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Economics and the Diffusion of Communication and Information Technologies: Joseph Schumpeter and the Self-organisation Approach
Abstract
Economic motivations and economic processes play a key role in the emergence and diffusion of communication and information technologies. The objective of this paper is to offer an economic approach which is better suited to understanding such motivations and processes within an interdisciplinary context than the conventional, equilibrium-oriented, perspective. It is argued that many modern ‘neoclassical’ economists, stressing competition, have little in common with the old ‘classical’ tradition in economics, which was based on synergies. The ideas of Joseph Schumpeter are highlighted as a distinct alternative to neoclassical economics and viewed from a self-organisational perspective. It is explained that self-organisation in the economic domain is a related, but different, process to that identified by Ilya Prigogine in physio-chemical contexts. In particular, knowledge and informational considerations become central. A modelling strategy that can track self-organisational growth processes and provide an assessment of their structural stability is discussed.
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NOTES AND REFERENCES
Alfred Marshall, Principles of Economics (London, Macmillan, 1961), 9th Edn., pp. 138–139.
Brian J. Loasby, ‘Knowledge and Organisation: A Post-Marshallian Research Programme’, Mimeo, Department of Economics, University of Stirling, pp. 5–6, 1990.
Robert E. Babe, ‘Economics and Information: Toward a New (And More Sustainable) Worldview’, Canadian Journal of Communications, 21, 1996, pp. 161–178.
Don M. Lamberton, ‘Information Economics: ‘Threatened Wreckage’ or New Paradigm’, in: Ulf Himmelstrand (Ed.), Interfaces in Economic and Social Analysis (London, Routledge, 1992).
John Foster, Evolutionary Macroeconomics (London, Allen and Unwin, 1987).
Elias L. Khalil, ‘Non-linear Dynamics Versus Development Processes: Two Kinds of Change’, The Manchester School LXIV, 3, 1996, pp. 309–22.
Ibid.
William Baumol & James Benhabib, ‘Chaos, Significance, Mechanism and Economic Analysis’, Journal of Economic Perspectives, 3, 1, 1989, pp. 77–105.
M. J. Feigenbaum, ‘Universal Behaviour in Nonlinear Systems’, Los Alamos Science, 1, 1981, pp. 4–27.
Khalil, op. cit, Ref. 6.
For example, in population ecology: Robert M. May, ‘Simple Mathematical Models With Very Complicated Dynamics, Mature, 261, 1976, pp. 459–467.
John Foster, ‘The Analytical Foundations of Evolutionary Economics: From Biological Analogy to Economic Self-organisation’, Department of Economics, University of Queensland, Discussion Paper No. 198, May 1996.
Athol Fitzgibbons, Adam Smith's System of Liberty, Wealth and Virtue (Oxford, Clarendon Press, 1995).
Babe, op. cit, Ref. 3.
It is argued in J. Foster, ‘Economics and the Self-organisation Approach: Alfred Marshall Revisited?’, The Economic Journal, 103, 1993, pp. 975–91, that this ‘development’ vision of economic evolution was more central to his thinking than his suggestions that competition might be captured in Spencerian or Darwinian terms.
Thorstein Veblen, ‘Why is Economics Not an Evolutionary Science?’, The Quarterly Journal of Economics, 12, 1898, pp. 374–397.
Armen A. Alchian, ‘Uncertainty, Evolution and Economic Theory’, Journal of Political Economy, 58, 1950, pp. 211–222.
It is interesting to note, in this regard, that in neoclassical economics, the theory of comparative advantage, underpinning the gains from trade, has hardly changed in fifty years while there has been enormous development in competitive theory, culminating in a large rise in the use of game theory in economics in the 1980s.
Geoffrey Hodgson, Economics and Evolution: Bringing Life Back to Economics (Cambridge, Polity Press, 1993).
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Joel Mokyr, The Lever of Riches (New York, Oxford University Press, 1990).
Ibid.
J. Stanley Metcalfe, ‘Competition, Fisher's Principle and Increasing Returns in the Selection Process’, Journal of Evolutionary Economics, 4, 1994, pp. 327–346.
Babe, op. cit., Ref. 3.
Kurt Dopfer, ‘The Phenomenon of Economic Change: Neoclassical vs Schumpeterian Approaches’, in: L. Magnusson (Ed.), Evolutionary and Neo-Schumpeterian Approaches to Economics (Boston, Kluwer, 1993), pp. 125–172.
Ibid., 137.
Joseph A. Schumpeter, Capitalism, Socialism and Democracy (London, Allen & Unwin, 1943), p. 83.
Joseph A. Schumpeter, The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest and the Business Cycle (Cambridge, Harvard University Press, 1949), p. 64.
Joseph Schumpeter, Theorie der wirtschaftlichen Entwicklung (Leipzig, Dunckar and Humbolt, 1912), p. 479.
Ibid., p. 480.
Foster, op. cit., Ref. 12.
John Foster & Phillip Wild, ‘Economic Evolution and the Science of Synergetics’, Journal of Evolutionary Economics, 6, 3, 1996, pp. 239–260.
See Ilya Prigogine and Isabella Stengers, Order out of Chaos (London, Heinemann, 1984).
John Foster, ‘The Self-organisation Approach in Economies’, in: S. Burley & J. Foster (Eds.), Economics and Thermodynamics: Mew Perspectives on Economic Analysis (Boston, Kluwer, 1994), pp. 183–202.
John Foster & Phillip Wild, ‘The Logistic Diffusion Approach to Econometric Modelling in the Presence of Evolutionary Change’, Department of Economics, University of Queensland, Discussion Papers, No. 181, September 1995, and ‘Detecting Evolutionary Change in an Augmented Logistic Diffusion Econometric Model Using Time-varying Spectral Methods’, Department of Economics, University of Queensland, Discussion Papers, No. 192, February 1996.
T. Lawson, ‘Abstraction, Tendencies and Stylised Facts: A Realist Approach to Economic Analysis’, Cambridge Journal of Economics, 13, 1989, pp. 59–78.
See Richard Foster, Innovation (New York, Summit Books, 1986).
Babe, op. cit., Ref. 3.