Coordination

When left to their own devices, individuals’ pursuit of their personal objectives may inadvertently hinder other individuals in the pursuit of their personal objectives, even if these objectives are not irreconcilable. In other words, individuals can unnecessarily get in each other’s way when they pursue their personal objectives. An important public objective is to organize the pursuit of personal objectives in such a way that such disorderliness is minimized. This associated public task may be labelled coordination.

The organization of traffic is a simple example. Each individual is pursuing her own personal objective as she undertakes the task of moving from place A to place B. Whatever those personal travel objectives may be, the objectives of various people simultaneously moving about in traffic do not usually conflict with each other. Everyone can reach their intended destination, and the fact that one person reaches her destination does not make it more difficult or easier for any other person to reach her destination. In other words, cooperation would not make the fulfillment of these personal objectives easier.

Every driver’s personal objectives can, however, be more easily fulfilled by coordination. Traffic flows much more smoothly when each individual’s pursuit of her personal travel objective is guided by a general and widely used system of regulations. Teamwork is not needed, and individuals do not have to compromise their personal objectives in order to reach them. Such social problems may be called pure coordination problems.

On a smaller scale, solving pure coordination problems does not require laws, but simply plans. If an office with 15 workers  requires the presence of at least five persons between 8 o’clock and 18 o’clock, it is sufficient to do day-by-day planning one or two days ahead to ensure that this condition is met. Rules and plans for solving pure coordination problems are typically not much disputed, because most people can easily recognize their utility and are indifferent to their detailed content as long as they serve their purpose.

Sometimes the (putative) coordination problem can even solve itself (i.e., it can be discovered that the problem does not exist) if task-related data can be collected from all participants. For example, if all workers share their work calendars with each other, it may be discovered that five persons will in fact be present at the required time on one or more days, and no planning is then needed for those days.

This could in principle work even in the larger context of traffic, where a central computer could inform you that you are today the only driver on the road, so no coordination problem exists and you can freely drive in any direction you want. But more realistically, data collection can serve as guidance which partly reduces the scale of large coordination problems, for example in the form of a computer which tells nearby incoming drivers to circle around a traffic jam when it detects that cars are accumulating somewhere.

If no authority provides a rule or plan for solving a coordination problem, some form of solution usually emerges spontaneously. Traffic in Egyptian metropolises is said to be unguided by formal rules – each participant simply learns to go with the flow by following the example set by other drivers. Key components of spontaneous coordination are the conventions which are passed around from driver to driver by daily first-hand interactions on the street.

Small-scale coordination problems, like the one at the office, are not solvable on a completely spontaneous basis if they require personal sacrifices from some of the workers. If some workers have to sacrifice heir own freedom of choice to achieve the task, then the problem is no longer a pure coordination problem – it also includes an element of compromise.

Coordination problems also occur in markets. Market trade can be coordinated completely spontaneously, by the actions of individuals who focus on their own interests, and by the social conventions that they institute. But isolated individuals can coordinate so far as their first-hand interactions and first hand knowledge allows them to establish trustworthy connections with other market participants. As in the previous examples, a higher authority, such as the state, can greatly increase market coordination by setting rules which, for example, forbid fraud and facilitate bankruptcy, and by collecting and disseminating trust-inducing information such as official registers where important information about each market participant is publicly disclosed. But market trade also automatically includes elements of teamwork  and compromise, so it is not a pure coordination problem and I will have more to say about it in my next essays.

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