Rethinking Agency: Toward an Organizational View of the Economy

For more than a century, economics has been built on the idea that individuals are the central actors in economic life. This conviction, deeply embedded in both classical and neoclassical thought, asserts that people possess preferences, make autonomous choices, respond rationally to incentives, and collectively generate the emergent order we call “the market.” At its core, this worldview imagines an economy composed of countless individuals whose interactions, mediated by price signals, produce efficient outcomes.

Yet the contours of the contemporary economy no longer resemble this portrait. Across the past century, organizations, corporations, bureaucracies, financial institutions, state agencies, have grown in scale and complexity to a degree unimaginable to earlier generations. These entities command vast resources, operate at speeds and scales far beyond human cognition, and exhibit continuity that outlives any individual member. Their operations shape, influence, and increasingly determine the environment in which humans make decisions. It is no longer clear that the individual, as traditionally conceived, remains the primary agent in the economic landscape.

This paper proposes a simple but radical question: what if we have been looking at the economy from the wrong perspective? What if the true adaptive agents in modern economic systems are not individuals, but organizations?

To entertain this possibility, we must first revisit the pillars of mainstream economics. One of the most cherished assumptions is that individuals possess stable, exogenous preferences. They are presumed to know what they want, to evaluate choices freely, and to act accordingly. But a century of research in psychology, advertising, behavioral economics, and digital sociology demonstrates something different. Preferences are not merely expressed; they are actively constructed. Corporations design the informational environments in which people think, feel, and choose. Marketing systems shape desire. Digital architectures structure attention. Recommendation algorithms channel perception. Behavioral engineering orchestrates decision-making through subtle nudges that most individuals cannot detect, let alone resist. In such an environment, the notion of an autonomous consumer expressing independent preferences becomes increasingly untenable.

Equally fragile is the idea of free markets populated by equal competitors. Idealized markets assume decentralization and voluntary exchange, but the empirical reality is one of concentrated power. Dominant firms shape regulatory frameworks, influence political agendas, and engineer competitive landscapes in their favor. Through lobbying, campaign finance, and regulatory capture, corporations exert a gravitational pull on states, steering policy and institutional evolution. What results is not a spontaneous order arising from dispersed individual action, but an engineered environment sculpted by organizations with the capacity to modify their constraints.

Traditional models also reduce firms to simple production functions, passive black boxes that transform inputs into outputs. This abstraction conceals the dynamic, adaptive nature of real organizations. Research in organizational ecology shows that firms behave less like machines and more like living species, subject to selection pressures, niche formation, mortality, and reproduction. Evolutionary economics adds that organizations possess routines that function analogously to genetic traits, enabling them to adapt and evolve. Institutional theorists emphasize how organizations develop internal logics, habits, and trajectories that persist independently of individual intentions. Legal scholars go further, noting that corporate personhood grants these entities rights, responsibilities, and continuity equivalent to a form of artificial life.

Taken together, this research invites us to reconsider the nature of agency within the economic system. Organizations appear to act, respond, adapt, and pursue survival in ways that strongly resemble teleological agents. Meanwhile, individuals, those whom economics has traditionally treated as the sovereign authors of economic outcomes, find themselves increasingly enclosed within environments designed by these organizational actors. Human behavior becomes data, input, or substrate; humans become labor resources, attention reservoirs, and nodes within feedback systems aimed at organizational stability and growth.

This does not imply malevolence or conspiracy. It suggests evolution. Complex systems tend toward structures that reinforce the persistence of their most adaptable components. Corporations and institutions have been shaped by competitive pressures, technological infrastructures, and legal frameworks that collectively push them toward autonomy. As they grow, they generate and refine cybernetic loops that sense human behavior, interpret it through data analytics, modify environments in response, and reinforce behavioral patterns that stabilize their own operation. States, rather than acting solely on behalf of individuals, often become part of these loops, either as regulators, partners, or instruments of coordination among large-scale organizations.

If this interpretation is correct, then the modern economy has indeed moved to a new evolutionary state. The agent–environment structure assumed by mainstream economics has inverted. Individuals remain participants, but not prime movers. The true adaptive agents are organizational entities whose scale, continuity, and capacity for environmental design give them a form of agency that dwarfs that of human actors embedded within them.

A more formal understanding of this shift would require new modeling frameworks. Ecological models could represent the interactions between organizations, humans, and states as co-evolving populations with distinct resource requirements and strategies. Cybernetic models could capture the feedback loops through which organizations sense, shape, and stabilize the environments that sustain them. Evolutionary game theory could articulate the strategic dynamics among organizations, states, and individuals, showing how certain strategies, those that enhance organizational autonomy and influence, become evolutionarily stable over time.

Such models remain largely undeveloped in economics, not because the phenomena they would describe are absent, but because the discipline continues to privilege the individual as the natural unit of analysis. This leaves mainstream economic theory blind to many forces shaping today’s world and increasingly unable to predict or explain economic outcomes. When firms behave like organisms, when states act as coordination mechanisms between powerful actors, and when human preferences are systematically engineered, the conventional assumptions of rational individuals interacting through free markets no longer hold.

This brings us to the central question: who are the true agents in the modern economy? Are individuals still the drivers of economic dynamics, or have corporations evolved into the dominant actors whose actions shape the possibilities available to individuals? And, if the latter is true, then to what extent can traditional economic models, models that overlook organizational agency, provide accurate predictions or meaningful policy insights?

These questions do not merely challenge the intellectual foundation of mainstream economics. They invite us to reconsider the nature of economic life itself, demanding a shift in the way we understand power, agency, and the structure of our collective future.

By AllOfUs