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It needs a certain change of perspective, but big companies are in effect large centrally planned economies that are thriving, many several times the size of a

It needs a certain change of perspective, but big companies are in effect large centrally planned economies that are thriving, many several times the size of a small country.

foobiekr 5y ago
The amount of waste and craziness, inequity, and straight out maliciousness that I've personally witnessed at the upper and upper-middle layers of large companies is reminiscent of most resource-extraction-oriented small countries (banana republics). They are not efficient or pleasant. There's a reason small companies outperform them and are a threat to them and why they focus so hard on regulatory capture to prevent competition.
- phreeza 5y ago
  I'm not saying they are all great places, I'm just saying they are an existence proof for large scale centrally planned economic entities that don't collapse like many centrally planned national economies, suggesting that central planning was maybe not the deciding factor.
  - foobiekr 5y ago
    Based on the changes to the set of large companies over time, they do in fact collapse and generally very few even last 30-40 years let alone hundreds.
    - phreeza 5y ago
      Good point, but some like GE or petroleum companies seem to have lasted quite long already.
- freemint 5y ago
  > The amount of waste and craziness, inequity, and straight out maliciousness that I've personally witnessed at the upper and upper-middle layers of large companies interestingly places that are not controlled by democratic means, i wonder if these places were electable and up for challenge by everyone in the company if those behaviors you associate with non-democratic states would become less.
  - foobiekr 5y ago
    “The dictators handbook” covers this topic in detail.
iammisc 5y ago
and this is why conservatives need to seriously rethink their approach to corporations
narcraft 5y ago
https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm
bhupy 5y ago
The core difference, of course, being that there's an in-built mechanism for meritocratic selection and failure. Big companies that "centrally plan" first of all only get there by establishing merit via product/market fit (unlike dictatorships), and if they fail, they usually go out of business or fade into obscurity (unlike dictatorships). If Sears was anointed the supply chain central planner on account of its one-time dominance, there's no guarantee that they'd "thrive" forever. One might then decide, okay, it's really dictatorships that are bad, let's add democracy on top of the central planning. Except...there's no empirical evidence that democracies organically elect central planners that yield the same kinds of outcomes as the "big companies". In practice, democratically elected planners have been selected more on the basis of their political clout, rather than on the basis of their merit. An example: Tesla is arguably the foremost "central planner" in electric cars today[1]. And yet, the White House recently snubbed Tesla in a summit on the future of electric vehicles[2]. California's state government not only drove Tesla out, they've decided to allocate EV resources towards laggards like Hyundai[3]. The political calculus is obvious: Elon Musk is politically unpopular among the base of voters that anointed the aforementioned democratically elected governments. Nevertheless, it's quite the indictment of democratic planning. Another observation: if the United States decided to centrally plan supply chains in 1997, there's no way they would have selected Jeff Bezos to be the politically appointed commissar[4], despite him (and his company) probably fitting your description of a "big company in effect that's a large centrally planned economy that's thriving". The opposite is happening, where factions of the currently elected government are determined to relieve Amazon of its role as a "central planner", despite (to your admission) its effectiveness. At least with dictatorial planning you might (if you’re lucky) have a competent dictator/bureaucracy that might have some unified plan / vision with the leeway to install politically unpopular but highly competent planners (and therefore no accountability), and you can actually get some stuff done. You see this with China and Singapore, which are both more authoritarian than liberal democracies (especially China), but generally have fast moving development — though even they rely predominately on the private sector / markets for their growth/development. With democratic planning/resource allocation, nothing ever gets done because at best it’s basically design by committee, and at worst it's a popularity contest where the most competent "planners" lose if they're simply unlikable. Also, there's really no big company on the planet that's centrally planning every single price signal in an economy — not even Amazon. They're dominant, yes, but by no means are they the sole producer/distributor/allocator of all goods and services. The largest corporations account for single digit percentage of GDP (if even). This is not true of state-driven central planning, at least historically speaking. The nuanced reality is that, yes, at some layer, we're all central planners. The family unit is usually centrally planned, and so too are corporations. The empirical lesson we've learned (historically) is that once you get to a certain size, there are diminishing returns to effectiveness of central planning, and at worst after a certain point it becomes actively detrimental to the well-being of the economy. [1] https://www.nytimes.com/2020/07/22/business/tesla-electric-car-audi-polestar.html https://www.nytimes.com/2020/07/22/business/tesla-electric-c... [2] https://www.theverge.com/2021/9/28/22699339/elon-musk-joe-biden-criticize-tesla-insult https://www.theverge.com/2021/9/28/22699339/elon-musk-joe-bi... [3] https://twitter.com/DavidSacks/status/1393342790931664899 https://twitter.com/DavidSacks/status/1393342790931664899 [4] https://twitter.com/JimPethokoukis/status/1231245913764638720 https://twitter.com/JimPethokoukis/status/123124591376463872...
simonh 5y ago
Nobody is against planning, the point is different plans should be allowed to compete, as long as people are willing to put a personal stake into their plan that carries consequences. Hence capitalism. Central planning eliminates the personal stakes, the competition and most of the individual consequences for the planners. In practice a hybrid approach often has advantages, particularly for very large scale projects which are meeting a vital need and where direct competition would be wasteful but you can still have contractors bid for the work. Major infrastructure such as bridges, airports, power generation. Bureaucratic central planning (government) can play a role in that, but government should have it's own competitive forces and accountability in the form of democratic elections. Many like yourself do see waste in this system and you are right, in any competition, either economic or political there are losers as well as winners and sometimes outcomes can be somewhat arbitrary. Whatever system we use we must deal with corruption and exploitation. While a confirmed capitalist, I strongly support basic social welfare and services in the European model. This system has proved in practice again and again to be far, far superior to all the alternatives, or the least worst among them anyway.

