschappen. Binnen deze gemeenschappen heersen normen en waarden en van de burgers wordt verwacht dat die deze respecteren. Etzioni gelloft niet dat de politiek deze normen en waarden van boven kan opleggen, deze moeten worden door de gemeenschappen zelf worden bepaald. Die gemeenschappen ontsporen niet makkelijk als ze niet door de politiek worden aangestuurd. Vanuit de Joods-Christelijke traditie is namelijk bekend hoe we goed moeten samenleven en als de poitiek zich er niet mee bemoeit komt die kennis vanzelf bovendrijven. Herintroductie van de schandpaal zal de samenleving ten goede komen.

Comparative Analysis of Complex Organizations (1961), The Active Society: A Theory of Societal and Political Process (1968), The new Golden Rule (1996), From Empite to community: A New approach to international relations (2004).

Ludwig Feuerbach 1804-1872

Atheisme: God voorgesteld als een projectie van de mens, een ideaal buiten zichzelf. Religie is verklaard vanuit egoisme en drang naar menselijk geluk. Door deze idealistische stap plaatst de mens zijn wezen buiten zichzelf en vervreemdt dus van zichzelf. Tegenover deze vervreemding komt een nieuw materialisme, een herwaardeing van het materialisme. Objectieve kennis is alleen mogelijk door aards te denken, omdat alle kennis via de zintuigen binnenkomt en niet via God.

Das Wesen des christnetums (1841), Grundzatse de Philosophie der Zukunft (1843), Vorlesungen uber das Wesen der Religion (1848), Theogonie (1857).

Paul Karl Feyerabend 1924-1994

Criticus van de wetenschappelijke methode: alle wetenschappers worden gedreven door opportunisme en verzinsels. Hij stelt tegenover de zogenaamde strenge voorschriften van de wetenschappelijke methode de anarchistische methode. In de menselijke ontwikkeling is slechts 1 principe zichtbaar: ‘anything goes’. Als iedereen dan zijn eigen definitie van vooruitgang mag geven dan kan dat beter verrijking noemen. Een werkelijk humane samenleving moet ruimte maken voorr zoveel mogelijk ‘experiments of living’.

Against Method (1970), Science in Free Society (1978)

Michel Foucoult 1926-1984

Oorsponkelijk humanistische Franse existentialist. Verlaat deze stroming omdat hij van mening iis dat niet de mens maar de taal de bepalende factor is. Wij worden allemaal ingevoegd in de talige ‘orde van het vertoog’ dat ‘zich inschrijft op het lichaam’. Het heersende discours heeft de macht. Ontwikkelde een methode die hij ‘Genealogie’ of ‘Archeologie van het weten’ omschreef: een goed denker graaft in de verschillende vertogen die binnen een cultuur over elkaar schuiven en elkaar verdringen. Er is geen continuiteit in het denken en geen vooruitgang in het denken. Er is volgens hem een sterke relatie tussen kennis en macht: kennis is een vorm van machtsuitoefening.

Histoire de la Folie (1961), Les Mots et les Choses (1966), Surveiller et Punir (1975), Histoire de la Sexualite (1976-84).

Gottlob Frege 1848-1925

Wens om – zoals Leibniz – een zuivere taal te ontwikkelen waarin geen misverstanden mmogelijk zijn. Analyseren van de structuur van beweringen aan de hand van symbolische logica.

Beggriffsschrift (1879), Die Grundlagen der Arithmetik (1884), Uber Sinn und Bedeutung (artikel 1892), Grundgezetze der Arithmetik (2 delen 1893-1903).

Hans-Georg Gadamer 1900-2002

Hermeneutiek is de kunst van het intepreteren. Hij beschouwde dat als meer dan een wijsgerige techniek en verheven tot een universeel principe. Je kunt de wereld lezen als een tekst als je open staat voor de betekenissen daarin. Het verklaren van feiten is iets anders dan het begrijpen ervan. De westerse levenshouding is meer verklarend en minder begrijpend. Polemiek met Derrida die stelde dat in elke tekst afhankelijk van de context veel betekenissen mogelijk zijn en dat de echte betekenis dus mist. Tegenargument Gadamer: dan is elke discussie onmogelijk; als je de ander serieus neemt dan ga eje ervan uit dat die iets probeert te vertellen en dan probeer je dat te begrijpen.

Wahrheit und Methode: Grundzuge einer einer philosophischen Hermeneutik (1960), Kleine Schriften (1967-77), Vernunft im Zeitalter der Wissenschaft: Aufsatze (1976).

William Godwin 1756-1836

Elke regeringsvorm is een corrput systeem dat de burger onwetend en afhankelijk houdt. Door de verspreiding van kennis zal de macht van de regering afnemen. De politiek kan dan vervangen worden door moreel besef.

An Enquiry Concerning Political Justice (1793), The Enquirer (1798), Thoughts on man (1831).

Richard Mervyn Hare 1919-2002

Hij bestrijdt het Emotivisme dat stelt dat emoties ten grondslag liggen aan een moreel oordeel. Zoals de emotivisten vond hij ook dat een moreel oordeel geen werkelijke stand van zaken beschrijft maar eerder een ‘universeel gebod’ is. Prescriptivisme: een moreel oordel is bedoeld om mensen iets voor te schrijven. Een moreel oordeel is universeel imperatief: gestoeld op een universeel principe en dus geldig voor iedereen en niet alleen voor een individu.

The language of Morals (1952), freedom and reason (1963), Moral Thinking (1981).

Georg Wilhelm Friedrich Hegel 1770-1831

De geschiedenis is een dialectisch proces: een stelling these en haar negatie de antithese worden telkens in een hogere synthese verzoend. Die synthese is werr de volgende kandidaat om te worden verzoend met haar negatie.Uiteindelijk is alles opgeheven in en tegeelijk deel van ‘het Absolute’, de Geest’, de Rede’. Door na te denken over het denken zelf kan een mens Aufhebung bereikenn.

Die Phanomenologie des Geistes (1807), Wissenschaft der Logic (1812-16), Philosophie ds Rechts (1821), Enzyklopaedie der philosophischen Wissenschaften (1827).

Martin Heidegger 1889-1976

Wat is de zin van zijn en hoe krijgen we daar zicht op? De mens is het object van ijzn studie. Hij beschouwt de mens als dasein (erzijn, altijd al ergens zijn). De mens is in-de-wereld. Vanuit een ontologisch perspectief vertoont de wereld waarin de mens leeft betekenis en samenhang. De wereld is niet op te vatten als een totaliteit van alle dingen.Prereflexief gaat de mens met de ‘zijnden’ om; het verwrven van kennis van de omgeving is een secundaire modus van het in-de-wereld zijn. De zin of de betekenis van zijn is de tijd. De modificaties van de tijd (v, h, t) komen in het dasein terug als volgt: de mens is geworpen in een bepaalde omgeving, ontwerpt zijn eigen leven en die twee momenten komen samen in het heden, de articulatie.Gelassenheit: het zijn zal van zich doen spreken voorzover wij ons daarvoor openstellen. Dit is een kritiek opo de moderne gemechaniseerde en eendimensionale weereld die in hey teken staat van ‘zijnsvergetelheid’.

Sein und Zeit (1927), Was ist Metaphysik (1929), Holzwege (1950), Der Satz vom Grund (1957), Die Technik und die Kehre (1962).

Thomas Hobbes 1588-1679

Mechanisch en deterministisch wereldbeeld zoals Descartes. Beweging en lichaam staan daarin centraal. De staat is een kunstmatig lichaam dat bedoeld is om geweld tussen mensen te voorkomen. Geweld beheerste hun natuurtoestand: oorpronkelijk leefde demens in een toestand van anarchie waarin iedereen gewetenloos voor zichzelf opkwam (homo homini lupus). Men heeft de conclusie getrokken dat het beter is om zich gezamenlijk aan een hogere macht te onderwerpen: de staat. De staat dwingt beschaving af: ook nu de mens beschaafd is moet de staat dwang blijven uitoefenen de enige manier waarop wetten worden gerespecteerd is door strenge handhaving. Dit is de absolute staatsmacht, de Leviathan. Die macht gaat zover dat de staat ook de macht heeft over wetenschap en moraal.

