The Economy of Discourses: a 3 0 cybernetics? Philip Boxer & Vincent Kenny Revised 24 th February 1998 1 The Economy of Discourses: a third order cybernetics? Philip Boxer & Vincent Kenny Abstract This paper introduces the idea of, and necessity for, a 'third-order cybernetics'. It does this through the critique and problematisation of the ontology of the observer as elaborated within a second-order cybernetics. The necessity for this third-order is directly generated from our work as strategy consultants and our needs to evolve an effective, coherent and ethical consultancy practice. The paper draws primarily on the writings of Lacan and Maturana to provide the epistemological presumptions upon which we generate a new characterisation of, and approach to, the business organisation. This new approach for the understanding of the business organisation is presented as an 'Economy of Discourses'. This Economy is a description of the effects of a third-order in the second-order observer's invention of himself as subject. We have formulated this approach as an aid for diagnosis, intervention and prognosis in our work with business organisations. We include two case studies, one of a chemicals-based manufacturer, the other of a large accountancy practice. In these two cases we seek to unpack and illustrate the way in which it is possible to use the new approach, and to highlight the principles which allow the consultant maximal movement and effectiveness in relation to his client system. We end by outlining the implications of our approach for an ethics of consultancy. Published in Human Systems Management in 1990 Volume 9 Number 4 pp 205-224. Philip Boxer (1948) B.Sc. M.Sc., has since 1983 focussed on working with individuals and management teams seeking to bring about organisational and infrastructural change in the context of their work. He has taken a particular interest in the role information can play in supporting change. Prior to developing his own consultancy practice, he was attached to the Centre for Management Development at the London Business School. Vincent Kenny (1948) BA(Mod.), MA, M.Sc., is the director of the Institute of Constructivist Psychology in Dublin, and the director of Training at the Dept. of Psychiatry, University College, Dublin. He is also a consultant with Syman in Rome, a company of international management/organisational consultants. He has published widely and is editor and guest-editor of several scientific journals.