The current state of the economic theory of the firm: Contractual, competence-based, and beyond

Together with the market – and the modern State – the firm is one of the main

institutions of capitalism. We can even consider it the central institution, despite

the fact that contemporary economic discourse tends to attach more importance

to the market. As Simon points out so pertinently (1997: 35):1

. . . Any creature floating down to our Earth from Mars would perceive the developed regions to be covered mostly by firms, these firms connected by a

network of communications and transactions that we know as markets.