The Strategy Function

In order to understand the strategic response we need a new vision concerning the objectives of human society and its macroeconomic relationships. New visions are reflected in new metaphors. The neoclassical metaphor for modern society is the factory dominated by the machine. Orthodox economists see society as an organization that maximizes its economic output from a given set of inputs and state of technology. They see society working out its objectives within the context of the aggregate production function. This, I argue, constitutes a distorted vision of reality. Human society is not a factory but a strategic organization, and social dynamics is not a production process but a strategic pursuit. Accordingly we need to replace the neoclassical production function in our dynamic models with what I propose to call the strategy function.