May I remark, especially for the benefit of economists, that consideration of the medical care market and of the insurance situation represents not o… - Kenneth Arrow

An organization is typically composed of changing individuals. Now any individual generally has access to many communication channels, of which this particular organization is only one. In particular, education is such a channel. Thus, the organization is getting the benefit of a considerable amount of information which is free to it.

Nevertheless, when all due allowances are made, the coherence of individual economic decisions is remarkable. As incomes rise and demands shift, for example, from food to clothing and housing, the labor force and productive facilities follow suit. Similarly, and even more surprising to the layman, there is a mutual interaction between shifts in technology and the allocation of the labor force. As technology improves exogenously, through innovations, the labor made redundant does not become permanently unemployed but finds its place in the economy. It is truly amazing that the lessons of both theory and more than a century of history are still so misunderstood. On the other hand, a growing accumulation of instruments of production raises real wages and in turn induces a rise in the prices of labor-intensive commodities relative to those which use little labor. All these phenomena show that by and large and in the long view of history, the economic system adjusts with a considerable degree of smoothness and indeed of rationality to changes in the fundamental facts within which it operates.

The purpose of organizations is to exploit the fact that many (virtually all) decisions require the participation of many individuals for their effectiveness.