ABSTRACT
Business organization has never fit easily into the model of perfect competition. In the most consistent and complete development of perfectly competitive theory, general equilibrium analysis, business organization has no meaningful place. Gerard Debreu’s Theory of Value (1959) makes no mention of business firms, nor is there need for them. In general equilibrium, each person carries out his individual production and exchange plans without assistance from organizations. In Arrow and Hahn’s General Competitive Analysis (1971), firms are mentioned throughout the work, but never as organizations; firms are simply individuals who make production decisions in the same way that households are individuals who make consumption decisions. Below, I examine the reasons that business organization is unnecessary in a perfectly competitive economy. Here I simply note that perfect competition has no place for one of capitalism’s most distinctive institutions – organized enterprise.