De cive 91642), The elements of law, natural and political (1650), Leviathan orthe matter, form and power of a commonwealth eccelasiastical and civil (1651), De corpore (165), De homine (1658).

David Hume 1711-1776

Hume was een empirist: al onze kennis is op onze impressies terug te voeren. Hij maakt een onderscheid tussen impressies op grond van uiterljke waarneneming en impressies op grond van innerlijke waarneming. Uiterlijke waarneming zegt iets over de verschijningsvorm van een object. De innerlijke waarneming kan ietrs zeggen ove de ‘substantie’ ervan: datgene dat overblijft als je alle eigenschappen wegdenkt. ‘Substantie’ is een constructie van het innerlijk en het resultaat van de zichzelf waarnemende werkzaamheid van het verstand dat waarnemingen ordent op basis van gelijkheid en verscheidenheid, ruimtelijke of tijdelijke nabijheid. Het verstand legt ook causale verbanden. Hume had kritiek op het begrip causaliteit, omdat het net als substantie niet in een externe waarneming besloten kan liggen. Dit is een construct van de menselijke geest die als mens ook zeker nuttig is maar als wetenschapper niet staande kan worden gehouden.

A treatise of human nature (1739-40), An enquiry concerning the principles of morals (1751), Dialogues concerning natural religion (1779).

William James 1842-1910

Amerikaans pragmatisme: de waarde van gedachten en theorieeen is af te meten aan hun betekenis in het dagelijks leven. Een idee is ‘waar’ zolang het een nuttige rol heeft in ons leven. De mate waarin dit het geval is is een persoonlijke keuze voor een ieder. Disputen over de ziel, bewustzijn en de relatie tussen subject en object zijn ovebodig.

Principles of psychology (1890-92), The will to believe and other eassays (1897), The varieties of religious experience (1902), Pragmatism (1907), The menaing of truth (1909).

Immanuel Kant 1724-1804

Belangrijke verlichtingsdenker. In het werkje over het project van de verlichting ‘Was ist Aufklaring?’ stelt hij dat de mens zich moet bevrijden van de onmondigheid en moet durven denken. Goed denken betekent binnen de kritische grenzen van het redelijke blijft, waarbij kritisch betekent het scheiden van de zin en de onzin. Dit is het categorisch imperatief: van jezelf eisen dat al je handelingen steeds tot algemene wet kunnen worden verheven (wat niet wilt dat u geschiedt..). Het is niet zo dat d geest de dingen waaarheidgetrouw spiegelt: onze geest doet iets met die impressies: de verschillende impressies worden tot een coherente waarneming omgevormd. Dat gebeurt door het kenvermogen dat daarmee een specfiek stempel drukt op onze waarnemingen. Omdat tijd en ruimte in ons kenvermogen ingebakken zijn, kunnen we ons bijvoorbeeld geen voorstelling maken van dingen die zich buiten de tijd of buiten de ruimte zijn. Het kenvermogen structureert het het zintuigelijk materiaal met denkvormen zoals causaliteit: dat kunne we niet uit de natuur afleiden (Hume) maar zonder causaliteit kunnen we de natuur niet denken.

Allgemeine naturgeschichte und Theorie des Himmels (1755), Kritik der reinen Vernunft (1781), Kritik der praktischen Vernunft (1788), Kritik der urteilskraft (1790), Zum Ewigen Frieden (1795), Metaphysik der Sitten (1797).

Thomas Samuel Kuhn 1922-1996

Samen met Popper de grondlegger van de wetenschapsfilosofie. Popper beschrijft een evolutionair systeem waarin theorieen steeds door beter theorieen worden beconcurreerd en vervangen. Kuhn stelt dat wetenschap zich ontwikkelt met revoluties waarbij en radicaal nieuwe kijk op de werkelijkheid kan ontstaan: een verandering van paradigma (fundamentele kijk op de wereld op een bepaald moment). Deze tijdelijk overtuigeingen veranderen niet vaak en als dat wel gebeurt dan kan dat grote gevolgen hebben voor de wetenschappelijk kijk op de wereld. Oude en nieuwe paradigma’s zijn incommensurabel: ze kunnen niet in elkaar worden uitgelegd en bouwen dus ook niet op elkaar voort, een breuk met Popper.

Kuhn richt zijn kritiek in de eerste plaats op de door Popper veronderstelde gestage groei van wetenschappelijke kennis, door er twee soorten van wetenschappelijke bedrijvigheid tegenover te stellen: normale en revolutionaire wetenschap. Normale wetenschap gaat uit van een verzameling vooronderstellingen of paradigma’s die door een wetenschappelijke groep wordt gedeeld en binnen die groep niet (meer) ter discussie staat. Deze paradigma’s – wetten, modellen, methoden, schoolvoorbeelden – worden tijdens de opleiding aangeleerd en vormen het onproblematische kader waarbinnen wetenschappelijke vraagstukken snel kunnen worden opgelost, omdat tijdrovende discussies over de geldigheid van de paradigma’s achterwege kunnen blijven. Blijven er te veel vraagstukken onopgelost, dan raakt het paradigma in een crisis en komen er alternatieve paradigma’s boven tafel. Blijkt een alternatief paradigma succesvoller dan een bestaand, dan betekent dat het verval en de ondergang van een oude en de geboorte van een nieuwe wetenschappelijke school. Er vindt met andere woorden een wetenschappelijke revolutie plaats. De grote voorbeelden van zulke revoluties zijn de overgang van de aristotelische naar de newtoniaanse mechanica en van de newtoniaanse mechanica naar die van Einstein.

Er vinden dus steeds revolutionaire breuken plaats in de wetenschappelijke ontwikkeling. De schijn van continue groei wordt veroorzaakt doordat de hele geschiedenis van de wetenschap na elke revolutie in de leerboeken vanuit het nieuwe paradigma wordt herschreven.

Wat hier het meest van belang is, is de opvatting van Kuhn dat het ene compacte beeld van wetenschappelijk kennen zoals ons dat door Popper wordt voorgehouden, vervangen moet worden door een veel gefragmenteerder beeld van paradigmatisch verschillende soorten van wetenschap. Wordt de wetenschap in Poppers filosofie voorgesteld als een stevige, homogene appel, dan is Kuhns versie op te vatten als een sinaasappel, dat wil zeggen wat sappiger en opgebouwd uit verschillende, min of meer op zichzelf staande partjes.

Het model van Kuhn stelt dat:

1) een keuze tussen theorieën niet mogelijk is (zij nemen elkaars plaats in)

2) groei van kennis niet aangetoond is

3) regels niet noodzakelijk zijn voor groei van kennis (omdat niemand die regels uiteindelijk serieus neemt)

Dat is een flinke stap op weg van Poppers moderne naar Feyerabends postmoderne wetenschapsopvatting.

The copernican revolution, planetary astronomy in the development of the western thought (1957), the structure of scientific revolutions (1962), the essential tension: selected studies in scientific traditiona and change (1977), Black-body theory and the quantum discontinuity (1978).

Julien Offray de LaMetttrie 1709-1751

geen scheiding tussen lichaam en ziel want de ziel conform Descartes bestaat niet. Verklaarde menselijk gedrag in fysiologische mechanische termen. Materialist: er is geen ruimte voor vrije wil of morele verantwoordelijkheid. De ziel is een orgaan om indrukken mee te verwerken analoog aan andere organen. Als die niet goed werkt dan wordt een mens slecht. Slechtheid houdt geen verband met moraal maar met lichamelijk gesteldheid: dieven moeten niet worden gecastijd maar behandeld.

