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Main Hypotheses

On the premises outlined in the previous sections, the first hypothesis in this book is that a complex set of events is, somehow surprisingly, leading enterprises to shift pragmatically from the modern-cognitivist approach to knowledge and innovation towards a hermeneutic approach. 'Surprisingly', because though the philosophical criticism of the unfoundedness of the modern way to knowledge dates from about the end of the Nineteenth Century, no-one would have expected that it would enter the social domain through enterprise, the champion of modernity. Enterprise actually founded its rise and success on the then implausible[1] message that Men can “become masters and possessors of Nature” (Descartes[2]). How this astonishing shift towards hermeneutic practices might have occurred constitutes the first issue this book will have to deal with.

In this connection, though the terrain of the cognitivist approach to knowledge and innovation has been widely explored (as the 'institution' of technology as a specific branch of applied science shows), the terrain of a hermeneutic approach still lies quite uncharted, and anyway is not systematically tackled by economics.[3] With reference to this point, the book puts forward a second hypothesis, according to which, while enterprises, independently of the degree of awareness of stakeholders, are pragmatically experiencing such a hermeneutic turn, mainstreameconomics is hanging back within the positivist-cognitivistic-individualistic viewpoint, [4] with the consequence that its approach to knowledge, creativity and innovation has become obsolete, precisely because new praxes have spontaneously come about within industry.[5]

What then has happened at the level of praxis, and what blockage has occurred in economics, to bear out such an interpretation? In relation to the first question this book suggests that a conjunction of factors is leading enterprises pragmatically to adopt an approach to knowledge different to that whereby they had been able to become, in modern times, the key agent in socio-economic development. These factors, which, taken in isolation, would not have been able to bring about such significant turn in just a couple of decades, can be summed up as follows:

(a) an increasingly pervasive critique of modernity. Originating in the sphere of philosophical thought and experienced in different ways in the realm of arts, this critique has found expression in the currents of postmodernism and hermeneutics, which differ in their ethical emphasis, as we shall point out shortly. One might have expected these developments to remain confined to such ethereal but admittedly fertile domains, or to penetrate only very slowly into social practices at large, probably as the younger educated generations enter the world of work. It is doubtful however whether they would have been able to come to the fore by virtue of their persuasive power alone, in terms of a change in cognitive practices within the world of production. To achieve this, they would have had to prove not only the superiority of the exercise of the suspension of judgement (which constitutes the fundamental common element of these theoretical developments; Rovatti, 1992) over the decision-making attitude typical of modernity and entrepreneurship, but also that this exercise can be profitably integrated into the system of rules, routines, conventions and techniques which characterises and, in the final analysis, 'structures' the institutions of capitalism;

(b) the rise to prominence of a culture of consumerist opulence in the second half of the last century. Although initially it seemed destined to remain subordinate to the aggressiveness and all-pervasiveness of the producers' marketing strategies, this culture has proved itself capable of generating new room for manoeuvre in consumer behaviour, albeit within or in relation to those forms of conditioning (de Certeau, 1990). In fact, while at the micro level these manoeuvres are tactical responses, incapable of affecting the on-going power struggle, taken together they present themselves objectively as strategies, which demand analogous strategic responses by producers. The admittedly conditioned creativity[6] of which consumers show themselves capable, led producers to become interactively and flexibly involved in the game of creativity, to relate to 'other' and evolutionary mental patterns and, finally, to changing situations where consumption is concerned. This has opened up a completely new field of opportunities for business to perform a shift of attention from consumer preferences, considered as given or, at most, to be actualised from their

latent status, to the socio-cultural processes that mould them. Significantly, the focus of business strategies has changed dramatically from the study of individuals in their aggregate manifestations to that of the individuals in their socio-cultural milieu;

(c) the rise, where enterprises are more specifically concerned, of a culture of competition through innovation rather than scale economies and, more generally, cost. According to a (now already dated) post-Fordist approach, this change in orientation is due to the absence of an institutional apparatus which is able to achieve market stabilisation at a global level, a pre-requisite if the opportunities offered by economies of scale are to be effectively exploited (Piore & Sabel, 1984). In line with a post-modern approach (which is less encumbered by any reference to Fordism), the change is rather due to the above-mentioned endlessly evolving consumer preferences with respect to the predictability initially supposed. Anyway, a shift has occurred within the content and meaning of innovation itself: rather than concerning the functional properties of goods (in relation to supposed given or induced needs), innovation increasingly concerns the symbolic connection consumers establish with goods, whereby consumption is understood as process of emotional relationship with others, and goods as 'experiential' items (Holbrook & Hirschman, 1982). Last but not least, the changed epistemologies of collectives that, following such thinkers as Deleuze and Guattari (1986), Latour (1993), and more recently Bennett (2010), point to a proliferation of individual hybrids and transindividual human/nonhuman assemblages. This has brought a realisation that enterprises are not isolated observers but parts of larger and indeed unpredictable assemblages of spatial and temporal considerations that must take into account the current doubting and redrawing of traditionallythought lines of distinction between the human, the natural and the artificial, the organic and the inorganic, the topological and the ethical, and so on. Ecological considerations are now taking centre stage in rhetorical and applied strategies, redefining responsibility in a much broader and inclusive manner than simply the enterprise-consumer nexus;

