Economic Organizations and Social Systems

Robert A. Solo’s landmark work, Economic Organizations and Social Systems, presents a sweeping re-examination of the foundations of economic theory and the paradigms that shape the teaching and practice of economics. Written originally outside the confines of the neoclassical tradition, Solo’s analysis seeks to break from convention and provide readers with a new paradigm—one that places the cognitive, cultural, historical, psychological, and political dimensions at the heart of economic understanding. This expanded edition, featuring a new preface, calls for a transformation in economics: a shift away from narrow models toward a holistic social science capable of addressing the complexities of modern economies. Solo offers a comparative analysis of three distinctive forms of economic organization: decentralized market-driven systems, organizational market-negotiated systems (such as large corporations and unions), and centralized politically-directed systems (drawing especially on the former Soviet Union). Each is assessed for efficiency, incentive structures, justice in income distribution, the quality of the social environment, and—critically—their capacity for technological development. The book goes beyond technical analysis, exploring how national economies are built from multiple, interdependent components: the enterprise, political, household, and institutional sectors. The third part delves deeply into the roles of culture, ideology, and cognition in shaping economic change, using the Russian Revolution and the developmental challenges of the Third World as major case studies.