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Cognitive comparative advantage and the organization of work: Lessons from Herbert Simon's vision of the future

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  • Langlois, Richard N.

Abstract

In a marvelous but somewhat neglected paper, 'The Corporation: Will It Be Managed by Machines?' Herbert Simon articulated from the perspective of 1960 his vision of what we now call the New Economy the machine-aided system of production and management of the late twentieth century. Simon's analysis sprang from what I term the principle of cognitive comparative advantage: one has to understand the quite different cognitive structures of humans and machines (including computers) in order to explain and predict the tasks to which each will be most suited. Perhaps unlike Simon's better-known predictions about progress in artificial intelligence research, the predictions of this 1960 article hold up remarkably well and continue to offer important insights. In what follows I attempt to tell a coherent story about the evolution of machines and the division of labor between humans and machines. Although inspired by Simon's 1960 paper, I weave many other strands into the tapestry, from classical discussions of the division of labor to present-day evolutionary psychology. The basic conclusion is that, with growth in the extent of the market, we should see humans 'crowded into' tasks that call for the kinds of cognition for which humans have been equipped by biological evolution. These human cognitive abilities range from the exercise of judgment in situations of ambiguity and surprise to more mundane abilities in spatio-temporal perception and locomotion. Conversely, we should see machines 'crowded into' tasks with a well-defined structure. This conclusion is not based (merely) on a claim that machines, including computers, are specialized idiots-savants today because of the limits (whether temporary or permanent) of artificial intelligence; rather, it rests on a claim that, for what are broadly 'economic' reasons, it will continue to make economic sense to create machines that are idiots-savants.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Psychology.

Volume (Year): 24 (2003)
Issue (Month): 2 (April)
Pages: 167-187

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Handle: RePEc:eee:joepsy:v:24:y:2003:i:2:p:167-187

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Web page: http://www.elsevier.com/locate/joep

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References

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  1. Richard N. Langlois & Metin M. Cosgel, 1996. "The Organization of Consumption," Working papers 1996-07, University of Connecticut, Department of Economics.
  2. Young, Allyn A., 1928. "Increasing Returns and Economic Progress," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 38, pages 527-542.
  3. Paul L. Robertson & Lee J. Alston, 1992. "Technological choice and the organization of work in capitalist firms," Economic History Review, Economic History Society, vol. 45(2), pages 330-349, 05.
  4. Nelson, Katherine & Nelson, Richard R., 2002. "On the nature and evolution of human know-how," Research Policy, Elsevier, vol. 31(5), pages 719-733, July.
  5. Babbage, Charles, 1832. "Economy of Machinery and Manufactures," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number babbage1832.
  6. Cosmides, Leda & Tooby, John, 1994. "Better than Rational: Evolutionary Psychology and the Invisible Hand," American Economic Review, American Economic Association, vol. 84(2), pages 327-32, May.
  7. Pratten, Clifford F, 1980. "The Manufacture of Pins," Journal of Economic Literature, American Economic Association, vol. 18(1), pages 93-96, March.
  8. Langlois, Richard N & Cosgel, Metin M, 1993. "Frank Knight on Risk, Uncertainty, and the Firm: A New Interpretation," Economic Inquiry, Western Economic Association International, vol. 31(3), pages 456-65, July.
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Cited by:
  1. Estrada, Fernando, 2010. "Los mercados de opinión pública
    [The markets of public opinion]
    ," MPRA Paper 20161, University Library of Munich, Germany.
  2. Cordes, Christian & Richerson, Peter J. & McElreath, Richard & Strimling, Pontus, 2008. "A naturalistic approach to the theory of the firm: The role of cooperation and cultural evolution," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 125-139, October.
  3. Consoli,Davide & Vona,Francesco & Rentocchini,Francesco, 2014. "That was then, this is now: Skills and Routinization in the 2000s," INGENIO (CSIC-UPV) Working Paper Series 201306, INGENIO (CSIC-UPV).
  4. Stracca, Livio, 2004. "Behavioral finance and asset prices: Where do we stand?," Journal of Economic Psychology, Elsevier, vol. 25(3), pages 373-405, June.
  5. Jackie Krafft & Francesco Quatraro & Pier Saviotti, 2014. "Knowledge characteristics and the dynamics of technological alliances in pharmaceuticals: empirical evidence from Europe, US and Japan," Journal of Evolutionary Economics, Springer, vol. 24(3), pages 587-622, July.
  6. Richard Langlois, 2013. "The Institutional Revolution: A review essay," The Review of Austrian Economics, Springer, vol. 26(4), pages 383-395, December.
  7. David Harper, 2008. "A bioeconomic study of numeracy and economic calculation," Journal of Bioeconomics, Springer, vol. 10(2), pages 101-126, August.
  8. Garzarelli, Giampaolo & Limam, Yasmina Reem & Thomassen, Bjørn, 2007. "Open Source Software and Economic Growth: A Classical Division of Labor Perspective," MPRA Paper 3849, University Library of Munich, Germany.
  9. Estrada, Fernando, 2010. "Economics and Rationality of organizations: an approach to the work of Herbert A. Simon," MPRA Paper 21811, University Library of Munich, Germany.

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