Histoire naturelle de l’ame (1745), l’homme machine (1747), l’homme plante (1748), systeme d’epicure (1750).

Gottfried Wilhelm Leibniz 1646-1716

Kernpunt van zijn metafysica is de monade: een eenheid die niet tot iets anders kan worden hereid en niet kan worden gedeeld. Een monade is een kracht die een ondeelbaar individu in beweging zet. Dit grijpt terug op aristoteliaanse ‘entelechie’, ingebouwde doelgerichtheid. Om de orde van de bewegingen van een monade te verklaren. De niveaus van een monade zijn: levenloos, bewust en zelfbewust. De mens als enige in staat om via de rede tot zelfkennis en kennis van god te komen. God is de hoogste monade heeft alle mogelijke werelden overzien en deze als beste geschapen, waarbij beste moet wordenn opgevat als grootst mogelijke vescheidenheid binnen de strengst mogelijke orde. Bij de schepping zijn alle monaden op elkaar afgestemd waardoor er harmonie bestaat. Drie soorten kwaad: metafysisch omdat alleen god pefect is, fysische tekostkomingen leiden tot verdriet en pijn en moreel kwaad: als vrije wezens kunnen we moedwillig kwaad handelen en daarmee zondigen. Dat is het echte kwaad.

Discours de metaphysique (1686), nouveaux essais sur l’entendement humain (1704), essais de theodicite sur la bonte de dieu, la liberte de l’homme etl’origine du mal (1710), La monadologie (1714).

John Locke 1632-1704

De eerste vertegenwoordiger van het Brits empirisme dat vaak tegenover het continentaal rationalisme wordt geplaatst. Belangriijk discussiepunt is de mogelijkheid van a priori kennis, dus kennis die voorafgaat aan ervaring. Volens Locke is het bewsutzijn een tabula rasa en niet zoals de rationalisten zeggen met aangeboren ideeen. Die zijn het gevolg van waarnemingen of van reflectie van de geest op innerlijke processen. Hoewel de geest geen aangeboren iddeeen heeft beschikt hij wel over het vermogen om te reflecteren. Ideeen kunnen dan enkelvoudig of samengesteld zijn. De waarneming van van de dingen in de buitenwereld betreft nooit de substantie maar haar eigenschappen. Als er eigenschappen zijn dan moet er iets zijn dat die eigenschappen draagt. Locke neemt praktisch de geestelijke substantie (ik) en God aan. Het ging hem om de toepassing van zijn leer; dogma of absolutisme dat een vrije en tolerante samenlveing in de weg staat hekelde hij. Scheiding van kerk en staat, afpalen rechten van de individu versus de staat: liberaal.

Epistola de tolerantia (1689), two treatises on government (1689), an essay concering human understanding (1690).

Jean-Francois Lyotard 1924-1998

Het moderne denken is gekenmerkt door dde grote verhalen: marxisme, vooruitgangsdenken, emancipatiedenken etc. Postmodernisme verlaat dit geloof: het einde van de grote verhalen. Een mens kan zijn leven niet langer in het licht stellen van een alomvattend einddoel. Dat leidt tot verwarring en versombering. Hij vond dat niet negatief omdat de grote verhalen onkritisch zijn, ze de kloof tussen realiteit en het idee miskennen. De ethiek moet juist de stelligheid afleggen, deze kloof erkennen en de complexiteit van de werkelijkheid omarmen. Om uitdrukking te kunnen geven aan die heterogene werkelijkheid en de grillige geschiedenis zoekt Lyotard aanwijzingen in de taal. In zinnen staan woorden achter elkaar in de tijd. De manier van reageren erop bepaalt welk ‘taalspel’ je speelt, een zogenaamd ‘genre’. Er bestaan geen regels die die genres in elkaar vertalen.

La condition postmoderne. Rapport sur le savoir (1979), Le diffrend (1983), L’enthousiasme; la critique kantienne de l’histoire (1986).

Herbert Marcuse 1898-1979

Kritiek van de Frankfurters (met Horkheimer en Adorno) op het naoorlogse kapitalisme: de westerse liberale democratieen worden gestuurd door en zijn doordrongen van consumentisme. De valse behoefte die hierdoor wordt opgewekt neemt haar aandacht weg haar eigenlijke situatie. Wetenschap en techniek die aan het proletariaat van het kapitalisme van marx de mogelijkheid gaven zich te te organiseren, zijn beheersinginstrumenten in de handen van het kapitaal geworden. Marcuse hekelt de seksuele basis voor de sociale en politieke onderdrukking in Amerika. Industralisatie heeft ervoor gezorgd dat de welvaart is toegenomen en een toenemende deels onzichtbare onderdrukking. Het irrationale productieapparaat dient geen bewuste doeleinden meer en beheerst daarom de mens. Aan deze ‘technologische rationaliteit’ wordt alles geslachtofferd. Verzet is kansloos omdat de massa zih daarvan afkeert en alleen de stem van technologische rationaliteit vind gehoor. Alles wordt 1 dimensionaal.

Eros and civilisation (1955), One-dimansional man (1964).

Thomas More 1478-1535

Marx avant la lettre.

Utopia (1516)

Arne Naess 1912-

Na 1970 actief in natuurbehoud en relatie tussen mens en natuur en ontwikkelt de filosofie van ‘deep ecology’. De natuur is niet iets dat onderworpen en getemd moett worde. Ze heeft een eigen waarde. Vanuit dit perspectief bepleit hij het behoud van ecologische en culturele diversiteitvan natuurlijke sysstemen.

Erkenntnis und wissenschaftliches Verhalten (1936), Scepticism (1968), The Shallow and the Deep, Long range ecology movement (1973).

Martha craven Nussbaum 1947-

Rationaliteit van emoties, waaronder angst en woede. Irrationaliteit van emoties zoals schaamte en gevoelens van wraak. Verzet tegen een ethiek die zuiver rationeel is.

The fragility of goodness (1986), Cultivating humanity (1997), Upheavals of thought (2001), Hiding from humanity (2004).

William van Ockham 1287-1347

Meende dat algemene begrippen zoals soorten (kat) en universalia (dier) alleen maar namen zijn en dus niet werkelijk bestaan. Realisten meenden dat het algemene het meest oorspronkelijk is en dat het bijzondere daar geheel in besloten ligt. In tegenstelling tot de realisten meenden de nominalisten waaronder Ockham dat alleen het concrete werkelijk is en dat het algemene daaruit is afgeleid. De regel van Ockham luidt dat nooit meer oorzaken voor iets moeten worden aangenmen dan dat strikt noodzakelijk is om de zaak te verklaren en dat we dus niets overbodigs in de theorie moeten opnemen (entia non sunt multiplicanda praeter necessitatem).

Opera Philosophica et theologica (1317-47), opera politica (1332-47).

Charles Sander Peirce 1839-1914

Aan de basis van het pragmatisme. In plaats van het wezen van dingen te benoemen keek hij vooral naar het effect van veronderstellingen en begrippen. Als een stelling geen effect teweeg brengt dan is de stellingname overbodig. Met name de onderzoekers van a priori (eeuwige) waarheden waren zijn doelwit. Nieuwe waarheidsopvatting: ‘Waar is datgene wat nuttig en van belang is’.

The fixation of belief (1877), How to make our ideas clear (1878).

Karl Raimund Popper 1902-1994

Gekkant tegen het logisch positivisme: in de eerste plaats bestaan er volgens Popper geen harde zintuiglijke waarnemingsfeiten. Waarnemingen krijgen pas betekenis binnen de context van een voorafgaande theorie en kunnen dus nooit de onbetwijfelbare ervaringsbasis vormen waarop onze wetenschappelijke kennis kan worden gefundeerd. Wetenschappelijke kennis is, met andere woorden, niet objectief buiten de mens gegeven, maar is mensenwerk.

