The Self-Organizing Society: The Role of Institutions
This paper was presented at the 2016 Conference of the World Interdisciplinary Network for Institutional Research (WINIR) held in Boston on 3-6 September 2016.
38 Pages Posted: 20 Sep 2016
Date Written: September 19, 2016
Is it possible to constrain a human society in such a way that self-organization will thereafter tend to produce outcomes that advance the goals of the society? Such a society would be self-organizing in the sense that individuals who pursue only their own interests would none-the-less act in the interests of the society as a whole, irrespective of any intention to do so. I sketch an agent-based model that identifies the conditions that must be met if such a self-organizing society is to emerge. The model draws heavily on an understanding of how self-organizing societies have emerged repeatedly during the evolution of life on Earth (e.g. evolution has produced societies of molecular processes, of simple cells, of eukaryote cells and of multicellular organisms). The model demonstrates that the key enabling requirement for a self-organizing society is ‘consequence-capture’. Broadly this means that all agents in the society must capture sufficient of the benefits (and harms) that are produced by the impact of their actions on the goals of the society. If this condition is not met, agents that invest resources in actions that produce societal benefits will tend to be out-competed by those that do not. This ‘consequence-capture’ condition can be met where a society is managed by appropriate systems of evolvable constraints that suppress free riders and support pro-social actions. In human societies these constraints include institutions such as systems of governance and social norms. If a self-organizing society is to emerge, consequence-capture must occur for all agents in the society, including those involved in the establishment and adaptation of institutions. By implementing consequence-capture, appropriate institutions can produce a self-organizing society in which the interests of all agents (including individuals, associations, firms, multi-national corporations, political organizations, institutions and governments) are aligned with those of the society as a whole.
Keywords: institutions; self-organization; self-organizing society, consequence-capture, vertical market, invisible hand, enabling constraints
JEL Classification: B52, D02, D70, E02, F55, H10, H40, P00, P16, P26, P41,
Suggested Citation: Suggested Citation