Much of economics concerns itself with micro phenomena; and this ‘sociology with dollar signs’, being cultural and local, is necessarily indeterminate. At the remove however many levels of abstraction, these microeconomics still underlie the macroeconomic world above. If the indeterminacy of micro phenomena are to be conceptually insulated from the possibilities for a computable, marginalist macroeconomics, then economic science must open itself to the notion that ‘emergence’ has more relevance to material affairs than ‘reductionism’. Another example from biology will serve to orient our discussion toward this alternate view.

When birds and fish are examined individually, that is in terms of their essential characteristics, it is obvious that they are quite different animals; and their methods of locomotion though the fluid media of their environment could not be more distinct. Yet those fish that school in shoals and those birds that fly in flocks present quite similar descriptions as to their macro behaviors. Obviously, this similarity in macro systems must find its explanation in some necessity other than that which determined the the means by which these two species move about.

Systems of shoaling fish and flocking birds have likely evolved for one and the same purpose, i.e.: preservation the greatest number of individuals from predators. It should not, therefore, be surprising to find that the overall behaviors of these systems can be accounted for by attributing the same motives to the individuals of either species: 1) the individual is always seeking greater safety in the group’s center; while 2) seeking to avoid collision with other individuals by maintaining a safe distance from them.

Schooling or flocking behavior is said to ‘emerge’ in that its causality is independent from the biological characteristics of whatever individual species participates in the macro phenomena of the school or flock. The importance of these considerations for economics should be that, if micro and macro behaviors exist for different reasons, there can be no expectation of continuity in the representations of behavior from the micro level of abstraction to the macro.

SFEcon turns on the premise that firms exist for purposes that are different from those controlling economic sectors composed of many firms. Thus we do not accept the reductionist tenet that broad causal notions such as ‘bill of materials constraints’ or ‘marginalism’ must apply equally at the micro and macro levels of abstraction in order to be true.

And, where we find distinctions between micro and macro causality, mainstream economics has the individual firm modeled by its production function, and models the economic sector by what amounts to a strict bill of materials dictated by observed input/output relations for the entire economy. To our way of thinking, these considerations would make more sense in the reverse: bills of materials are proper to the firm because firms are defined by the product they create and products are defined by their components; production functions are proper to the sector because a sector’s inputs are the outputs of other sectors.

In any case, SFEcon 1) elevates the ‘marginalist’ concept of a generic firm to describe an economic sector composed of all firms producing the same product; and 2) leaves the ‘bill of materials’ account of a generic economic sector among the descriptors of a firm. Moreover, we presume that all economic sectors exist for one and the same reason — maximization of return — while firms exist for such a complicated mixture of reasons as to defy generalization.