The Institutionalist Implications of the General Systems Theory: The Societal Role of the Market

This paper examines how the general systems theory informs institutionalism, a strand of heterodox economic theory founded by Thorstein Veblen that is marked by a critical attitude towards the operation of real‐world markets. Focusing on Laszlo's systems philosophy and Bogdanov's Tektology , the paper shows that the general systems theory supports the institutionalist critique of the market but is more explicit about the significance of the market in ensuring the material self‐provisioning aspect of society. In line with the institutionalist critique, both Bogdanov and Laszlo share the concern that the market may not deliver the appropriate level of systemic integration within society, nor between society and the encompassing nature. However, both Bogdanov and Laszlo are shown to moderate the institutionalist critique by emphasizing the market's stabilizing and protective role, which is needed to safeguard the maintenance of social and technological complexity.