The Origin and the Evolution of Firms

The Origin and the Evolution of Firms

By J. A. Roels
Book Description

The firms and markets of today's complex socio-economic system developed in a spontaneous process termed evolution, in just the same way as the universe, the solar system, the Earth and all that lives upon it. Darwin's theory of evolution clearly demonstrated that evolution involved increasing organization. As we began to explore the molecular basis of life and its evolution, it became equally clear that it depended on the processing and communication of information. This book develops a consistent theory of evolution in its wider sense, examining the information based laws and forces that drive it. Exploring subjects as diverse as economics and the theories of thermodynamics, the author revisits the paradox of the apparent conflict between the laws of thermodynamics and evolution to arrive at a systems theory, tracing a continuous line of evolving information sets that connect the Big-Bang to the firms and markets of our current socio-economic system.

Table of Contents
  • Title Page
  • Table of Contents
  • Introduction
    • Introduction
    • The main ambitions and features of this work
    • Organization of this book
    • Conclusion
  • Laws, Theories and Models
    • Introduction
    • The microscopic and the macroscopic approach to modeling
    • Macroscopic balance equations and state equations
    • Linear and non-linear systems theory
    • Why do we need models?
    • Conclusion
  • Macroscopic Thermodynamics
    • Introduction
    • Energy and the first law of thermodynamics
    • The second law of thermodynamics: The concept of entropy
    • Constraints due to the combined first and second laws
    • Free energy
    • Conclusion
  • Macroscopic and Microscopic Models: Statistical Thermodynamics
    • Introduction
    • Statistics and probability theory
    • Information theory: Quantifying information
    • Statistical thermodynamics
    • Conclusion
  • A General Theory of Transformations and Economic Transactions
    • Introduction
    • A general Economic Value Theory
    • The Capital Asset Pricing Model and Economic Value Theory
    • The nature of energy and value revisited
    • The second law of Economic Value Theory
    • The heat engine revisited and more
    • Forces in thermodynamics and Economic Value Theory
    • Transformation of information in economic value: The concept of price
    • A more generalized market transaction
    • Conclusion
  • Systems Theory of Evolution
    • Introduction
    • The linear value transducer revisited
    • Instability of steady states and evolution
    • The Benard problem and instability of the macroscopic branch
    • Instability of the macroscopic branch in chemical reaction systems
    • Evolution through fluctuation and selection: The general case
    • The starting point of biological evolution: Prebiotic evolution
    • Competition and sustained evolution
    • The dynamics of competition
    • Biological evolution: Dissipative structures
    • Conclusion
  • The Firm and Information Processing
    • Introduction
    • The dynamics of competition and selection
    • The error threshold in evolution
    • Models of Darwinian systems: The Hypercycle
    • Competition and selection: An approach based on EVT
    • The nature of the firm and its evolution
    • Differences and similarities between biological and economic evolution
    • Conclusion
  • Some Concepts of Economic Theory
    • Introduction
    • The nature of markets and industries
    • The nature of value and value transaction processes
    • Self organizing systems: Dissipative structures
    • The pivotal role of information
    • The internal value chain
    • Macroeconomics
    • Microeconomics: The interplay between demand and supply
    • Models of economic growth, business cycles
    • The behavioral theory of the firm
    • Transaction cost theory
    • Agency theory of the firm
    • Evolutionary theories of economics
    • Industry structure: The nature of entry barriers
    • Strategy development
    • Conclusion
  • The Evolution of the Universe
    • Introduction
    • Our present-day picture of the universe
    • Understanding the small and the large
    • Evolution of the structures in the universe
    • Conclusion
  • The Co-Evolution of Earth and Life
    • Introduction
    • The evolution of the solar system
    • Origin of earth
    • The formation of the continents, oceans and atmosphere
    • The origin of life
    • The proliferation of advanced life forms
    • The heat balance of earth
    • Conclusion
  • Human Evolution
    • Introduction
    • History of ideas about human evolution
    • Evolution of the apes
    • The relation between humans and the great apes
    • Genus Homo
    • Use of tools
    • Modern humans: The "Great Leap Forward"
    • Out of Africa model of human evolution
    • Conclusion
  • History of Science
    • Introduction
    • Pattern of the evolution of science
    • Early developments in science
    • Medieval Science
    • Impact of science in Europe
    • Modern science
    • Social sciences
    • Conclusion
  • The Evolution of Technology
    • Introduction
    • Drivers of technological progress
    • Geographical and temporal aspects of the evolution of technology
    • The industrial revolution
    • Conclusion
  • The Industrial Revolution
    • Introduction
    • Causes of the industrial revolution in Britain
    • Role of inventions and innovations
    • Continental Europe
    • The second Industrial Revolution and later evolution
    • Conclusion
  • The Development of Some of the Leading Firms
    • Introduction
    • An evolutionary view of corporate development: Gist-brocades
    • The evolution of some leading multinationals
    • The paradox of strategic planning
    • Conclusion
  • Tracing the Source and the Direction of Evolution: A Summary
    • Introduction
    • Non-equilibrium, free energy and economic value
    • The ubiquity of cyclic interaction
    • Evolution and sustainability
    • Reflections on predictability issues in evolution
    • Conclusion
  • Epilogu
    • Introduction
    • Summary of the highlights of the basic theory
    • The Origin of Markets and Firms
    • Prospects and challenges
  • Literature Cited
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