Firms, in most cases, cannot be described adequately as if they were an individual person. And ye... more Firms, in most cases, cannot be described adequately as if they were an individual person. And yet, they learn, anticipate, decide, and adapt in order to survive in an uncertain environment. To deal with such aspects of a firm, the theory of the anticipatory system is developed and applied to the specific case of the multiperson firm (one in which knowledge of the firm's environment and capabilities is distributed among the people in the firm) operating in a market environment in which product design and timeconsuming production entail anticipation of an uncertain future and in which this very uncertainty means that adaptive responses will be required as experience accumulates. An important side-effect of this analysis is the recognition that "entrepreneurship" is not a single activity or capability-it is exhibited in different forms and in different places both within the firm and in the encompassing market.
It is widely acknowledged by both historians and scientists that in the course of the 17 th centu... more It is widely acknowledged by both historians and scientists that in the course of the 17 th century in Western Europe a new way of thinking about nature and knowledge took hold and new methods of obtaining knowledge of nature were proposed and tried. The spectacular success of this new science was recognized even at the time, and the genius of its leading practitioners was widely appreciated. There had been brilliant upsurges in scientific activity in various times and places before this, but this episode is unique in that, rather than lapsing into stasis or abandonment, it has continuously grown in both results and participants to the point where it is an integral part of modern civilization. Many reasons have been proposed for the origin and the success of the new science, but none convincingly address why this scientific revolution should have the staying power that others have not. The hypothesis developed here is that the innovations of the 17 th century-changes in methodology, epistemology, ideology, and institutions-coalesced to form a radically new social arrangement in the form of a self-maintaining system of scientific processes, an arrangement that can be formally described as an anticipatory social system.
Legislatures in modern democratic nation states are social arrangements in which individuals elec... more Legislatures in modern democratic nation states are social arrangements in which individuals elected as representatives interact with each other and with professional lobbyists according to quite specific transactional modes, producing continually updated bodies of legislation. It is widely assumed that the purpose of such legislation is or should be to benefit the society to which it applies, at least on balance. But analysis of the epistemic limitations of legislators, studies of the potential for opportunism enabled by the types of transactions that take place within legislatures, and empirical documentation of so-called "government failure" create doubt as to the validity of that assumption, and raise the question of how such a social arrangement can not only survive but grow in its influence over society. It is suggested that better understanding of this phenomenon can be had if the assumption of purpose, inappropriate for a complex social arrangement in that it conflates systemic purposes with ones appropriate for individuals, is abandoned and the legislative system's operation is examined in terms of the overall organization of the processes which take place within it.
The approach of some systems biologists, Robert Rosen in particular, to the understanding of biol... more The approach of some systems biologists, Robert Rosen in particular, to the understanding of biological systems calls for a focus on the organization of the processes internal to such systems, rather than on equilibrium states characterized in material terms and their state transitions viewed as taking place according to dynamical laws. A similar approach is possible for social systems. It is shown that the basic processes operative in both markets and science can be understood as being organized such that these systems exhibit material openness, process closure in the sense of a complete causal cycle, and anticipation based on the maintenance of an internal model of the system’s environment.
Purpose -First, to look closely and critically at Hayek's treatment of science in The Sensory Ord... more Purpose -First, to look closely and critically at Hayek's treatment of science in The Sensory Order. This provides hints as to the difficulties in maintaining a theory of scientific knowledge as a selective sum of the identifiable contributions of individual scientists. Second, to generalize from Hayek's theory of how the brain generates an individual's knowledge to a theory of how science generates scientific knowledge, knowledge that is not a simple sum of individual contributions. Third, to apply this picture of science to understanding developments in postpositivist philosophy and post-Mertonian sociology of science.
We treat science as a Hayekian social order whose distinctive emergent characteristic is the gene... more We treat science as a Hayekian social order whose distinctive emergent characteristic is the generation of knowledge. We model modern science as an institutional form that principally relies on publication with citation and its effects on individual reputation in order to study the possible effects of funding on science. We develop a taxonomy of three broad categories of effect: those having to do with the direction followed by scientific activity, those involving the operational and financial stability of both the physical institutions integral to scientific work and the scientists themselves, and those due to distortions of the basic knowledge-generating procedures of science. It is argued that, while directional effects of funding are ubiquitous, destabilizing and distorting effects are much more likely to emerge when funding sources are concentrated than when they are decentralized. Further, when funding is accompanied by regulatory oversight, the possibilities for distortion are significantly increased. Examples of such effects actually occurring under the current U.S. funding regime are discussed.
Hayek's cognitive theory, which seeks to describe the operation of a particular order, in fact pr... more Hayek's cognitive theory, which seeks to describe the operation of a particular order, in fact provides a paradigmatic account of knowledge-generating orders in general. We claim that this paradigm provides a fertile conceptual framework for exploring a variety of problems in economics and social theory. In particular, we shall show that Hayek's conception of the 'map' and the 'model', which he uses to explain the operation of the complex adaptive classifying system called 'mind', are promising analytical devices with applications extending to social structures of various kinds and complexity. We use Hayek's notion of the map and model to analyze how different social structures -regarded as classifying systems -work in terms of their input, processing, and output capabilities. The adaptive characteristics of such systems, via communicative routines, multi-level classification, and feedback, form central motifs for our discussion of markets, science, and other social structures. We show that by analyzing the knowledge-generating characteristics of such structures we are also able to gain insights about the circumstances affecting their adaptive properties.
