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Aligica, Paul Dragos; Wagner, Richard E.
The Review of Austrian economics, 09/2020, Letnik: 33, Številka: 3Journal Article
Simple observation presents two stylized facts that call for integration into a single explanatory framework. One fact is that societies reflect generally though certainly not perfectly coordinated patterns of activity. The other fact is that only a subset of those activities is coordinated with the direct assistance of market prices. Price-theoretic explanations of how prices serve to secure economic coordination are thus incomplete because contemporary environments feature significant expanses of territory where market pricing has little presence. We refer in this respect to territory occupied both by non-profit enterprises and by political enterprises. In this paper we explore how societal coordination can occur when market pricing covers but a subset of the range of economic activities within a society. A key feature of our explanation is the network architecture of enterprises within a society.
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