In de tweede plaats, zei Popper, is de positivistische bezigheid een beperkt aantal waarnemingen tot algemeen geldige wetten te verheffen, strikt logisch gesproken niet mogelijk. Wetenschappelijke uitspraken zullen het stadium van vermoedens of hypothesen nooit achter zich kunnen laten. Het aantal werkelijke waarnemingen is altijd zeer klein ten opzichte van het totaal aantal mogelijke waarnemingen en iedere volgende waarneming kan met de vorige in tegenspraak zijn. Op grond van deze kritiek op het op inductie gestoelde verifieerbaarheidsbeginsel van de Wiener Kreis ontwerpt Popper een ander criterium waarmee wetenschappelijke van niet-wetenschappelijke kennis onderscheiden kan worden. Zijn falsifieerbaarheidscriterium (ontwikkeld in zijn boek Logik der Forschung uit 1934) stelt eerder eisen aan de vorm van wetenschappelijke theorieën dan dat ze de inhoud van hun relatie met de werkelijkheid definieert. Over de relatie van kennis en werkelijkheid, dus over de empirische basis van theorieën, valt volgens Popper weinig te zeggen.

Wetenschappelijke kennis is dus niet stevig verankerd in een empirisch fundament. Aan een wetenschappelijke theorie moet niet de eis worden gesteld dat ze bevestigd is, maar juist dat ze te weerleggen valt. Anders dan de leden van de Wiener Kreis gaat Popper er dus niet van uit dat de wetenschappelijkheid van een theorie groter wordt naarmate ze meer ‘waar’ is. Integendeel, over de waarheid van een theorie valt niets te zeggen. De onwaarheid van een theorie is daarentegen wel degelijk te bepalen. Voortdurende toetsing van theorieën en de onherroepelijke verwerping van theorieën die het laten afweten, waarborgt volgens Popper de groei van wetenschappelijke kennis, die weliswaar nooit ‘de werkelijkheid’ zal vatten, maar haar op deze wijze wel steeds dichter zal weten te benaderen. Popper is het dus wél met de logisch positivisten eens dat onze wetenschappelijke kennis in de loop van de tijd steeds verder aangroeit. Er bestaat wel degelijk een wetenschappelijke traditie, en hoe weinig we ook weten, we weten wel steeds meer.

Wat is waarheid en waar moeten de grenzen van de wetenschap worden getrokken? Uitspraken te toetsen op falsifieerbaarheid ofwel weerlegbaarheid om ze te kunnen beoordelen op hun waarheidsgehalte. De waarde van een wetenschappelijke bewering is afhankelijk van gevolgen bij gebleken waarheid of onwaarheid ervan. Een uitspraak bewijst zijn waarheid wanneer de hypothese, ondanks herhaaldelijke pogingen een tegenvoorbeeld te genereren, nog steeds niet is weerlegd. De objectiviteit van kennis bestaat volgens Popper uit deze toetsbaarheid.

Logik der forschung (1935), The open society and its enemies (1945), The poverty of historicism (1957), Objective Knowledge (1972).

Willard van Orman Quine 1908-2000

Epistemologisch Holisme: onze kennis is een netwerk waarin elkeuitspraak samenhangt met andere. Er is geen bootom-upkentheorie waarin een beperkt aantal axiomas al het andere onderstut. Ook centrale stellingen zijn beschikbaar voor kritiek. Het onderscheid tussen analytische uitspraken (altijd waar) en empriische uitspraken (niet noodzakelijk altijd waar). Maar wat is de waarde van de uitwisselbaarheid van zinnen die elkaars analytische equivalent zijn? Mensen achten ze inwisselbaar en dan is empirie in de synthese betrokken. Elke uitspraak commiteert zich ontologisch op wat er feitelijk bestaat: ‘to be is to be a cvalue of a variable.’

From a logical poinnt of view (1953), Word and object (1960), Pursuit of truth (1990).

Richard McKay Rorty 1931-

Pragmatist: de filosofie is niet langer de koningin van de wetenschappen. Waarom zouden we alles goed moeten grondvesten? Theorieen moeten worden beoordeeld op hun gebruikswaarde: wat is hun gebruikswaarde.

He linguistic turn (1967), Philisophy and the mirror of nature (1980), Consequences of pragmatism (1982), Contingency, Irony, Solidarity (1989), Achieving our Country (1998).

Bertrand Arthur William Russell 1872-1970

Wiskundige logica: logicisme stelt dat wiskunde grotendeels is te reduceren tot logica. Analyische filosofie: logische analyse van filosofisch taalgebruik met het oog op het voorkomen van schijnproblemen ontstaan door onduidelijk taalgebruik.

The principles of mathematics (1903), Principia Mathematica (1910-13), Problems of philosophy (1912), Analysis of mind (1921), An enquiry into meaning and truth (1940), A history of western philosophy (1945), Russell-Einstein manifesto (1955)

Jean-Paul Sartre 1905-1980

In zijn bestaan definieert een persoon zichzelf door zijn acties en keuzes. Dat definieert hem omdat hem bij zijn geboorte geen essentie is geschonken: ‘existentie gaat vooraf aan essentie’. De mens is zomaar in een zinloze wereld geworpen en moet zichzelf gaan ontwerpen. Niet #kiezen is geen optie. Je bent vrij om dat naar eigen inzicht te doen en de keuze is bepalend voor je eigen toekomst en die van de rest van de wereld. Ik en alleen ik moet aan mijn leven inhoud geven en doe ik dat niet dan ben ik mijn lven te kwader trouw. Andere zijn je daarbij tot last omdat ze altijd een andere visie op je hebben dan je zelf hebt: je wordt een object. Maaropas als je jezelf kunt zien door de ogen van de ander ken je je eigen identiteit en kun je je identiteit veranderen.

L’etre et le neant (1943), les chemins de la liberte (1945), l’existentialisme est un humanisme (1946), huis clos (1946), critique de la raison dialectique 91960).

Ferdinand de Saussure 1857-1913

Ontwikkelde een radicaal nieuw concept van taal: de betekenaar (het gebruikte teken) en de betekenis. D erelatie ertussen is toevallig en berust op conventies. Taal is volgens de Saussure een systeem van arbitraire tekens waarin de betekenissen van onze woorden slechts historische constructen zijn.

Memoires sur le syteme primitif des voyelles dans les langues indo-europeenes (1878), Cours de lingustique generale (1916).

Arthur Schopenhauer 1788-1860

Het leven draait om wil en voorstellingen. Iedereen kent zijn wil op een directe manier. Onze overige kennis is afhankelijk van de voorstellingen die we hebben van objecten. De wil is een last: een redeloze, nietsontziende, lage, blinde drift. De kunst is om deze wil te ontkomen.

Die welt als wille und vorstellung (1819), Die beide grundprobleme der Ethik (1841), Parerga und paralimpomena (1851).

Adam Smitth 1723-1790

Invisible hand. Grondlegger van de politieke economie.

The theory of the moral snetiments (1759), An inquiry into the nature and causes of the welath of nations (1776).

Baruch de Spinoza 1632-1677

Totale vrijheid is alleen te bereiken door een radicaal gebruik van de rede. God en de natuur zijn hetzelfde: kennis van god en van de natuur vallen dus samen. God is oneindig en de enige bestaande substantie of ‘zelfstandigheid’ en alles speekt zich dus in god af. Ook de mens is onderdeel van de natuur en onderworpen aan de wetmatigheden van de natuur. Het menselijk denken is net zo aan oorzaak en gevolg onderworpen als het menselijk lichaam. De menselijke geest ontdekt patronen in zijn dagelijkse ervaring en ontleent algemene waarheden aan zijn toevallige rvaringen. Zo leert hij stukje bij beetje zijn ervaring te intrpreteren vanuit het mindr toevallige standpunt van het gehel namelijk dat van god en ziet hij dat de ervaringen noodzakelijk zijn. Spinoza’s ‘adequate’ vorm van kennis stuurt het handelen in de richting van het gemeeschappelijk belang.

