Understanding how systemic change happens …

This paper discusses possible conceptual foundations of formal models of endogenous change processes, understood here as movements between market and non-market transactions at the level of the national economy. It links but does not merge movements of resources with shifts in the pattern of transaction types. In focussing on transaction types, it deploys insights from Commons, Coase, and Godelier, to discuss how framing transaction types as the fundamental 'thing to be explained' points to the value of choices about how activity may best be organised, which requires a general concept, which can be found in Commons' 'going concern', applicable to transactions focussing on markets or not. It entails the possibility of institutional change and shifts in the location of economic resources without formal policy change. It suggests that the main requirement for such change processes are dualistic incentive patterns that operate upon institutional choice and/or development, which derive at root from experienced contrasts between the realities of existing and normatively privileged systems, and others, normatively initially deemed inferior, that offer key actors greater economic efficiency. Moves of institutional activity from one to the other are thus conceptually processes of endogenous systemic change. System in this sense is thus viewed as a coexistence of alternatives. The motivation comes directly from consideration of two very different historical moments: endogenously driven shifts 'from plan to market' in countries attempting central planning, and contemporary pressures in market economies from areas of the economy, such as services, where joint production and/or own consumption imply irremediable market failure and so non-market based economic institutions offer greater economic efficiency and may therefore attract both resources (factors of production) and investment in development of suitable transactions and their organisation.