When Paul Krugman writes a blog post that is more academically oriented, he always labels it as ‘wonkish’ in an attempt to protect his general interest readers. So in that spirit, this post is ‘wonkish’. Very wonkish. Which is ironic given my exhortation for clarity yesterday, but that’s the way it goes…
I quite like the collaborations between Nicolai Foss and Teppo Felin, I think in part because they come at problems from different academic backgrounds in a way that ends up being productive. This difference in approaches leads to a bit of friendly rivalry between the two blogs to which they contribute. Foss & company on the Organizations & Markets blog have been on the warpath against fuzzy concepts in management studies – the latest target being the idea of routines. Teppo’s collaborators at orgtheory.net responded to this by saying that all social science concepts are fuzzy, to some extent.
The debate is interesting to me because right now I’m working with two core constructs that are pretty fuzzy, and often used so inclusively that you could rightly ask whether they’re meaningful at all. The first is the micro-meso-macro framework developed by Kurt Dopfer, John Foster & Jason Potts. I’m writing a paper with Jason & Mark Dodgson right now using this idea to explain the evolution of Innovation Systems. When Mark asked me what a meso rule was and I tried to explain it, he replied ‘but then everything is a meso rule!’ Without going into huge detail, that is basically correct.
The second fuzzy concept is ‘network’ – which has been used to describe nearly everything. I’m working on a relatively broad theory of explaining all economic actions through a network lens, which again is a pretty broad task. Too broad, perhaps.
I was thinking about these two ideas over the weekend, when I realised why it’s maybe not a problem that in both cases the ideas are used to explain everything. I think that this broadness is a problem when we think that just explaining a category idea is sufficient. In other words, if we say ‘everything is a network’, that is fairly facile and doesn’t really explain anything at all. This is where we need to borrow research approaches from biology. I’ve had several people react negatively to the idea of ‘evolutionary economics’ because they don’t see the value in it as a metaphor, or because they get really hung up on questions like ‘what is the economic equivalent of a gene then?’ I’m thinking now that ‘evolutionary economics’ isn’t most useful as a metaphor though – but rather as a method. So these broad concepts like meso rules and networks are actually equivalent to biological classes, like species.
Biologists hardly ever write about ideas like species in the way that management scholars write about ideas like routines. Biologists take it as given that everything they study is a species of some sort – they are much more interested in figuring out how species are different (description), how they’re related (classification), and how they change over time (evolution). I think that these are the three questions we need to be asking about our economic ideas like routines, meso rules & networks.
Here’s an example, ever since Coase we’ve been talking about two main forms of organisation: markets and hierarchies. Recently, people have also started talking about ‘networks’ as a third form. Most of the discussion has bothered me because the ‘network’ form of organisation seems to be very poorly defined, and while I’m in favour of elevating the importance of the network concept, this approach seems pretty fuzzy to me. I think it would be more useful to define the different forms of organisation as networks, and then look at the three questions of description, classification and evolution. From this perspective, the three forms have different network structures through time, which leads to differences in classification. Markets have distributed control, and no persistent ties. Hierarchies have persistent ties, and local control. The things being described as network organisations are interesting because they have distributed control, but persistent ties. That is the paradox, and that’s what makes them interesting (this is also why the persistent market ties are interesting!).
I’m probably not explaining this well, but part of what I wanted to do was to try to figure out what I’m thinking about this by writing it out. Definitely a work in progress. And I’m sure someone has had this idea some time before I have. In any case, I think the takeaway message is that broad theoretical concepts are not automatically bad. It’s just that if we have these broad concepts we have to realise that just defining them is insufficient, and mostly uninteresting. We have to figure out how to research them like biologists – by figuring out how to distinguish between different examples of the class of things, showing how they’re related to each other, and, most importantly, studying how they evolve over time.