The triumph of the market economy over planned economic organisation is perhaps the greatest economic story of our lifetime.  There are broadly two elements to an account of why this happened:

• the efficiency model.   Prices act as signals, which are the result of a plebiscite on costs and values.  These signals provide a better guide to the allocation of resources than bureaucratic decisions
• the dynamic model.   Markets are a process of discovery and experiment.  Such discovery takes place in a context of disciplined pluralism, in which unsuccessful experiments are rapidly terminated and successful ones rapidly imitated.

These models map, though not exactly, on two different accounts of the nature of corporate organisation.

• the contractual model.   Self-interested individuals come together in corporate entities to derive economies of scale and scope from shared production facilities.
• the organic model.   Corporations are collections of capabilities and are distinguished by the nature of their capabilities and the degree to which they match the environment in which they operate.

       These models are complementary rather than incompatible, but the second account – dynamic markets, organic corporations – is a much more important element in the success of western economies than the first.  In the two decades since the collapse of the Berlin Wall, we have pursued the efficiency/contractual obsessively – and ultimately destructively – at the expense of the first.  The future of markets depends on understand that error and creating a future that recognises the dynamic nature of the market economy and the organic nature of the corporation.