EPS Seminar
Thursday 25 June 2015, 16:45 - 18:00
Room D 119
Speaker: Pieter Ruys (Tilburg University)
Title: Perspectives of Actors in a Social Economy
Abstract: An economy counts a myriad of decisions taken each day, taken by decision makers who want to attain
some specific goal. These decision makers are usually classified in consumers and producers, modeled as utility,
respectively profit maximizers, under given institutional and resource constraints. Problematic is the modeling of
decision makers in the cooperative and public domain. What kind of parameters determine their decisions?
Altruistic, autocratic, elitist, or benevolent goals? Determined by tradition or by force? According to social choice
theory, group preferences are to be derived from individual preferences for specific projects; and in public choice,
group benefits depend on individual shadow prices. Except for a pure market economy with the goals of profitand utility-maximization on a restricted set of commodities and services, there is no uniform goal established in a
social economy that allows for decentralized, efficient and consistent decision making. Society has organized social
institutions to overcome these and other market failures (see Arrow, 1963: 947), but these are not integrated in
economic decision making.
Then the next problem arises: how come these social institutions into being? Do they evolve spontaneously from
existing institutions, do they originate from political interventions, or from private initiatives? And if so, what are
their goals and what the rules to which they are submitted? Those questions pertain to any living organism, be it
human, animal, or cultural. So it is instructive to opt for an approach that is general enough that covers those
domains.
This problem is approached by offering a sound, innovative foundation for institutional modeling with
interdependent private, cooperative and collective values. For that purpose, an enterprise, being a nexus of
relations, is described and analyzed as an operator, an Actor that governs the productive interaction between its
relational capacities. These capacities are distinguished in generic capacities and transient capacities. The generic
capacities are derived from reducing capacities to the bare relational essentials. By going to the limit of this
relational structure, and by treating behavioral and positional concepts on an equal footing, one arrives at the
Fano-graph with three spanning factors 'at infinity', called perspectives. These are interpreted in the generic
capacity structure as: the Giving Mind relational capacity, the Receiving Mind relational capacity, and the Means
relational capacity of an Actor. By endowing this generic structure with the Actor’s transitory characteristics, a
Transient Capacity Structure is obtained, isomorphic to the generic perspective structure. If an actor is constituted
by a set of players, for example, then dual game-theoretical structures such as Meyerson’s coalition structure and
cooperation structure can be identified.
The endowed, transient capacities of an Actor can be ordered in layers according to increasing complexity and
sophistication of the Mind-values and refinement of the Means. That distinguishes actors as private, social, and
public enterprises. Using the terminology introduced by Kahneman (2012), market behavior by ‘Econ’ actors is
distinguished from relational behavior by ‘Human’ actors, and from collective behavior by communities. Conditions
for their performance are derived. These enterprises are embedded in an institutional framework, the social
economy, which induces the behavior of participants. A blueprint can be presented in which questions as: who
owns, who supervises, and who finances social enterprises, are discussed.