post-capitalist society emerging?

Doug Henwood dhenwood at
Fri Nov 26 12:38:44 PST 1999

[Anyone know anything about Adler?]

"Market, Hierarchy, and Trust: The Knowledge Economy and the

Future of Capitalism"


Marshall School of Business, University of Southern


Document: Available from the SSRN Electronic Paper Collection:

Contact: PAUL S. ADLER

Email: Mailto:padler at

Postal: Marshall School of Business, University of Southern


Los Angeles, CA 90089-1421 USA

Phone: (213)740-0728

Fax: (213)740-3582


Recent conceptualizations of trends in the structure of U.S.

industry have focused on the relative importance of markets,

hierarchies, and hybrid intermediate forms. This paper seeks to

advance the discussion by distinguishing three ideal-typical

forms of organization and their corresponding key coordination

mechanism: market/price, hierarchy/authority, and

community/trust. Different institutions combine the three

forms/mechanisms in different proportions. Economic and

organizational theory have shown that compared to trust, price

and authority are relatively ineffective mechanisms for dealing

with assets that are based on knowledge. As knowledge becomes

increasingly important in our economy, we should therefore

expect high-trust institutional forms to proliferate.

A review of trends in employment relations, interdivisional

relations, and inter-firm relations finds evidence suggesting

that the effect of growing knowledge-intensity may indeed be

such a trend towards greater reliance on trust. There is also

reason to believe that the form of trust most effective in this

context is of a distinctively modern kind - "reflective trust" -

as opposed to a traditionalistic, blind trust. Such a trend to

reflective trust appears to threaten the privileges of currently

dominant social actors, and these actors' resistance, in

combination with the complex interdependencies between price,

authority, and trust mechanisms, imparts a halting character to

the trend. But the momentum of this trend nevertheless appears

to be self-reinforcing, which suggests that it may ultimately

come to challenge the foundations of our capitalist form of

society while simultaneously creating the foundations of a new,

post-capitalist form.

JEL Classification: A12,B24,B25,D80,H10,J20,L10,L22,M10,O10,O30

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