Renati Des Cartes principiae philosophiae (1663), Tractatus theologico politicus (1670), Ethica orde geometrico demonstrata (1677).

Charles Taylor 1931-

De sociale wetenschappen houden zich bezig met interpretatie en de fysica met wetmatigheden. Fysische methoden kunnen niet worden gebruikt voor de sociale wetenschappen omdat dat leidt to een beeld vaneen ongebonden en niet-gesitueerde mens.Kenmerkend voor de mens is dat hij zijn identiteit realiseert en ontwikkelt door een door een voortdurende herevaluatie vann wat ‘het goede’ is. Dit proces is vebonden met wat Taylor de ‘moral space’ noemt, namelijk de sociaal historische context waarbinnen het menselijk handelen zijn betekenis krijgt.Liberalisten stellen dat het individu vanuit zijn eigen opvattingen over het goede leven zijn identieit kan bepalen. Volgens Taylor zijn die opvattingen gefundeerd in gemeenschappelijke tradities en daar noodzakelijk mee verbonden. De identiteit van een individu wordt gerealiseerd en ontwikkeld I een gemeenschap in een sociale context. Dit is communitarisme. Taylor stelt wel (in tegenstalling tot andere comunitaristen) dat iedereen kritisch moet blijven over gemeenschappelijke opvattingen over het goede leven.

The explanation of behaviour (1967), Hegel (1975), Hegel and modern society (1977), Philosophical papers vol 1: human agency and language (1985), Phil Papers vol 2: Philosophy and he human sciences (1985) Sources of he Self (1989), The malaise of modernity (1991), multiculturalism and the politics of recognition (1992), Philiosophical Arguments (1995).

Alexis de Tocqueville 1805-1859

De geschiedenis beweegt zich naar meer vrijheid en gelijkheid voor allen. Democratie neemt toe: in Europa maakt de aristocratie plaats voor de burgerij. De schaduwzijde van de democratie is dat vrijheid kan leiden to individualisering en desinteresse. Hierdoor zou de burgrij zich passief gaan opstellen tegenover de politiek en zich stilzwijgend laten opnemen in een bureaucratische samenleving waarin alles voor hem geregeld wordt. Door inertie van de burger zou de regering wiorden gedwongen om over alles en iedereen te beslissen (soft despotism of tirannie van de meerderheid) en dit is dan de minst slechte van alle kwaden.

De la democratie en Amerique (1835), De la democratie en Amerique (18440), l’ancien regime et la revolution (1856).


The word Maximen is a contraction of the words ‘maxima sententia’. It represents a game where statements about human behavior are delivered. There are three rules for the game: the maximen must be compact, apply to human behavior in general and contain a ‘pointe’ that guarantees succes as a game. La Rochefoucauld had his first version ciculate in 1663, first published in 1664. More publications with his amendments followed; the last publication bore his strongest signature and was published in 1678.

This is a selection of some Maximen of La Rochefoucauld (1613 – 1680). They are an attempt at the identification of universal patterns in human behavior. The principle that such a thing as universal human behavior exists perhaps points at a pattern in human behavior as a result of other, for instance biological motivators, or general held beliefs.

I put some annotations at each, the reasons why these were selected and the ‘Ch’ refers to the chapter of the book in progress I thought it connects to.

106 About the development of knowledge.

Ch Bib de bab?

Om iets goed te kennen moeten we de details kennen, maar omdat er bijna oneindig veel van zijn, blijft onze kennis altijd oppervlakkig en gebrekkig.

153 About in-born skills and how they develop. Analogy to the relation genotype and phenotype. Analogy to skills coming to bear in an environment that ‘folds around you’.

Ch Patterns in space and time?

De natuur schenkt ons talenten, het lot zet ze aan het werk.

161 Something to do with world view, predicting, planning and acting.

Ch Fair Enough

Onze daden moeten in verhouding staan tot onze voornemens als we een optimaal resultaat willen bereiken.

165 About the utilitarian view that to amass wealth is in itself considered ‘good’. Here specific for the populace.

Ch belief in progress

Met onze verdienste verwerven we de waardering van achtenswaardige mensen, met onze voorspoed die van het volk.

230 About the inclination of people to copy other people’s behavior deeply rooted in human nature.

Ch mirror mirror

Niets is zo aanstekelijk als een voorbeeld. Onze grote weldaden brengen andere weldaden, onze grote misdaden andere misdaden voort. We bootsen weldaden na uit rivaliteit, en misdaden door onze boosaardige natuur die de gevangene was van schaamte, maar door het voorbeeld in vrijheid wordt gesteld.

249 About presentation.

Intonatie, oogopslag en voorkomen van de spreker zijn minstens zo welsprekend als de keus van zijn woorden.

256 About the inclination of people to copy other people’s behavior deeply rooted in human nature. See 230

Ch mirror mirror

Onder alle omstandigheden meten we ons uiterlijk het uiterlijk voorkomen aan van degene voor wie we willen doorgaan. Onze wereld is een wereld van toneelspelers.

270 About the role of reputation especially when it concerns moral decisions.

Ch All d

Behaalde eer staat borg voor eer die nog behaald moet worden.

302 About the human tendency to act on what things appear to be; to act on what things are is seen as risky and wise only if not much is at stake. About rationality?

Ch belief systems oid

We nemen alleen het risico ons niet door de schijn te laten bedriegen, als er weinig op het spel staat.

316 About the mechanism of power: if a difference in power exists then incentives exist that motivate the weaker person to follow that incentive, namely how the stronger persoon expects him to behave and as a consequence to behave differently than how he would have otherwise behaved.

Ch The trouble with harry, de veranderende macht van bedrijven

Wie zwak is kan niet oprecht zijn.

345 About the circumstances revealing our identity to others and to us. About the functions forcing us to show our identities in certain circumstances.

Ch darwinian identity: wagensberg quotes

Het zijn de omstandigheden die onthullen wie we zijn, niet alleen aan anderen, maar vooral aan onszelf.

375 About mediocre minds judging negatively on anything out of their reach. Useful?

Middelmatige geesten veroordelen gewoonlijk alles wat buiten hun bereik valt.

447 About manners (etiquette) as a model for behavior being held in high regard. Useful?

Van alle wetten is fatsoen de minst belangrijke, maar de meest gerespecteerde.

Uit de Weggelaten Maximen

14 About the moral rule that property is protected by the group and how it is rooted in the fear that our property is taken from us.

Ch cake eaters

Gevoel voor rechtvaardigheid is niet anders dan de angst dat ons bezit ons wordt afgenomen. Daarom hebben we diep respect voor de belangen van onze naasten, en vermijden we angstvallig hen schade te berokkenen. Deze angst houdt de mens binnen de grenzen van het bezit dat hem door geboorte of of een speling van het lot is toegevallen; zonder deze angst zou hij voortdurend het bezit van anderen najagen.

39 About the existence of order in an otherwise chaotic world that orients every thing to some orderly behavior and to follow its fate.

Ch order kauffman

Hoe onzeker en chaotisch de wereld zich ook aan ons voordoet, er is toch een zekere geheime samenhang in te ontdekken, een eeuwige orde die is vastgesteld door de Voorzienigheid, die maakt dat elk ding in de pas loopt en zijn eigen bestemming volgt.

45 About the need for a reputation of being retaliatory in the iterated games.

Ch all d

We kunnen alleen dan voortdurend het goed doen, als we anderen ervan kunnen overtuigen dat zij ons nooit ongestraft kwaad kunnen doen.

