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The Guidance of an Enterprise Economy$
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Martin Shubik and Eric Smith

Print publication date: 2016

Print ISBN-13: 9780262034630

Published to MIT Press Scholarship Online: May 2017

DOI: 10.7551/mitpress/9780262034630.001.0001

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PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 05 July 2022

The Guidance of an Enterprise Economy

The Guidance of an Enterprise Economy

(p.509) 13 The Guidance of an Enterprise Economy
The Guidance of an Enterprise Economy

Martin Shubik

Eric Smith

The MIT Press

This final chapter splits naturally into two parts. The first part presents the basic overview of a theory of money and financial institutions that covers the abstract pre-institutional structure of the price system as an allocation device in a tightly defined structure with no need for money or financial institutions to be specified in the illustration of the efficient equilibrium condition. It stresses that by merely following well defined precepts of basic physics and game theory, at the same level of abstraction process models can be completed and force a discipline on the models where items such as money, default laws, grid size, loose coupling, specification of clearance rules, and time lags are all logical necessities.. These steps convert a static pre-institutional set of models into their natural minimal institution monetary and institutional models. . The utilization of these for application still requires the addition of ad hoc physical facts and relevant understanding of behavior. Our broader goal is directed towards a general theory of organization about which this work is only a narrow part. The second part of this chapter concludes with our Nostrodamus section where we conjecture about the future. This includes the need for supranational organizations especially for weapons control. We also suggest that the fundamental problem of the control of dangerous fluctuations in an enterprise economy is predominately a politico-bureaucratic problem and calls for a stress on the design of flexible coordinating devices within the politico-economic system. A sketch of such a device is presented. In a free society the stress should be less on control and forecasting than on guidance and flexibility.

Keywords:   Organization, coordinating devices, fluctuations

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