ABSTRACT
Principally there are three systems for production and distribution of utilities in a society: the market, the hierarchy and the network. The general meaning of the systems can be summarized in the following way. The network is formed from ethnic, cultural and/or ideological links between individuals personally related to each other. The production and distribution of utilities are consequently carried out-that is, on an affective basis. Both the market and the hierarchy are expressions of an impersonal or abstract rationality: utilities are produced and distributed regardless of personal loyalty or friendship. The difference between the market and the hierarchy lies in the authority of agreements, which is decentralized in the former system and centralized in the latter. This means that the parties are entitled not to conclude an agreement in the market system, whereas the agreement is a responsibility in the hierarchy.