52 About early sign of the decline of nations (organisations). ?

Weelde en oververfijning zijn de zekere voortekens van staten in verval, want enkelingen die zich alleen om hun eigen belang bekommeren, keren zich af van het algemeen belang.

60 About the need for leadership?

Het verstandigste wat onverstandige mensen kunnen doen is zich aan de juiste leiding van anderen te onderwerpen.

Darwinian Philosophy


[Th. C. W. Oudemans and N. G. J. Peeters, Plantaardig – Vegetatieve Filosofie, KNNV Uitgeverij, 2014]

Find below some original clippings from the above book on the philosophy of Darwinism in general and the perception of plants in ecosystems. Some of them were used in my English book on the concept of the firm.

Dat mensen de natuur beschouwen als beheersings- en als beheersgebied – is dat vreemd of zelfs maar vermijdbaar? Helemaal niet, want mensen zijn levende wezens, en er zijn geen levende wezens die zich niet vermenigvuldigen. Wat zich vermenigvuldigt zal moeten proberen zijn omgeving naar zijn hand te zetten, op gevaar van uitsterven af. Mensen wijken ook in dit opzicht niet af van andere levensvormen. Ieder levend wezen beschouwt zichzelf als subject in zijn eigen wereld.‘ [Oudemans e.a. 2014, p 15]. metafysiche indeling van de natuur: je hebt planten die groeien en verwelken, maar niet voelen of streven, je hebt dieren die wel voelen of streven, maar niet nadenken, en je hebt mensen die niet alleen groeien, voelen en streven, maar ook nog eens nadenken. Omdat planten zo laag op de semantische ladder staan zijn ze zielloos, en daarmee nauwelijks medeschepselen van mensen. .. Planten bewegen maar zelden, en als zij dat doen dan meestal onzichtbaar voor het oog. Dat neemt niet weg dat zij een even actieve als intelligente verhouding met hun omgeving hebben – een verhouding waarop vervolgens alle dieren en alle mensen parasiteren’ [Oudemans e.a. 2014 p 16]

Ieder dier, dus ook iedere mens parasiteert direct of indirect op planten. Ook dieren en mensen leven van opgeslagen zonlicht, maar dat kunnen zij alleen door op planten te teren, al is het indirect, door elkaar te consumeren. .. Ook zijn ‘zelfstandig’ denken parasiteert op het plantaardige. Dit omgeeft alles wat ik erover te zeggen denk te kunnen hebben. De semantiek waarbinnen ik mijzelf in mijn verhouding tot de levende natuur zie is zelf weer van natuurlijke oorsprong – al kan ik die natuur niet maar zo tegenover mij plaatsen en bespreken‘ [ Oudemans e.a. p 21].

Darwin ziet het leven als een oever waarop alles wat leeft met elkaar verstrengeld en in elkaar verstrikt is. Dit betekent – een conclusie die Darwin niet trekt – dat ook het menselijk leven en daarmee het menselijke denken op hun eigen manier verstrikt zijn in en verweven met dezelfde oever. De oever is niet te overzien. Als filosoof denk ik hierbij na, terwijl ik er toch binnenin blijf.‘ [Oudeman e.a. 2014 p 23].

Een plant is geen plant wanneer hij zich niet vemenigvuldigt. Wat zich vermenigvuldigt, dat bestaat als reeks. Een reeks bestaat als zich voortzettende opeenvolging van kopiëen en is dus nooit definitief af- of aanwezig. Stopt de voortzetting, dan is het organisme dood. Stopt de voortzetting van een soort dan is die uitgestorven. Waar iets bestaat als zich voortzettende reeks kopiëen, daar zullen uiteenlopende varianten ontstaan, en wel zo dat aard en omvang van de variatie zelf niet te voorspellen valt‘ [Oudemans e.a. 2014 p 30].

Leibnitz spreekt van de opeenvolging der dingen die verspreid zijn over het universum van de levende wezens. Ieder levend wezen maakt deel uit van een serie die niet beëindigd is, zowel in de richting van het verleden als in de richting van de toekomst, series interminata. Leibnitz onderkent dat reeksen niet immuun zijn voor variatie. Wat leeft, dat plant zich voort, maar wat zich voortplant heeft de tendens om mutaties te genereren. Hij spreekt van een tendentia interna ad mutationem. In het wereldbeeld van Newton en Descartes is er uiteindelijk één mogelijkheid, en die wordt al dan niet gerealiseerd, en dat is de mogelijkheid van het universum zoals dat er nu uitziet. Dat dit universum zo is ontstaan en niet anders, is causaal bepaald – het had niet anders af kunnen lopen. Bij Leibnitz komt een heel ander universum naar voren, namelijk een wereld waarin telkens uiteenlopende mogelijkheden tegelijkertijd gerealiseerd worden. Maar dat kan zo niet blijven: er zijn teveel mogelijkhjeden die op hetzelfde moement vragen om een realisatie. En omdat deze mogelijkheden zich allemaal vermenigvuldigen zullen er varianten moeten afvallen. Er ontstaat steeds weer strijd (conflictus) .. Je kunt nooit zeggen da de beste variant gewonnen heeft. Het is onmogelijk om in de wereld van levende kopieën te maken te krijgen met een echt toereikende grond. De toereikende grond zou zich moeten bevinden buiten de opeenvolging van kopieën. .. Wie deze God niet aanneemt, die zal moeten aanvaarden dat er in deze wereld uitsluitend en alleen sprake is van ontoereikende gronden. Wat er is had anders kunnen zijn. Of het had er niet kunnen zijn. Of de omstandigheden veranderen, waardoor datgene wat vroeger verloor het misschien nu opperbest had gedaan. [Oudemans 2014 pp. 31-2].

De vraag naar de species of identiteit is de vraag naar het wezen van iets, maar tegelijkertijd ook de vraag naar de benaming daarvan. Kan ik in mijn benaming de echte aard van het ding zelf raken of niet?‘ [Oudemans 2014 pp. 31-2]. Het zoeken naar en het benoemen van Aristoteliaanse essentie van dingen. Linneaus nam ook het bestaan van essentiële soorten aan. Afwijkingen in voorkomen waren alleen het gevolg van bijzondere natuurlijke omstandigheden.

Hobbes valt met de deur in huis: dat namen arbitrair zijn – dat kan zonder verdere vragen worden verondersteld. Namen hebben wel de pretentie universeeel te zijn, maar uiteindelijk is die universaliteit niets anders dan het samenbrengen van allerlei concrete op elkaar lijkende gevallen (bijvoorbeeld van een madeliefje) onder een verzonnen noemer. .. Locke beseft: de levende natuur is niet zomaar in vaste species in te delen, zij is eindeloos transformeerbaar. Mensen classificeren twee paarden als behorend tot dezelfde soort, en een paard en een zebra niet. Maar dat is niet meer dan een pragmatische beslissing die niet gedicteerd wordt door welke werkelijkheid dan ook‘ [Oudemans 2014 p. 37]. Die benadering wordt conventionalisme of nominalisme genoemd: essentialisme is niet van toepassing op de natuur. Niet de genus bepaalt de aard van de plant maar andersom.

Met Darwin is een nieuwe mogelijkheid binnengetreden in de betekeniswereld die mens en natuur verbindt, namelijk dat noch de natuurlijke soorten noch de benamingen ervoor scherp van elkaar te scheiden zijn, en dat ze toch qua indeling niet willekeurig zijn, omdat er sprake is van verwantschapsrelaties die succes laten zien in de strijd om het bestaan. De scheidingen tussen de soorten zijn er wel, maar ze zijn vaag en poreus, en ze liggen, dankzij de variabiliteit van het levende en de onvoorspelbare wijzigingen in de omgeving, niet vooor eeuwig vast. Beide bestaan als variatie en daaropvolgende selectie van de overlevers, zonder dat de selectie ooit leidt tot een definitief resultaat, want de vermenigvuldiging en dus de variatie gaan door zonder einde‘ [Oudemans 2014 p. 41]

Co-evolutie van bloeiende planten en insecten (Darwin en de Saporta).