Many social orders can be understood as instances of adaptive systemscomplexes of active componen... more Many social orders can be understood as instances of adaptive systemscomplexes of active components whose interactions implement a persistent but mutable network-like structure which is adaptable to the characteristics of its environment to which it is sensitive. This general model of social structure, being neither exclusively reductionist in that it encompasses emergent phenomena and adaptive reactions at the system level, nor exclusively holistic in that it pays due attention to the lower-level interactions which drive the system, can serve as a fertile source of novel ideas for investigating a range of social complexes and attempting to understand the particular architecture of each and its adaptability and stability characteristics when subjected to environmental pressures of various sorts.
Economists approaching the study of science typically assume the applicability of a market analog... more Economists approaching the study of science typically assume the applicability of a market analogy, but then base their analysis on the presumption that science constitutes an area of pervasive market failure. Given the interactions that are actually observed to occur between scientists, we suspect that the failure is in the analogy, not in the putative market. In considering how one might better apply the economic way of thinking to the understanding of science as an activity, we suggest that it is necessary to specify exactly how scientific interaction differs from market interaction, and to be clear about how the behavior of interacting scientists might be modeled in terms of the general pursuit of self-interest in a noncatallactic context. Our model of science portrays an institutionalized mode of interaction between scientists involving the publication, use, and citation of scientific papers, and it is in the exploration of the individual incentives thrown up by this arrangement that the interesting empirical implications arise. We give a short exposition of the possible lines of investigation that could be followed based on this approach.
We survey the relationship between government and science (concentrating on the situation in the ... more We survey the relationship between government and science (concentrating on the situation in the U.S.). We discuss the theoretical rationale for government funding, showing that it is open to serious question -its model of science as market is highly suspect, and its implications for the remedial effects of intervention do not stand up to even casual empirical scrutiny. Calling attention to the nakedness of the standard economic rationale, however, does not touch the very real political rationales, and it is the interaction of these with the understandably strong desire of scientists to be well-funded to which we direct attention. We describe various ways in which government funding can interact with scientists and scientific activity to produce the unanticipated effects that concern us.
Economists approaching the study of science typically assume the applicability of a market analog... more Economists approaching the study of science typically assume the applicability of a market analogy, but then base their analysis on the presumption that science constitutes an area of pervasive market failure. Given the interactions that are actually observed to occur between scientists, we suspect that the failure is in the analogy, not in the putative market. In considering how one might better apply the economic way of thinking to the understanding of science as an activity, we suggest that it is necessary to specify exactly how scientific interaction differs from market interaction, and to be clear about how the behavior of interacting scientists might be modeled in terms of the general pursuit of self-interest in a noncatallactic context. Our model of science portrays an institutionalized mode of interaction between scientists involving the publication, use, and citation of scientific papers, and it is in the exploration of the individual incentives thrown up by this arrangement that the interesting empirical implications arise. We give a short exposition of the possible lines of investigation that could be followed based on this approach.
The possible effects of funding on science are characterized, and three broad categories of effec... more The possible effects of funding on science are characterized, and three broad categories of effect are identified: those having to do with the direction followed by scientific activity, those involving the operational and financial stability of both the physical institutions integral to scientific work and the scientists themselves, and those due to distortions of the basic knowledge-generating procedures of science. It is argued that, while directional effects of funding are ubiquitous, destabilizing and distorting effects are much more likely to emerge when funding sources are concentrated than when they are decentralized. Further, when funding is accompanied by regulatory oversight, the possibilities for distortion are significantly increased. Examples of such effects actually occurring under the current U.S. funding regime are discussed.
Hayek’s cognitive theory, which seeks to describe the operation of a particular order, in fact pr... more Hayek’s cognitive theory, which seeks to describe the operation of a particular order, in fact provides a paradigmatic account of knowledge-generating orders in general. We claim that this paradigm provides a fertile conceptual framework for exploring a variety of problems in economics and social theory. In particular, we shall show that Hayek’s conception of the ‘map’ and the ‘model’, which he uses to explain the operation of the complex adaptive classifying system called ‘mind’, are promising analytical devices with applications extending to social structures of various kinds and complexity. We use Hayek’s notion of the map and model to analyze how different social structures – regarded as classifying systems – work in terms of their input, processing, and output capabilities. The adaptive characteristics of such systems, via communicative routines, multi-level classification, and feedback, form central motifs for our discussion of markets, science, and other social structures. We show that by analyzing the knowledge-generating characteristics of such structures we are also able to gain insights about the circumstances affecting their adaptive properties.
an anonymous referee for helpful suggestions on an earlier draft. The usual caveat applies. 1 Abs... more an anonymous referee for helpful suggestions on an earlier draft. The usual caveat applies. 1 Abstract F.A. Hayek's theoretical psychology was developed in his 1952 book, The Sensory
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