Papers by Spencer Thompson
Journal of Economic Issues, 2016
Abstract: This article contends that, in their treatments of worker cooperatives, the predominant... more Abstract: This article contends that, in their treatments of worker cooperatives, the predominant theories of the firm adhere to the logic of technological determinism, and can accordingly be evaluated using the ideas of Thorstein Veblen and Karl Marx. Invoking these patriarchs’ respective distinctions between instrumental and ceremonial institutions and between the technical and social relations of production, the article argues that, contrary to contemporary theories of the firm, worker cooperatives possess an inherent but often latent advantage in implementing bureaucratic organizational structures, enjoying their instrumental/technical benefits for technology and coordination without incurring their ceremonial/social drawbacks for behavior and cooperation.
Journal of Co-operative Organization and Management, 2015
This paper argues that the predominant economic theories of the firm neglect the importance of co... more This paper argues that the predominant economic theories of the firm neglect the importance of cooperation based on trust and loyalty, and that as a result, their criticisms of worker cooperatives are incomplete. While competence-based theories tend to focus exclusively on coordination and thus fail to acknowledge that the development and application of productive knowledge also involves cooperation, contract-based theories cling to a rigid model of behaviour that does not account for the type of cooperation thus involved. Thus, although contract-based theories denigrate cooperatives for failing to achieve cooperation, cooperatives may in fact be more propitiously situated than conventional firms to achieve the cooperation involved in the development and application of productive knowledge. Meanwhile, although competence-based theories imply that cooperatives are incapable of achieving coordination, cooperatives may in fact be more propitiously situated than conventional firms to achieve coordination without incurring potentially adverse effects on cooperation. This ability, however, may be suppressed by a hostile institutional environment, which biases both the options available to individuals and the way they perceive those options against cooperatives. Although inter-cooperative associations can alleviate this institutional bias, they involve structural and cultural obstacles of their own.
Kybernetes
PurposeThe economic theory of the firm apparently concurs with Niklas Luhmann’s theory of social ... more PurposeThe economic theory of the firm apparently concurs with Niklas Luhmann’s theory of social systems with regard to the primary function of the firm to be complexity reduction, i.e. the alleviation of the cognitive burden on agents whose cognitive capacities are limited. At the same time, however, the theory of the firm ignores the attendant issues of societal sustainability emphasised by Luhmann. The paper aims to fill this gap.Design/methodology/approachTaking a theoretical approach, the paper builds on the conceptual construct of “the complexity-sustainability trade-off”, which combines two contrasting aspects of the relationship between a system and its environment, namely, the precariousness highlighted by Luhmann and the embeddedness highlighted by open systems theory. These themes are respectively reflected in the principles of complexity reduction and environmental dependence which constitute the trade-off.FindingsDrawing inspiration from the classic Marshallian presenta...
Purpose: The economic theory of the firm apparently concurs with Niklas Luhmann's theory of socia... more Purpose: The economic theory of the firm apparently concurs with Niklas Luhmann's theory of social systems with regard to the primary function of the firm to be complexity reduction, i.e. the alleviation of the cognitive burden on agents whose cognitive capacities are limited. At the same time, however, the theory of the firm ignores the attendant issues of societal sustainability emphasised by Luhmann. The paper aims to fill this gap. Design/methodology/approach: Taking a theoretical approach, the paper builds on the conceptual construct of "the complexity-sustainability trade-off", which combines two contrasting aspects of the relationship between a system and its environment, namely, the precariousness highlighted by Luhmann and the embeddedness highlighted by open systems theory. These themes are respectively reflected in the principles of complexity reduction and environmental dependence which constitute the trade-off. Findings: Drawing inspiration from the classic Marshallian presentation of supply and demand in modern economics, the paper argues that the principles of complexity reduction and critical dependence translate into the demand for and supply of social systems. In the proposed systems-theoretic interpretation of the theory of the firm, demand and supply refer to the imperatives of achieving coordination and securing cooperation within the firm, respectively. Thus, in the theory of the firm, the complexity-sustainability trade-off manifests itself as a trade-off between coordination and cooperation. Originality/value: The implicit focus of the theory of the firm on complexity reduction disregards the nature, importance and fragility of cooperation in real-world firms. In so doing, it impedes the authors' understanding of unconventional types of business organisation, such as cooperatives. These defects can be corrected by reorienting the theory of the firm according to the proposed systems-theoretic approach, which holds that firms should not be governed or studied in isolation from their environment, as they too often are-and, accordingly, that apparently anomalous forms of organisation should be taken seriously, as they too often are not.