Wat leeft, dat vermenigvuldigt zich. En het varieert. Maar al die varianten kunnen op de eindig bewoonbare aarde niet tegelijkertijd blijven bestaan. Sommige varianten oveerleven, andere sterven uit. Dat gaat niet zomaar: daar is sprake van een confrontatie met de omgeving, waardoor de ene variant geschikter blijkt dan de andere. Dat heeft betekenis voor de manier waarop dieren en planten begrepen moeten worden. Zij zijn niet, zoals in de mathesis universalis verondersteld wordt, substanties of krachten, die zich vervolgens in een bepaalde entourage bevinden, maar zij bestaan als verhouding tot hun omgeving. Er is niet een levend wezen dat vervolgens een betekenisvolle relatie aangaat met andere levende wezens en de rest van de natuur, maar die relaties zijn bepalend voor de aard ervan. Dat wordt in dit boek het monadische ervan genoemd: monaden bestaan als spiegel van hun omgeving. .. Om te beginnen vormt ieder levend wezen een eigen perspectief op de wereld. Maar dan kan het niet langer restloos opgenomen worden in de menselijke kennis en beheersing van de natuur. Het zal blijken dat het nog vreemder is: mensen denken planten te manipuleren, maar het omgekeerde gebeurt even goed. .. Wanneer planten en bomen bestaan als hun verhoudingen tot hun omgeving, dan hebben zij een heel eigen begrenzing: zij kunnen de buitenwereld deels toelaten en de deels buitensluiten. Zij worden getekend doordat zij zijn omgeven door membranen. .. Niet ik hecht deze betekenis aan deze boom, dat doet hij zelf in samenspraak met zijn omgeving‘ [Oudemans 2014 pp. 54-5].

..levende wezens niet begrepen kunnen worden in de semantiek van de zelfstandige substanties en de zelfstandige subjecten. Levende wezens vormen namelijk zelf perspectieven op de wereld die ze omringt. Een substantie is geen zelfstandig zijnde, maar een eigen perspectief op de wereld, dat tegelijkertijd een spiegel is van diezelfde wereld. Dat noemt Leibnitz een monade. Spiegeling hoeft daarbij geen afbeelding te zijn – het kan gaan om afgestemd zijn van het een op het ander, zoals het oor aan een kopje is afgestemd op de hand van de theedrinker en een boomblad is afgestemd op het zonlicht.’[Oudemans 2014 p. 57]

Levende wezens vormen reeksen die zich vermenigvuldigen en muteren. Maar in een eindig bewoonbare wereld kunnen zij niet allemaal tegelijk blijven bestaan. Omdat er sprake is van meerdere gevarieerde reeksen wordt er differentieel overleefd, afhankelijk van de omgeving. De ene reeks verminigvuldigt zich meer dan de andere. Dat is de zin van het monadische van de levende natuur. De omgeving heeft betekenis voor het overleven van de reeks. De ene reeks is ‘rationeler’ dan de andere, want beter aangepast aan een bepaalde omgeving. De eigenschappen van de omgeving waarop organismen zijn afgestemd raken in de loop van de tijd in deze organismen geïnternaliseerd. Dat gebeurt keer op keer in de onafzienbare rij organismen die elkaars nakomelingen zijn. Dat houdt in dat je een levend wezen nooit los kunt zien van zijn omgeving en evenmin van zijn voorouders in hun omgeving’ [Oudemans 2014 p. 57-8].

De monadische aard van gewassen blijkt uit de verhouding tussen bomen, grassen en mensen. Ieder gewas wordt geconfronteerd met het vraagstuk: hoe voorkom ik dat ik word opgegeten en dat ik overschaduwd raak door mijn concurrenten. .. Gras verspreidt zich bijzonder snel. Het zet in op groei en verspreiding, niet op permanentie, zoals bomen. Gras groeit telkens aan, uit een goed verborgen knoop (vlak boven deze knoop bevindt zich een deelvaardig weefsel – intercalair meristeem – van waaruit nieuwe stengelleden groeien) die niet gemakkelijk op te eten is. Het kan zich niet vermenigvuldigen zonder de grote hoefdieren die het opeten en verspreiden. De hoefdieren zijn op hun beurt zijn aangepast geraakt aan gras: van hun maag tot aan hun gebit zijn zij erdoor getekend. Gras en het merendeel van de hoefdieren zijn met elkaar verweven – niet los van elkaar te denken. Mensen behoren tot deze vergraste soorten (aangezien ze door mensen worden gebruikt en geconsumeerd DPB). [Oudemans 2014 p. 60]

De voorheen vaste identiteiten van levende wezens blijken poreus, veranderlijk en onoverzichtelijk te zijn. Bij planten is dit nog extremer dan bij dieren: de individualiteit daarvan is onzeker en volatiel‘ [Oudemans 2014 p. 62]

De dominante soorten raken geadapteerd aan uiteenlopende plaatsen in de economie van de natuur (note 235). Darwin’s inzicht is te danken aan de semantiek van de monade. Een levend wezen is alleen een levend wezen wanneer het zich in een omgeving bevindt, in een over en weer ermee. Varianten van planten overleven wanneer zij nieuwe omgevingen vinden, niches, die voor deze bewoonbaar zijn en voor de andere variant niet. Anders geformuleerd: de strijd om het bestaan vergt een strijdperk. Wanneer het strijdperk waarbinnen gestreden wordt muteert, muteert ook de strijd. Wie geschikt is vooor het ene strijdperk kan verliezen in het andere’ [Oudemans 2014 p. 68].

Overal waar leven is, daar bestaan half doorlatende grenzen, membranen, op alle niveaus. Van onderdelen van cellen via cellen als geheel, via onderdelen van organismen zoals bladeren naar organismen als geheel, van regenwouden naar de aarde als geheel, overal houden membranen het onderscheid in stand tussen de binnenzijde en de buitenkant, veelal van energetische aard… In Leibnitz’ wereld van varianten en toeval bleek later entropie een hoofdrol te spelen. Die houdt in: laat een gesloten systeem zijn gang gaan en de daarin bestaande verschillen in energie zullen worden opgeheven. De ordening van het systeem tendeert naar wanorde. Waarom? Omdat er veel meer wanordelijke dan ordelijke mogelijkheden voor het systeem bestaan. De statistische mogelijkheid dat een systeem wanordelijk wordt is enorm groot‘ [Oudemans 2014 p. 73]

Wanneer een blad helemaal open zou staan naar de buitenwereld, dan zou het vervloeien en opgaan in zijn omgeving. Wanneer een blad helemaal gesloten zou zijn, dan zou het direct het lot ondergaan, dat het nu enige tijd uit weet te stellen, namelijk dood zijn, overeenkomstig het beginsel van de entropie‘ [Oudemans 2014 p. 73].

De natuur is een strijd van mogelijkheden, die nu eenmaal niet allemaal verwerkelijkt kunnen worden. Dat houdt in dat de grond waarom iets er is en iets anders niet, niet beperkt kan worden tot werkoorzaken – de (dat DPB) dingen een verandering in beweging bewerkstelligen door tegen andere aan te stoten. Er is sprake van restricties die ervoor zorgen dat de ene mogelijkheid verwerkelijkt wordt en de andere niet. .. dat restricties niet alleen begrepen kunnen worden als beperkingen die mogelijkheden afknijpen. Zij sluiten mogelijkheden uit en juist daardoor worden nieuwe mogelijkheden vewezenlijkt. Iedere zet (op een schaakbord) begrenst het aantal mogelijke tegenzetten, en juist daardoor kunnen er prachtige en ongekende patronen op het schaakbord ontstaan.’ [Oudemans 2014 p. 77].

