Monday, May 16, 2011

The Beauty of the Firm

I have mentioned below that I would discuss topics such as self-organization/spontaneous order and aesthetics (beauty). What I did not mention was that everything on the list is deeply interconnected. For example, one of the features of Austrian economics is the centrality of spontaneous order to that theoretical tradition. Understanding spontaneous orders is important if you want to understand how the economy works, and it can even help one to understand how larger, more complex firms can work most efficiently (noting that firms are, in the end, not really spontaneous orders, though they can approximate them).

So how is self-organization related to beauty? A thing is beautiful if it is paradoxical. Beauty has or contains the following features:

Complexity within Simplicity

Digital-Analog (particular individuals that can coordinate their actions)

Emergent from Conflict

Evolutionary (changes over time)

Generative and Creative

Hierarchical Organization

Play (a nonserious thing done seriously)

Reflexivity or Feedback



Scalar Self-Similarity


Unity in Multiplicity

These are also features of self-organizing processes. Christian Fuchs lists the following features as aspects of self-organization:



Cohesion (digial-analog)


Bottom-up Emergence

Downward Causation


Feedback Loops, Circular Causality


Relative Chance


Globalization and Localization

Unity in Plurality (Generality and Specificity)

And for Emergence, he lists the following aspects:

Synergism (productive interaction between parts)






If we compare the lists, we can see the correlation between self-organizing complex systems/processes and beauty. Each have the same attributes. "Cognition, co-operation and communication are phenomena that can be found in different forms in all self-organizing systems. Information is a relationship that exists as a relationship between specific organizational units of matter (Fuchs). All beautiful objects are information-generating processes, and all successful firms are, in the broadest definition of the term, information-generating processes (if you inform something, you give it form -- and giving things new forms is what any business does). And to the extent that something is a self-organizing process, it is beautiful. Thus, understanding the nature of beauty helps one to understand whether or not you have a healthy, productive, profitable firm.

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