The Emergence of Organizations and Markets

The social sciences have sophisticated models of choice and equilibrium but little understanding of the emergence of novelty. Where do new alternatives, organizational forms, and types of people come from? Combining biochemical insights about the origin of life with innovative and historically oriented social network analyses, John Padgett and Walter Powell develop a theory about the emergence of organizational, market, and biographical novelty from the coevolution of multiple social networks. They demonstrate that novelty arises from spillovers across intertwined networks and that although in the short run actors make relations, in the long run relations make actors. This theory of novelty emerging from intersecting flows is developed through formal deductive modeling and a wide range of careful and original historical case studies. Padgett and Powell expand on the biochemical concept of autocatalysis--the chemical definition of life--and extend and apply constructivist thinking from chemistry to social processes of production and communication. Then Padgett and Powell, along with other colleagues, present a vast array of case studies. They first look at the emergence of organizational novelty in early capitalism and state formation, they examine the coevolution of political mobilization and economic reform, and lastly, they explore contemporary high-tech capitalism and the development of the biotechnology industry, regional high-tech clusters, and the open source community.