A Model of Network Capitalism: Basic Ideas and Post-Soviet Evidence
Modern discussions on network capitalism shed light on the thesis about the existence of a plurality of models of capitalism. According to a quantitative evaluation of managerial and economic literature, the frequency with which the term "network" is used has risen dramatically during the last decade (Boltanski and Chiapello 1999). The basic idea of network capitalism involves the localization of transactions: economic subjects act locally instead of being involved in transactions in a depersonalized market with a potentially unlimited number of participants. Mainstream economics has never been characterized by any special interest in the interactions between participants that are socially and spatially close. "Spatial economics and particularly the theory of the location of industrial enterprises flourished in the 19th century, but they were developed in complete isolation from mainstream economics, both classical and neoclassical" (Blaug 1994, 568). This should come as no surprise since a limited number of participants and their nontrivial capacity for influencing outcomes contradict the principles of perfect competition and distort the price mechanisms for reaching a general equilibrium. Even economists who were interested in localized transactions usually paid attention only to spatial closeness; they have been studying the issues related to differential rent, transportation costs, and so on. But geographical space is not the only factor of localization. The same process can be observed in institutional and social spaces. For example, a deal with a supplier that is geographically close can increase costs, if there are doubts as to his reliability. The concept of net-