22 Chapter 1
the incongruities of material behavior and the sharp logic of computing,
feedback—even more than the cybernetic watchwords information, control,
and equilibrium—emerges as a clean concept for attempting to domesticate
all kinds of unruly communication systems. In 1943, Warren McCulloch
introduced the companion, although largely neglected, notion of heterarchy,
which serves as a useful lens for focusing scrutiny on the Soviet case. This
cybernetic concept helps describe some of the sources of conflict that beset
Soviet cybernetic attempts to network their command economy.
Let us set up this argument with a glimpse into institutional networks of
actors that are based on neither flat market nor hierarchical states but on
this third or middle way of heterarchy. The cold war organizational tropes
for self-regulation break down along that spectrum of economic order that
conventionally opposes market and hierarchy. In this view, the market is
understood as a flattened space for free interaction and efficient possibility
discovery among varied economic actors, and the hierarchy is understood
as a well-ordered, top-down pyramid of superiors over subordinates that is
well suited for completing long-term and complex tasks. Etymologically,
the English market is by far the newcomer of the two and can be traced back
to the mid-thirteenth-century Italian term for a “public building or space
for trading, buying, and selling.” The term market economy is first noted in
English only in 1948, centuries after the early modern capitalist revolution
that gave it fame and that has since enjoyed a privileged if often misunder-
stood position in the Western vocabulary of modern politics, economics,
and society. One reason for justifying the Pareto efficiency of the market
rests on the transitivity of human preferences. For the market to be the
ideal organizational mode, some economists assume that rational actors
will rank the order of their preferences linearly: if rational actors prefer
option A over B as well as option B over C, they also will prefer option A
over C. Yet this view of the market has been challenged in recent decades.
Markets hide transaction costs and information asymmetries. Behavioral
economists have demonstrated how under a number of conditions (such
as fear, regret, the threat of loss, cognitive dissonance, or peer pressure) the
rational homo economicus is a fiction: a person may prefer apples to bananas,
bananas to cantaloupes, and cantaloupes to apples, and there is no guaran-
tee that there exists a rational solution to voting systems or daily choices
involving three or more actors.^24
By contrast, the concept of hierarchy (from the Greek term ἱεραρχία, “rule
by priests”) reaches back fifteen centuries to religious roots. As sociologist of
economics David Stark shows, the term was first used by a Christian medi-
eval theologian who is known today as the Pseudo-Dionysius the Areopagite.