Economic systems thinking (About the New Economy)

A Presentation by Chris Cook, Glasgow

Economic systems thinking_23_07_10

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Clay Shirky - Hierarchy & Leadership

"Many of the relative advantages of hierarchy are now reduced." 

The informational advantage of hierarchies is reduced. 

Institutions have lost their monopoly on tight management of information and thigh coordination of action. Now large distributed groups can share information and coordinate through social networking. 

This increases individual power and group power! This is the Multitude social movement!

By AllOfUs

Clay Shirky: Institutions vs. collaboration

Important concept

• coordination costs. 
• power law distribution, 80-20 curve, or long-tail distribution. 

The classic answer to getting a group to do something was the institution (centralized organization based on power relations). Today, the costs of communication, which is fundamental for coordination, has fallen. It is now possible to put the coordination into the infrastructure and to reduce the need for planning.  

The institution asks for:

• explicit goals 
• management, 
• enforcement of goals (carrots and sticks) 
• structure (economic, legal, physical, etc) 
• exclusion (cannot higher anyone) --> professional class 

Collaboration infrastructure: moving the problem to the people instead of moving the people to the problem, shedding institutional costs, adding flexibility. Decentralization, openness, inclusiveness. 

Tension between the institution as an enabler and institution as an obstacle. "Many of the relative advantages of hierarchy are now reduced."

It's all abut value! Open collaborative networks are mostly value-based organizations, and are increasingly replacing institutions (power-based organizations) on different arenas. 

By AllOfUs