ABSTRACT OF PAPER
Title: Knowledge, Organisation and the Firm: A Historical Perspective
Author: Loasby Brian
This paper seeks to illuustrate the problems and processes of developing economic knowledge by a selective historical treatment of ideas about the firm. Suggesting why it was Coase who first identified the need to explain the existence of firms as organisations, we note his failure to ask why firms should emerge as distinctive productive units and (as a natural corollary to his explanation of firms) why markets exist - a question he eventually approached from another direction in his 1960 paper. We then consider Chamberlin's attempt to introduce product differentiation and selling costs into the established concept of equilibrium, in contrast to Young's process theory, before drawing on Menger's causal analysis and Marshall's treatment of the firm and interfirm relations as means of organising the growth of knowledge. Returning to Coase, we then consider the firm as a decision-making system in a context of Knightian uncertainty, operating on Knightian principles of domain-relevant groupings, and suggest that Simon's concept of quasi-decomposability, with its attendant dangers, applies to human brains, human organisations, and human knowledge, concluding that uncertainty is the precondition of imagination, which is essential to innovation in economic systems and our ideas.
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