The Emergence of Organizations and Markets

by John F. Padgett, Walter W. Powell

Overview

A dynamic framework for studying social emergence

The social sciences have sophisticated models of choice and equilibrium but little understanding of the emergence of novelty. Where do new alternatives, new organizational forms, and new 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 in different domains. In the short run actors make relations, but in the long run relations make actors.

This theory of novelty emerging from intersecting production and biographical flows is developed through formal deductive modeling and through a wide range of original historical case studies. Padgett and Powell build on the biochemical concept of autocatalysis—the chemical definition of life—and then extend this autocatalytic reasoning to social processes of production and communication. Padgett and Powell, along with other colleagues, analyze a very wide range of cases of emergence. They look at the emergence of organizational novelty in early capitalism and state formation; they examine the transformation of communism; and they analyze with detailed network data contemporary science-based capitalism: the biotechnology industry, regional high-tech clusters, and the open source community.

Product Details

ISBN-13:	9780691148878
Publisher:	Princeton University Press
Publication date:	10/14/2012
Edition description:	New Edition
Pages:	608
Product dimensions:	7.00(w) x 9.90(h) x 1.40(d)

About the Author

John F. Padgett is professor of political science and (by courtesy) professor of sociology and history at the University of Chicago. Walter W. Powell is professor of education and (by courtesy) professor of sociology, organizational behavior, management science, communication, and public policy at Stanford University.

Table of Contents

Contributors ix
List of Illustrations xiii
List of Tables xvii
Acknowledgments xix

Chapter 1 The Problem of Emergence

John F. Padgett and Walter W. Powell 1

Part I Autocatalysis 31

• Chapter 2 Autocatalysis in Chemistry and the Origin of Life
  John F. Padgett 33
• Chapter 3 Economic Production as Chemistry II
  John F. Padgett, Peter McMahan, and Xing Zhong 70
• Chapter 4 From Chemical to Social Networks
  John F. Padgett 92

Part II Early Capitalism and State Formation 115

• Chapter 5 The Emergence of Corporate Merchant-Banks in Dugento Tuscany
  John F. Padgett 121
• Chapter 6 Transposition and Refunctionality: The Birth of Partnership Systems in Renaissance Florence
  John F. Padgett 168
• Chapter 7 Country as Global Market: Netherlands, Calvinism, and the Joint-Stock Company
  John F. Padgett 208
• Chapter 8 Conflict Displacement and Dual Inclusion in the Construction of Germany
  Jonathan Obert and John F. Padgett 235

Part III Communist Transitions 267

• Chapter 9 The Politics of Communist Economic Reform: Soviet Union and China
  John F. Padgett 271
• Chapter 10 Deviations from Design: The Emergence of New Financial Markets and Organizations in Yeltsin's Russia
  Andrew Spicer 316
• Chapter 11 The Emergence of the Russian Mobile Telecom Market: Local Technical Leadership and Global Investors in a Shadow of the State
  Valery Yakubovich and Stanislav Shekshnia 334
• Chapter 12 Social Sequence Analysis: Ownership Networks, Political Ties, and Foreign Investment in Hungary
  David Stark and Balázs Vedres 347

Part IV Contemporary Capitalism and Science 375

• Chapter 13 Chance, Nécessité, et Naïveté: Ingredients to Create a New Organizational Form
  Walter W. Powell and Kurt Sandholtz 379
• Chapter 14 Organizational and Institutional Genesis: The Emergence of High-Tech Clusters in the Life Sciences
  Walter W. Powell, Kelley Packalen, and Kjersten Whittington 434
• Chapter 15 An Open Elite: Arbiters, Catalysts, or Gatekeepers in the Dynamics of Industry Evolution?
  Walter W. Powell and Jason Owen-Smith 466
• Chapter 16 Academic Laboratories and the Reproduction of Proprietary Science: Modeling Organizational Rules through Autocatalytic Networks
  Jeannette A. Colyvas and Spiro Maroulis 496
• Chapter 17 Why the Valley Went First: Aggregation and Emergence in Regional Inventor Networks
  Lee Fleming, Lyra Colfer, Alexandra Marin, and Jonathan McPhie 520
• Chapter 18 Managing the Boundaries of an "Open" Project
  Fabrizio Ferraro and Siobhán O'Mahony 545
• Coda: Reflections on the Study of Multiple Networks
  Walter W. Powell and John F. Padgett 566