The prevailing theories of the firm acknowledge the importance of trust and loyalty but neglect s... more The prevailing theories of the firm acknowledge the importance of trust and loyalty but neglect such behaviour in the substance of their analyses. The present paper unravels this paradox by drawing on Niklas Luhmann’s ground-breaking insight that the complexity-reducing function of social systems leads them to neglect their critical environmental dependencies, thereby compromising their own sustainability. If the firm is conceived as a social system, Luhmann’s theory implies that the neglect of social behaviour by the predominant theories of the firm can be explained as reflecting the neglect of society by actual firms. This argument promises to not only furnish the theory of the firm with a concern for sustainability, but also render it more amenable to unconventional institutions, such as cooperatives and nonprofit organisations, that help compensate for the damage inflicted by conventional firms on the social environment.
This article contends that, in their treatments of worker cooperatives, the predominant theories ... more This article contends that, in their treatments of worker cooperatives, the predominant theories of the firm adhere to the logic of technological determinism, and can accordingly be evaluated using the ideas of Thorstein Veblen and Karl Marx. Invoking these patriarchs’ respective distinctions between instrumental and ceremonial institutions and between the technical and social relations of production, the article argues that, contrary to contemporary theories of the firm, worker cooperatives possess an inherent but often latent advantage in implementing bureaucratic organizational structures, enjoying their instrumental/technical benefits for technology and coordination without incurring their ceremonial/social drawbacks for behavior and cooperation.
It has frequently been presumed that the ability of the Mondragón group of co-operatives to achie... more It has frequently been presumed that the ability of the Mondragón group of co-operatives to achieve a remarkable degree of trust and loyalty amongst its members while maintaining relatively bureaucratic workplaces is due to the uniquely solidaristic traits of Basque culture, implying that the same feat will be unattainable amidst less favourable cultural milieus. This article argues that, on the contrary, Mondragón’s organisational culture is embedded in its organisational structures — such as its systems of governance, education, ownership, remuneration, and inter-co-operation — and should therefore be widely applicable, even if not identically replicable, in other regions. To this effect, the article provides evidence that the key features of ‘the Mondragón Model’ have indeed been emulated elsewhere — namely in Valencia and the United States — and moreover has significant parallels around the world.
This paper argues that the predominant economic theories of the firm neglect the importance of co... more This paper argues that the predominant economic theories of the firm neglect the importance of cooperation based on trust and loyalty, and that as a result, their criticisms of worker cooperatives are incomplete. While competence-based theories tend to focus exclusively on coordination and thus fail to acknowledge that the development and application of productive knowledge also involves cooperation, contract-based theories cling to a rigid model of behaviour that does not account for the type of cooperation thus involved. Thus, although contract-based theories denigrate cooperatives for failing to achieve cooperation, cooperatives may in fact be more propitiously situated than conventional firms to achieve the cooperation involved in the development and application of productive knowledge. Meanwhile, although competence-based theories imply that cooperatives are incapable of achieving coordination, cooperatives may in fact be more propitiously situated than conventional firms to achieve coordination without incurring potentially adverse effects on cooperation. This ability, however, may be suppressed by a hostile institutional environment, which biases both the options available to individuals and the way they perceive those options against cooperatives. Although inter-cooperative associations can alleviate this institutional bias, they involve structural and cultural obstacles of their own.
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Papers by Spencer Thompson