Economic Coordination within a Mixed Ecology of Enterprises: Erasing a Theoretical Antinomy

Abstract

Economic theory contains a significant theoretical antinomy that we seek to erase. That theory can account for coordination through markets. Such coordination, however, covers only some 50-60 percent of economic activity within developed nations. The theory ignores the remainder by presuming that it is provided somehow through the insertion of collective planning and power. We seek to erase this common theoretical antinomy by locating political action within the transactional framework of market interaction. All economic activity, whether pursued by private or collective entities, occurs within a framework of incomplete and distributed knowledge. A significant precursor to our effort is Maffeo Pantaleoni’s (1911) recognition of the parasitical character of political pricing, where political entities calculate through parasitical attachment to market entities. We use a simple model of coordination within an airport to illustrate our approach to economic coordination among differently constituted enterprises.

Keywords: economic calculation; economic coordination; public-private interaction; parasitical political pricing; entangled political economy

JEL Classification: D23, D73, H44, L32