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Stability, Specialization and Social Recognition

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  • Gilles, R.P.
  • Lazarova, E.A.

    (Tilburg University, School of Economics and Management)

  • Ruys, P.H.M.

    (Tilburg University, School of Economics and Management)

Abstract

Yang's theory of economic specialization under increasing returns to scale (Yang, 2001) is a formal development of the fundamental Smith-Young theorem on the extent of the market and the social division of labor. In this theory, specialization — and thus, the social division of labor — is firmly embedded within a system of perfectly competitive markets. This leaves unresolved whether and how such development processes are possible in economies based on more primitive, non-market organizations.In this paper we introduce a general relational model of economic interaction. Within this non-market environment we discuss the emergence of economic specialization and ultimately of economic trade and a social division of labor. We base our approach on four stages in organizational development: a primordial stage of chaos; the emergence of a stable relational structure; the emergence of relational trust and subjective specialization; and, finally, the emergence of objective specialization through the social recognition of subjectively defined economic roles. In turn, this paves the way for the introduction of market institutions.
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Suggested Citation

  • Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2006. "Stability, Specialization and Social Recognition," Other publications TiSEM 7fa36115-a85c-44d2-ad23-0, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:7fa36115-a85c-44d2-ad23-0e36c9ab4b87
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    Cited by:

    1. Robert P. Gilles & Emiliya Lazarova & Pieter H. M. Ruys, 2006. "On Socio-Economic Roles And Specialisation," Economic Papers, The Economic Society of Australia, vol. 25(2), pages 157-170, June.
    2. Pieter H.M. RUYS, 2014. "Architecture of an Economy with Social Enterprises: the Relational Capacity Approach," CIRIEC Working Papers 1413, CIRIEC - Université de Liège.
    3. Gilles, R.P. & Lazarova, E.A. & Ruys, P.H.M., 2011. "Economic Institutions and Stability : A Network Approach," Discussion Paper 2011-084, Tilburg University, Center for Economic Research.

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    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D - Microeconomics
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F - International Economics
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L - Industrial Organization
    • O - Economic Development, Innovation, Technological Change, and Growth

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