(d) the advent of the telematics revolution, which has served as the catalyst in precipitating all the above-mentioned circumstances into a new communicative-and-creative praxis within enterprises, but also in society at large. As Cusinato notes in this book, routine communication inside enterprise previously required recourse to the human factor, since the peripheral monitoring devices only worked in analogue mode, without any possibility of their being integrated into a complete monitoring system. It is therefore possible to realise how crucial the concern was to coping with ambiguity within those circuits in the mechanical-Fordist era (Sennet, 2006). With the advent of ICTs it became possible fully to integrate the peripheral monitoring devices into a single 'digital' network, thus making human intervention superfluous in syntactic communication, but freeing its generative potential in dialogical communication. At the same time, the mythology that precedes and reinforces the ICT revolution in all its phases (including its current manifestation), has enabled the fusion of a semantics of human superfluity with the material aspect of the shortcomings of the said revolution, to the point that most material gaps and inconsistencies are bridged by a semantic intervention of some telematic Hegelian Aufhebung. The main suggestion in this connection is that, given the philosophical and cultural premises mentioned above, the establishment of dialogical practices within firms, which is connected to the ICT revolution, opens the way to their entry as normal practices—i.e., praxis—into the social domain at large: in our approach, this would mark entrance into the

'knowledge age'.[7]

In relation to the blockage of economics within cognitivism while praxis would have set off along broadly 'post-modern' paths, this is due to the enduring link between methodological individualism and logical-empiricism within the neoclassical economics (or economics tout court). What allowed the latter to attain a status tantamount to natural science, was its adhesion to the Newtonian mechanistic paradigm, according to which the behaviour of any observable object can be traced back to the properties (which are given) of its elementary parts. So, on the one hand, a bi-univocal relationship between given or exogenously determined individual properties and aggregated behaviours is established within economics (methodological individualism); and on the other, only objectively observable properties and their logical derivatives are taken into consideration (logical-empiricism), and among these derivatives, the chief idea that homo œconomicus acts as a maximising computational machine (cognitivism) (Klamer, 1990). If this mechanist feature has endowed economics with a consistent analytical basis, this has occurred at the cost of (a) isolating the homo œconomicus' rationale from the complex system of inclinations, emotions, passions and, more comprehensively, apparently irrational elements which shape both individual and collective behaviours and (b) equating the socio-economic whole to the mechanical summation of its parts. As concerns the first aspect, the present work will show how the emotional component is co-essential to the cognitive process and hence creativity, as post-modern thought suggests; with respect to the second aspect, one could oppose that the insertion of agglomeration economies within the neoclassical economic theory exhaustively explains possible non-linear outcomes without invalidating the individualistic approach. However, it is one thing to assume that the working of those economies releases some properties that are inherent in the elementary parts; and a completely different thing to suggest that certain milieu conditions (rather than the more functionalist term 'agglomeration economies') modify those basic properties, as a structuralist approach does. As mentioned above, we think that a hermeneutic approach to knowledge and creativity fits with both the post-modern claim for a cautious perspective on the mind's ability to advance towards truth (however it may be conceived) and the structuralist claim for the generative capacities of certain milieu conditions that stay outside the individual handling capacities.

  • [1] See Le Goff (1964), Lenoble (1969)
  • [2] A Discourse of Method. Available at: gutenberg.org/files/25830/25830-h/25830-h. htm
  • [3] In one of the few writings on the relationships between hermeneutics and economics, Don Lavoie notes that, whereas very little of the literature on the shift from the positivist towards a hermeneutic approach “has taken up economics explicitly [.. .,] contemporary economics has for the most part simply ignored the 'interpretative turn'. [.. .] economics and hermeneutics have by now grown so far apart” (Lavoie, 1990, pp. 3–4). The main exceptions are Old Institutionalism and the Austrian School, which the contributors to Lavoie's work often refer to. For a more recent review, see Priddat (2012). There is a crucial difference however in the ways this literature and our work understand relationships between hermeneutics and economics: whilst the former takes on a hermeneutic viewpoint of economics, our work is interested rather in examining how and with what consequences hermeneutic praxis is now entering the economy, despite the widespread indifference of mainstream economics. This latter recognition in any case represents the common starting point of the two approaches
  • [4] For a review, see Noorderhaven (2004), who conclusively notes: “Judging by what is published in the major research journals, it seems fair to say that the majority of the international business researchers implicitly or explicitly adhere to a philosophy of science that is closer to logical empiricism than to hermeneutics” (p. 91)
  • [5] Whilst starting from a philosophical rather than pragmatic viewpoint, Mirowski (1990) foresees that “neoclassical economics [.. .] will find itself progressively isolated from [now emerging] cultural conceptions, defending an increasingly reactionary conception of 'natural order' as mechanically deterministic and static” (p. 105)
  • [6] In reality, could a form of non-conditioned creativity ever be conceivable? Is it not the will to gain further degrees of freedom from conditioning that stimulates it?
  • [7] This point is drawn from Compagnucci and Cusinato (2011)
 
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