Functional Differentiation
Term that refers to the division of society in different independent subsystems. The concept was developed by the German sociologist Niklas Luhmann (1927-1998).
Every social system is self-reliant and has its own function in society. It is based on an individual communication and interacts with a specific media. This media again contains a specific code, meaning that every social system operates according to its own criteria (the system of politics, for instance, according to the code power/non-power; the subsystem of the mass media distinguishing between information/non-information). Luhmann identifies different social subsystems such as economy, religion, politics, law, science, education, family etc. The result is a decentralized concept of society.
In terms of economy the medium of communication is money and the corresponding code is payment or non-payment. Luhmann defines society as an autopoietic system that consists only of communication. The subsystem reproduces itself according to the underlying code, independently from its environment, as a closed unit. This leads to the effectiveness of every functional system.
Politics were seen as the centre of society for a long time. On the basis of functional differentiation the political system is also an operationally closed system using the medium of power and the code of power over non-power. The political system rather gains more influence than other functional systems by its connection to the legal system. Luhmann calls these connections structural couplings enabling a combined decision-making. The control over another functional system is impossible.
References
http://www.goethe.de/ges/phi/prt/en9663271.htm http://www.itas.fzk.de/deu/Itaslit/best02a.pdf http://www.seminar.net/files/LarsQvortrup-SocietysEdSystem.pdf