Index of Authors 571
Index of Subjects 573

What People are Saying About This

From the Publisher

"The scholarship, analytical focus, and sheer energy of this work are nothing short of admirable. It will change the way historians and social scientists study large-scale economic and political transformations."—Jon Elster, Collège de France and Columbia University

"This intellectual tour de force revolutionizes how we think about social transformations. It introduces a brilliant and surprisingly effective new model of explanation based on an analogy with the biochemistry of life-forms. The model's utility is convincingly demonstrated in fascinating case studies, ranging from medieval Florence to contemporary Silicon Valley. Every social scientist interested in the problem of social change should read this book."—William H. Sewell, Jr., University of Chicago

"This book is about the old sociological truth that the substance of social structure—how it is known, how it operates, how it has effects—lies in the structure's history. That truth, here discussed in terms of network autocatalytic mechanisms, has never been said as well, as clearly, or with such profound implications for how we think about organizations and markets. A remarkable book."—Ronald S. Burt, University of Chicago

"For the social sciences, which have been far better at explaining how institutions behave than at understanding where they come from, this is a landmark book. Operating at the horizon where theory and method converge, it presents a genuinely new explanation of the emergence of novelty in a broad array of contexts. Representing social science at its best, this book will resonate through the disciplines for a long time."—Paul DiMaggio, Princeton University

"This book revitalizes the study of social, political, and economic change by linking it to the classic sociological understanding of society as interlocked institutions that borrow from and transform one another. Its rich and subtle merger of network analysis, organization theory, and historical institutionalism will catalyze a generation of new studies. It is the essential starting point for those seeking new and exciting theoretical departures."—Mark Granovetter, Stanford University

"This book is a towering achievement of methodological finesse, bridging multiple scales of structure and time to produce a polyoptic theory of organizational genesis and transformation in politics, economics, and science. A core thesis of this book is that multifunctional social actors and the heterarchical networks they induce coconstruct each other, yielding emergent organizations that shape structural and functional innovation in response to shocks. Padgett and Powell's fantastic demonstration of interdisciplinary conversation will provide systems biologists with thought-provoking ideas for developing a fresh look at the nature of emergence and evolution."—Walter Fontana, Harvard University

Editorial Reviews

"Combining biochemical insights about the origin of life with innovative and historically oriented social net-work 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."

World Book Industry

"[Padgett and Powell] see the 'percolation of perturbations' through complex networks as the next research frontier in the program of study that they propose, and they hope their initial forays in The Emergence of Organizations and Markets will inspire readers across the sciences to pick up the torch. If that happens, this theoretically innovative contribution to social science will have catalyzed the regeneration of historical applications of complexity science."—-Michael Macy, Science

"This important book . . . combines insights from biochemical origins of life and social network analysis to study the emergence of organizational forms that have been important in the development of market societies. This unusual synthesis provides original perspectives to the fourteen case studies in the book. These studies make sense of detailed relational data through models of biological evolution. In addition to being informative on some of the major turning points in economic history, the case studies suggest new explanations for the background and origins of major organizational innovations."—-Ozge Dilaver Kalkan, JASSS

From the Publisher

This important book . . . combines insights from biochemical origins of life and social network analysis to study the emergence of organizational forms that have been important in the development of market societies. This unusual synthesis provides original perspectives to the fourteen case studies in the book. These studies make sense of detailed relational data through models of biological evolution. In addition to being informative on some of the major turning points in economic history, the case studies suggest new explanations for the background and origins of major organizational innovations.

JASSS - Ozge Dilaver Kalkan

[Padgett and Powell] see the 'percolation of perturbations' through complex networks as the next research frontier in the program of study that they propose, and they hope their initial forays in The Emergence of Organizations and Markets will inspire readers across the sciences to pick up the torch. If that happens, this theoretically innovative contribution to social science will have catalyzed the regeneration of historical applications of complexity science.

Science - Michael Macy