This is a pretty profound statement:
Notice that, in the case of organizations and institutions as in the case of technology, standardization is arguably the fundamental source of increasing returns.
Richard N. Langlois, Knowledge, consumption, and endogenous growth
I'm going to have to reconcile this with my prioritization of my four "economic forces:" commoditization, virtualization, integration, and innovation. I'm also going to have to reconcile this with my prioritization of "modularity." I'm thinking that modularity is a means, and standardization is the end. Thus, contrary to some opinions (perhaps even my own at times): standardization is not a means of increasing modularity; modularity is a means of increasing standardization. This includes such forms of modularity as "division of labor."
The reasoning behind Langlois' assertion is I think captured in part by the following quote:
Consider the example of printing. If one is going to run off a few copies of a memo, a photocopy machine will do the trick. If one needs several hundred copies of documents on an ongoing basis, it might be worth investing in a small offset press. For even larger predictable production runs, it would pay to have a more serious printing press. As volume and predictability allow greater "durability of dies," unit costs decline. This is an effect of growth in the extent of the market distinct from the division of labor narrowly understood. And the reason that costs decline as dies become more durable is not because the knowledge itself leaks out but because the knowledge – created once – is spread over more and more units.
This means that increasing predictability in the system's environment (a market) favors increasing standardization of the system (the printing press). Even more generally: the behavior of the environment shapes the behavior of the system. But note that the system itself is part of the environment, so this creates a virtuous circle of environment shaping system shaping environment. And this shaping is in the direction of ever greater predictability and standardization.
(Is standardization then just a type of predictability? Is the direction of evolution then in the direction of organisms with ever greater predictability, including "predictive power"? Is the direction of evolution in the direction of ever greater standardization? Are ever greater predictability/predictive power the same as adaptability? How does this fit with increasing entropy?)
7:29:02 AM 
