Loomnie

Ronald Coase, the economist who theorised the reason for the existence of firms, turns 100 today. The Economist’s Schumpeter column has this really nice piece about him:

His central insight was that firms exist because going to the market all the time can impose heavy transaction costs. You need to hire workers, negotiate prices and enforce contracts, to name but three time-consuming activities. A firm is essentially a device for creating long-term contracts when short-term contracts are too bothersome. But if markets are so inefficient, why don’t firms go on getting bigger for ever? Mr Coase also pointed out that these little planned societies impose transaction costs of their own, which tend to rise as they grow bigger. The proper balance between hierarchies and markets is constantly recalibrated by the forces of competition: entrepreneurs may choose to lower transaction costs by forming firms but giant firms eventually become sluggish and uncompetitive.

Of course, things are not that neat (read the rest of the article) but his central ideas in ‘The Nature of the Firm’ (1937) survive in the work of New Institutional Economists, with transaction cost remaining central to much of their theorising.

last night we were driving to a restaurant when my friend who was driving realised, almost too late, that he was supposed to turn left not right. he had to hurry over to the lane that led left. he smiled and said that since he had a numbe rplate from a small city and not berlin (this was in berlin) he would be described as a person from a small town and excused. switching lanes that way is definitely not beyond those villagers.

flashback to me and my aunt driving in lagos, nigeria. the car has a lagos number plate, and whenever any of the public bus drivers tries to get ahead of her in a crawling traffic she yells at them to draw their attention to the numberplate of her car. they should know better than to try to get ahead of her; can’t they see that she is a lagosian? of course, her reaction only emphasises – at least to my mind – that she is not a lagosian, or at least that she had been using cars that did not have lagos number plates. and whenever i was in the car with my mother she would warn the driver to take it easy since the car does not have a lagos number and so the drivers would think it nothing to harass those in the car.

thinking about these leads be to wonder how we attach meaning to things. when we see a car that is from a particular part of the country it conjures images of our stereotypes of that place and then we watch to see the confirmations of those stereotypes. and even when we don’t watch for confirmations we are prepared to excuse their behaviour because of that/those sign(s). or we are prepared to cheat or bully them because of those signs. the same signs could take on different meanings at different points. dealing with number plates could be as harmless as it was last night, or as dangerous as to be markers for acts of violence. imagine a crisis in which people from a particular part of the country are targets. then imagine that someone drives over in the car that is marked as being from that part of the country. i don’t think i need to complete that picture.

of signs and actor-network-theory
so, while we imbue signs with meaning signs are things that sometimes go on to live a life all their own and in turn influence us. we love to emphasise the control of humans over things, and when we act based on impetus from things we quickly run ahead of ourselves to assert that we are not reacting to those things themselves but to the thoughts and imageries that humans have laid in them – to the social that has been put in them. but i wonder whether we realise that without that initial thing that sparks off a reaction we would not act or react or even think the way we did. we enjoy the tyranny of humans, who am i to think that we would be willing to give it up? that is the hardest thing to swallow in actor-network-theory.

Today I decided to use google’s blogsearch tool to look for blogs that have entries on actor-network theory. I got this returned. I was kinda surprised that most of the blogs that have entries on ANT are written by graduate students (this, this and this are examples). Is there going to be a boom in its application in the near future? What is the main attraction?