7 ms·

Where can I find more information about the theories that claim companies exist to be communist? I don't buy the "first to win argument", but it would seem use

Where can I find more information about the theories that claim companies exist to be communist? I don't buy the "first to win argument", but it would seem useful to take multiple approaches to solving the same or similar problems.

Avshalom 10y ago
Coase's Theory of the Firm https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm although I think fiatmoney is conflating a centrally planned command economy with communism.
- CamperBob2 10y ago
  although I think fiatmoney is conflating a centrally planned command economy with communism. Seems like a distinction without a difference, considering that every time a nation tries to implement the latter they end up with the former as an "intermediate stage" of the revolution that somehow never goes away. In a corporate body, there is no pretense that central planning is a transitional stage. There are a few exceptions like Valve and Zappos, but even fewer genuine success stories where a non-hierarchical structure has outperformed traditional ones in the long run.
  - Avshalom 10y ago
    Well the fascist countries for instance traditionally had a centrally planned command economy too, and 'fascist' (although that word has perhaps even more baggage than communism) is probably a closer fit to how companies act than 'communist'. Also while "crazy ass dictatorship" lacks any sort of unified political/economic manifesto, they always seem to end up looking like centrally planned economies too, though fewer companies of any real size end up as "crazy ass dictatorships" thanks to the magic of bureaucracy.
    - CamperBob2 10y ago
      Yes, in the US, "fascist" is a general-purpose insult directed at whatever politicians or parties the speaker doesn't like. One of those terms that brings more heat than light.
  - Qworg 10y ago
    I think that Morningstar is an even better, non-tech example with lower skilled workers - it shows that self organization works, even in normal firms. http://www.inc.com/audacious-companies/leigh-buchanan/morning-star.html http://www.inc.com/audacious-companies/leigh-buchanan/mornin...
abtinf 10y ago
"Communist" is a loaded word, but it gets at the idea. One of the thorniest problems in business economics is this: we know free markets produce extraordinary results, but why is it that even in the absence of regulation, so little of the economy is structured as a free market? Very few businesses of any size operate internally as a market, instead they usually operate under hierarchical command and control. Markets generally exist only at the interfaces between organizations. Why don't teams bid competitively within a company? How do individuals decide on the teams to form? Why are managers allowed to rise to the point of failure? Why do we pay people salaries instead of hourly wages? Why do we hire hourly wage labor as if though its was permanent? The number of questions raised by this topic is endless. The most general explanation is this: yes, companies adopt inefficient structures, but they more than make up for this through significantly reduced transaction costs.
- michaelmrose 10y ago
  "Why do we hire hourly wage labor as if though its was permanent?" At the current cost of hourly labor if you made it even more like temporary labor than it already is the quality of worker you could obtain at that price would be terrible.
- jsprogrammer 10y ago
  Some regulation is necessary to even define a free market. If you believe current US (at least for most of the population) law theory, all employment relationships are completely at-will. They may be terminated at any time for any reason. I would argue that is all that is required for a free market. This would seem to contradict the claim that most companies to not internally operate as a market. I know there exist serious breaches of this freedom (ie. slavery), but it is not supposed to be the norm anymore.
- danieltillett 10y ago
  I have always thought that it was because the level of planning required to run a small to medium sized company is just able to be handled by the human mind. Economy level planning is just too complex for humans and we have to fall back on the next most efficient structure - free markets.
danidiaz 10y ago
See also this old EconTalk interview: http://www.econtalk.org/archives/2008/01/munger_on_the_n.html http://www.econtalk.org/archives/2008/01/munger_on_the_n.htm...
barney54 10y ago
Read Ronald Coase's Nature of the Firm: http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf It isn't really that firms are communist internally, but that firms exist to reduce transactions costs. Such as contracting for every thing every day (i.e. I don't need a new contract every single day at my job).

Avshalom 10y ago

Coase's Theory of the Firm https://en.wikipedia.org/wiki/Theory_of_the_firm https://en.wikipedia.org/wiki/Theory_of_the_firm although I think fiatmoney is conflating a centrally planned command economy with communism.

CamperBob2 10y ago
although I think fiatmoney is conflating a centrally planned command economy with communism. Seems like a distinction without a difference, considering that every time a nation tries to implement the latter they end up with the former as an "intermediate stage" of the revolution that somehow never goes away. In a corporate body, there is no pretense that central planning is a transitional stage. There are a few exceptions like Valve and Zappos, but even fewer genuine success stories where a non-hierarchical structure has outperformed traditional ones in the long run.
- Avshalom 10y ago
  Well the fascist countries for instance traditionally had a centrally planned command economy too, and 'fascist' (although that word has perhaps even more baggage than communism) is probably a closer fit to how companies act than 'communist'. Also while "crazy ass dictatorship" lacks any sort of unified political/economic manifesto, they always seem to end up looking like centrally planned economies too, though fewer companies of any real size end up as "crazy ass dictatorships" thanks to the magic of bureaucracy.
  - CamperBob2 10y ago
    Yes, in the US, "fascist" is a general-purpose insult directed at whatever politicians or parties the speaker doesn't like. One of those terms that brings more heat than light.
- Qworg 10y ago
  I think that Morningstar is an even better, non-tech example with lower skilled workers - it shows that self organization works, even in normal firms. http://www.inc.com/audacious-companies/leigh-buchanan/morning-star.html http://www.inc.com/audacious-companies/leigh-buchanan/mornin...

abtinf 10y ago

"Communist" is a loaded word, but it gets at the idea. One of the thorniest problems in business economics is this: we know free markets produce extraordinary results, but why is it that even in the absence of regulation, so little of the economy is structured as a free market? Very few businesses of any size operate internally as a market, instead they usually operate under hierarchical command and control. Markets generally exist only at the interfaces between organizations. Why don't teams bid competitively within a company? How do individuals decide on the teams to form? Why are managers allowed to rise to the point of failure? Why do we pay people salaries instead of hourly wages? Why do we hire hourly wage labor as if though its was permanent? The number of questions raised by this topic is endless. The most general explanation is this: yes, companies adopt inefficient structures, but they more than make up for this through significantly reduced transaction costs.

michaelmrose 10y ago
"Why do we hire hourly wage labor as if though its was permanent?" At the current cost of hourly labor if you made it even more like temporary labor than it already is the quality of worker you could obtain at that price would be terrible.
jsprogrammer 10y ago
Some regulation is necessary to even define a free market. If you believe current US (at least for most of the population) law theory, all employment relationships are completely at-will. They may be terminated at any time for any reason. I would argue that is all that is required for a free market. This would seem to contradict the claim that most companies to not internally operate as a market. I know there exist serious breaches of this freedom (ie. slavery), but it is not supposed to be the norm anymore.
danieltillett 10y ago
I have always thought that it was because the level of planning required to run a small to medium sized company is just able to be handled by the human mind. Economy level planning is just too complex for humans and we have to fall back on the next most efficient structure - free markets.

danidiaz 10y ago

See also this old EconTalk interview: http://www.econtalk.org/archives/2008/01/munger_on_the_n.html http://www.econtalk.org/archives/2008/01/munger_on_the_n.htm...

barney54 10y ago

Read Ronald Coase's Nature of the Firm: http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf It isn't really that firms are communist internally, but that firms exist to reduce transactions costs. Such as contracting for every thing every day (i.e. I don't need a new contract every single day at my job).