Het leven op aarde is niet in evenwicht. Voortdurend moet energie worden opgenomen uit de omgeving en weer worden afgestoten. Er moet een energetisch verschil gehandhaafd blijven tussen een levend wezen en zijn omgeving. En toch: levende wezens die naar hun aard ‘far-from-equilibrium’ zijn, zijn niettemin uiterst stabiel. Veel plantaardige en menselijke genen zijn letterlijk miljarden jaren oud. Terwijl de wind en de golven van entropie alles op aarde eroderen behoudt het leven zijn onevenwichtige stabiliteit over kosmische tijdsspannen.‘ [Oudemans 2014 p. 79].

De mechanische reductie lijkt in eerste instantie aan levende wezens nu juist hun leven te ontnemen. Een plant wordt tot machine gereduceerd en dat is een plant niet. .. Maar uiteindelijk is niet de objectieve werkelijkheid primair, maar. Zoals Leibnitz heeft laten zien, het over en weer tussen mij en de plant. .. Dat is het punt dat Heidegger naar voren heeft gebracht. Je kunt een boom wel begrijpen als machine, maarmee heb je nog geen zicht op de verhouding tussen het plantaardige en het menselijke. Wat een boom is en wat ik zelf ben, hoe het plantaardige mede bepalend is voor mijn eigen identiteit – dat alles betreft de manier waarop de een de ander tegemoet treedt. De aard van dit tegemoet treden is semantisch, ligt niet in de feiten en de wetmatigheden aan de objectzijde, maar in het over en weer, waarbinnen de feiten en wetmatigheden zich afspelen.‘ [Oudemans 2014 p. 87].

Kenmerkend voor de overgeleverde semantiek is dat levende wezens op de een of andere manier zelf handelen. Zij hebben het begin van hun beweging in zichzelf, zoals Aristoteles het uitdrukt. Maar dat is bij planten maar in beperkte mate het geval. Zij kunnen niet denken, zij kunnen niet waarnemenen dus nergens naar streven en zij kunnen niet van hun plaats komen, zegt Aristoteles. Het enige wat een plant kenmerkt is het soort beweging dat samenhangt met voeding, groei en ontbinding. .. Planten staan op een lage tree van ontwikkeling, die loopt van planten via strevende en voelende dieren tot aan de denkende mens. Deze semantiek beheerst het moderne Europese denken tot in de huidige tijd. .. Dankzij het Darwinisme is het aristotelisme zo vanzelfsprekend niet meer. Planten verkeren allerminst in de comateuze toestand die ze wordt toegedicht. De bewegingen van planten zijn dikwijls zo traag dat zij verborgen blijven voor de menselijke blik. Zij leven in een andere tijdsschaal.‘ [Oudemans 2014 pp. 88-9]. Er zijn legio voorbeelden bekend van de activiteiten van planten die erop zijn gericht invloed uit te oefenen op hun plantwardige of dierlijke omgeving [Oudemans 2014 pp. 89-100].

Een automaat is een machine die zichzelf in stand houdt en zichzelf vermenigvuldigt. Dat kunnen chemische machines, maar mechanische niet. Zo bezien hebben mensen nog nooit een automaat vervaardigd, terwijl alle levende wezens in deze zin automaten zijn. .. Mensenmachines hebben altijd mensen nodig om in stand te blijven en zich te vermenigvuldigen. Zij zijn niet echt autark, geen echte automaten, zoals Leibnitz verduidelijkt heeft.‘ [Oudemans 2014 p. 105].

Nature abhors self-fertilisation, nature abhors self-pollination’ [Wallace, Darwin in Oudemans 2014 p. 108] wereld is niet causaal bepaald, maar is een strijd tussen zich vermenigvuldigende reeksen mutanten, waarbij telkens selectie plaatsvindt. Daar komt geen doel aan te pas, terwijl in de strijd om de vermenigvuldiging toch telkens datgene komt bovendrijven wat op dat moment functioneel is. Functioneel wil niets anders zeggen dan: onder bepaalde omstandigheden overleeft de ene variant talrijker dan de andere‘ [Oudemans 2014 pp. 109-10]

Dawkins heeft het duidelijk gemaakt. Genen manipuleren de wereld. Het is alsof zij een doel hebben, namelijk hun overleving te maximaliseren. Maar dat doen zij niet. Het is eenvoudig zo dat de varianten met de meeste overlevers overleven. Doelen en strevingen komen er niet aan te pas. Maar dat is voor mij als individu, als werktuig van het genoom, niet anders: individuen streven er niet bewust naar om wat dan ook te maximaliseren; zij gedragen zich alsof zij iets maximaliseren. ..

Mensen zien zich graag als wezens die doelbewust, doelgericht of doelmatig zijn. Dat is een uitvloeisel van de subject-objectgedachte. Als blijkt dat de wereld monadisch is, een over en weer van perspectieven en communicatie, dan is het beter om te spreken van aantrekkingskracht. Dat zegt iets over de verhouding tussen het ene wezen en het andere. Aantrekkingskracht heeft al gauw betekenis voor beide perspectieven: x oefent aantrekkingskracht uit op y (waarbij het er niet zoveel toe doet of x daar zelf ook weet van heeft). Dat kan in het voordeel van y zijn, maar ook van x. Wat mij een eigen doel toeschijnt, dat is de aantrekkingskracht van een aantrekkelijk wezen‘ [Oudemans 2014 p. 110].

De menselijke cultivering is naar haar aard erop gericht alles wat onzuiver is uit te bannen, teneinde zich te verzekeren van maximale beheersing tegen alle verwilderende invloeden. Mensen hebben harde, ondoordringbare scheidingen nodig, geen half doorlatende membranen. Dat blijkt op allerlei manieren, om te beginnen bij de taal die mensen bezigen: in het voorgaande werd duidelijk hoezeer Linnaeus gedreven werd door het verlangen naar zuivere en ondoordringbare categoriseringen.‘ [Oudemans 2014 p. 124].

Iedere keer dat een oude appelvariëteit wegvalt uit de cultivering is een pakket van genen – dat wil zeggen een pakket kwaliteiten van smaak, kleur en textuur, en van bestendigheid tegen parasieten – van de aarbodem verdwenen[M. Pollan, The Botany of Desire: A Plant’s Eye View of the World, 2001 p. 57 in Oudemans 2014 p. 130]

Wij speelden van onze kant onze rol. Wij vermenigvuldigden de bloemen buiten alle proportie. Wij verplaatsten hun zaden de planeet rond, wij schreven bnoeken om hun roem te verspreiden en hun geluk zeker te stellen. Voor de bloem was het hetzelfde oude liedje. Weer een grote evolutionairre deal met een willig, lichtgelovig dier[M. Pollan, The Botany of Desire: A Plant’s Eye View of the World, 2001 p. 119 in Oudemans 2014 p. 137]

Scrabbelen met alleen Q-s en X-en.

Geen herder en één kudde. Ieder wil hetzelfde, ieder is gelijk: wie anders voelt gaat vrijwillig het gekkenhuis in’. .. Geen mens die zich druk maakt over bureaucratisering, onderlinge afhankelijkheid, vernietiging van ‘privacy’, overlevering aan sociale media en vooral: overgeleverd zijn aan een almachtige, overal doordringende, alwetende staat, die vrijwel alles heeft opgeslokt wat voorheen als een menselijk bestaan heeft gegolden, zonder dat dit doordringt tot zijn burgers.[‘Also Sprach Zarathustra, p. 20 in Oudemans 2014 p. 142′, Oudemans 2014 p. 142]