Book contents
- Frontmatter
- Contents
- Acknowledgments
- Introduction
- Part I Business Groups and Economic Organization
- 1 The Problem of Economic Organization
- 2 Interpreting Business Groups in South Korea and Taiwan
- 3 A Model of Business Groups: The Interaction of Authority and Market Power in the Context of Competitive Economic Activity
- 4 Economic Organization in South Korea and Taiwan: A First Test of the Model
- Part II Emergence and Divergence of the Economies
- Conclusions
- Appendix A Mathematical Model of Business Groups
- Appendix B Examples of Differential Pricing Practices of Korean Groups
- Appendix C Hypothesis Tests of the Model
- Appendix D The Role of Debt in the Korean Financial Crisis, 1997
- References
- Index
- Titles in the series
1 - The Problem of Economic Organization
Published online by Cambridge University Press: 24 July 2009
- Frontmatter
- Contents
- Acknowledgments
- Introduction
- Part I Business Groups and Economic Organization
- 1 The Problem of Economic Organization
- 2 Interpreting Business Groups in South Korea and Taiwan
- 3 A Model of Business Groups: The Interaction of Authority and Market Power in the Context of Competitive Economic Activity
- 4 Economic Organization in South Korea and Taiwan: A First Test of the Model
- Part II Emergence and Divergence of the Economies
- Conclusions
- Appendix A Mathematical Model of Business Groups
- Appendix B Examples of Differential Pricing Practices of Korean Groups
- Appendix C Hypothesis Tests of the Model
- Appendix D The Role of Debt in the Korean Financial Crisis, 1997
- References
- Index
- Titles in the series
Summary
Most theories of economic organization, regardless of discipline, involve a sleight of hand. Theorists begin by assuming the existence of decision-making individuals. They then provide these actors with inner motivations: desire for gain, for power, or for social honor and reputation. Driven by these motivations, economic actors are then set in motion. They plot strategy; they use guile. They act on their interests; they interact in trusting ways. Seeking to maximize, they also respond to incentives and constraints put in place by powerful people, such as state planners or heads of state banking systems or the CEOs of the largest firms. Whatever these actors do and however they respond shape the calculations and subsequent actions of others. Assuming all similarly motivated individuals act more or less alike, economic theorists then posit an orderly, organized economy, conceived, for example, as a capitalist economy composed of independent and competitive firms. When theorized in this fashion, economic organization is pulled, like a rabbit from a hat, out of aggregated individual decisions.
Attempts to induce societal level organization from individual actions are common enough in every social science. In sociology, anthropology, and political science, theorists often, in a single bound, make the same leap from individual behavior to social and political structure. In these disciplines, however, the reverse trick is equally widespread: The inner motivations and actions of individuals are produced, as if by magic, from descriptions of the whole.
- Type
- Chapter
- Information
- Emergent Economies, Divergent PathsEconomic Organization and International Trade in South Korea and Taiwan, pp. 13 - 49Publisher: Cambridge University PressPrint publication year: 2006