The Origin of Organizational Species
"THE EVOLUTION OF ECONOMIC DIVERSITY", Routledge, London and New York, Forthcoming
Posted: 12 Apr 2000
In spite of its title, in the midst of his numerous achievements, Darwin's book was unable to "solve" the problem of "speciation" that is the problem of the origin of species. We survey the modern biological literature and we argue that it has shown that the laws of structure and change that characterise the selection among species are very different from those that characterise the selection of the members of the same species. In particular, even when the new species would be better adapted to the environment, strong forces of natural selection - due to the existence of a large population belonging to the "old species" - can inhibit rather than favour speciation. We argue that similar problems may arise for the emergence of new "organisational species". Like natural species organisations are characterised by "epistatic relations" (or complementarities). A property right system may be the best only relatively to a certain technology and vice versa a certain technology may be the best only relatively to a certain system of property rights. Thus, when the pressure of competition is strong, one-by-one changes, leading to speciation, can be problematic in both natural and economic history. We apply this framework to the analysis of the "Second Industrial Revolution". Managerial capitalism was developed in Germany and the United States. By contrast, for a long time, it could not emerge in Britain. We argue that this may be due to the fact that Britain had been the centre of the first industrial revolution. It was the country that had the largest population belonging to the "old species" of the family capitalism that had emerged during the first industrial revolution. The strong competition among the members of the "old species" inhibited the speciation of "managerial capitalism".
JEL Classification: D2, P1, N8, B0, L2
Suggested Citation: Suggested Citation