SOME PRINCIPLES OF ECONOMIC ORGANISATION
THE NEED FOR CO-ORDINATION
The division of labour, upon which the wealth of nations depends, requires the existence of means by which specialised activities can be properly co-ordinated. The different means of co-ordination available and the different purposes to which they are suited, which have long been a central concern of economists, are the subject of this paper.
I addressed these issues in an article entitled ‘The organisation of industry’, which was published in the Economic Journal in 1972. It maintained that we should think of firms not as making products, but as undertaking activities, the nature of which would be in accordance with their particular capabilities, as determined ...