Market, Hierarchy and Trust: The Knowledge Economy and the Future of Capitalism - by Paul S. Adler

This is the computer-generated audiobook version of the paper with the same name by Paul S. Adler. I have removed the reference cues in the audio form in order to make it easier to follow. The full pdf was downloaded from here: http://www-bcf.usc.edu/~padler/research/MHT-1.pdf Abstract: Recent conceptualizations of trends in the structure of US industry have focused on the relative importance of markets , hierarchies , and hybrid intermediate forms. This paper advances the discussion by distinguishing three ideal-typical forms of organization and their corresponding coordination mechanisms: market/price , hierarchy/authority , and community/trust. Different institutions combine the three forms/mechanisms in different proportions. Economic and organizational theory have shown that , compared to trust , price and authority are relatively ineffective means of dealing with knowledge-based assets. Therefore , as knowledge becomes increasingly important in our economy , we should expect high-trust institutional forms to proliferate. A review of trends in employment relations , inter-divisional relations , and inter-firm relations finds evidence suggesting that the effect of growing knowledge-intensity may indeed be a trend toward greater reliance on trust. There is also reason to believe that the form of trust most effective in this context is a distinctively modern kind—‘‘reflective trust’’—as opposed to traditionalistic , ‘‘blind’’ trust. Such a trend to reflective trust appears to threaten the privileges of currently dominant social actors , and these actors’ resistance , in combination with the complex inter-dependencies between price , authority , and trust mechanisms , imparts a halting character to the trend. But the momentum of this trend nevertheless appears to be self-reinforcing , which suggests that it may ultimately challenge the foundations of our capitalist form of society while simultaneously creating the foundations of a new , post-capitalist fo