Introduction

One of the most fundamental and recurring discourses in political economy has concerned how society should be instituted in terms of self-organized markets versus conscious government regulations, intervention and planning. In this chapter we join this discourse from a quite specific and original perspective. If we take it seriously that knowledge is the most fundamental resource in our contemporary economy and that learning is therefore the most important process, what are the implications for the institutional set-up of the economy? And what are the implications for economic theory? What are the consequences for the plan / market discourse?

The institutional set-up of modern capitalism may be analysed from two perspectives: what is and what should be. In this chapter we primarily present reflections on what is from the perspective of how it affects the use of knowledge and learning. Starting from assumptions regarding the character of knowledge, learning and innovation, we end up by supporting the stance of the Swedish institutionalist economist Johan Åkerman quoted above. The learning economy is, and must be, ‘a mixed economy’, and it is mixed in a much more fundamental sense than normally assumed.

We cannot totally avoid the discussion of what ‘should be’, however. Specifically we conclude that many of the most common arguments for and against the free market are either mistaken or one sided. There is actually a need to reopen the old discourse on a totally new basis: How does the market mechanism allocate knowledge and how does it affect learning? This is especially interesting in a period characterized by post-F ordism in the West and by postsocialism in the East. The need for open mindedness about how to organize the economy is greater than ever, while adherents to mainstream economics seem to believe that the breakdown of socialism marked the final victory of pure capitalist principles.