It needs a certain change of perspective, but big companies are in effect large centrally planned economies that are thriving, many several times the size of a small country.

foobiekr 5y ago

The amount of waste and craziness, inequity, and straight out maliciousness that I've personally witnessed at the upper and upper-middle layers of large companies is reminiscent of most resource-extraction-oriented small countries (banana republics). They are not efficient or pleasant. There's a reason small companies outperform them and are a threat to them and why they focus so hard on regulatory capture to prevent competition.

phreeza 5y ago
I'm not saying they are all great places, I'm just saying they are an existence proof for large scale centrally planned economic entities that don't collapse like many centrally planned national economies, suggesting that central planning was maybe not the deciding factor.
- foobiekr 5y ago
  Based on the changes to the set of large companies over time, they do in fact collapse and generally very few even last 30-40 years let alone hundreds.
  - phreeza 5y ago
    Good point, but some like GE or petroleum companies seem to have lasted quite long already.
freemint 5y ago
> The amount of waste and craziness, inequity, and straight out maliciousness that I've personally witnessed at the upper and upper-middle layers of large companies interestingly places that are not controlled by democratic means, i wonder if these places were electable and up for challenge by everyone in the company if those behaviors you associate with non-democratic states would become less.
- foobiekr 5y ago
  “The dictators handbook” covers this topic in detail.

iammisc 5y ago

and this is why conservatives need to seriously rethink their approach to corporations

narcraft 5y ago

https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm

bhupy 5y ago

The core difference, of course, being that there's an in-built mechanism for meritocratic selection and failure. Big companies that "centrally plan" first of all only get there by establishing merit via product/market fit (unlike dictatorships), and if they fail, they usually go out of business or fade into obscurity (unlike dictatorships). If Sears was anointed the supply chain central planner on account of its one-time dominance, there's no guarantee that they'd "thrive" forever. One might then decide, okay, it's really dictatorships that are bad, let's add democracy on top of the central planning. Except...there's no empirical evidence that democracies organically elect central planners that yield the same kinds of outcomes as the "big companies". In practice, democratically elected planners have been selected more on the basis of their political clout, rather than on the basis of their merit. An example: Tesla is arguably the foremost "central planner" in electric cars today[1]. And yet, the White House recently snubbed Tesla in a summit on the future of electric vehicles[2]. California's state government not only drove Tesla out, they've decided to allocate EV resources towards laggards like Hyundai[3]. The political calculus is obvious: Elon Musk is politically unpopular among the base of voters that anointed the aforementioned democratically elected governments. Nevertheless, it's quite the indictment of democratic planning. Another observation: if the United States decided to centrally plan supply chains in 1997, there's no way they would have selected Jeff Bezos to be the politically appointed commissar[4], despite him (and his company) probably fitting your description of a "big company in effect that's a large centrally planned economy that's thriving". The opposite is happening, where factions of the currently elected government are determined to relieve Amazon of its role as a "central planner", despite (to your admission) its effectiveness. At least with dictatorial planning you might (if you’re lucky) have a competent dictator/bureaucracy that might have some unified plan / vision with the leeway to install politically unpopular but highly competent planners (and therefore no accountability), and you can actually get some stuff done. You see this with China and Singapore, which are both more authoritarian than liberal democracies (especially China), but generally have fast moving development — though even they rely predominately on the private sector / markets for their growth/development. With democratic planning/resource allocation, nothing ever gets done because at best it’s basically design by committee, and at worst it's a popularity contest where the most competent "planners" lose if they're simply unlikable. Also, there's really no big company on the planet that's centrally planning every single price signal in an economy — not even Amazon. They're dominant, yes, but by no means are they the sole producer/distributor/allocator of all goods and services. The largest corporations account for single digit percentage of GDP (if even). This is not true of state-driven central planning, at least historically speaking. The nuanced reality is that, yes, at some layer, we're all central planners. The family unit is usually centrally planned, and so too are corporations. The empirical lesson we've learned (historically) is that once you get to a certain size, there are diminishing returns to effectiveness of central planning, and at worst after a certain point it becomes actively detrimental to the well-being of the economy. [1] https://www.nytimes.com/2020/07/22/business/tesla-electric-car-audi-polestar.html https://www.nytimes.com/2020/07/22/business/tesla-electric-c... [2] https://www.theverge.com/2021/9/28/22699339/elon-musk-joe-biden-criticize-tesla-insult https://www.theverge.com/2021/9/28/22699339/elon-musk-joe-bi... [3] https://twitter.com/DavidSacks/status/1393342790931664899 https://twitter.com/DavidSacks/status/1393342790931664899 [4] https://twitter.com/JimPethokoukis/status/1231245913764638720 https://twitter.com/JimPethokoukis/status/123124591376463872...

simonh 5y ago

Nobody is against planning, the point is different plans should be allowed to compete, as long as people are willing to put a personal stake into their plan that carries consequences. Hence capitalism. Central planning eliminates the personal stakes, the competition and most of the individual consequences for the planners. In practice a hybrid approach often has advantages, particularly for very large scale projects which are meeting a vital need and where direct competition would be wasteful but you can still have contractors bid for the work. Major infrastructure such as bridges, airports, power generation. Bureaucratic central planning (government) can play a role in that, but government should have it's own competitive forces and accountability in the form of democratic elections. Many like yourself do see waste in this system and you are right, in any competition, either economic or political there are losers as well as winners and sometimes outcomes can be somewhat arbitrary. Whatever system we use we must deal with corruption and exploitation. While a confirmed capitalist, I strongly support basic social welfare and services in the European model. This system has proved in practice again and again to be far, far superior to all the alternatives, or the least worst among them anyway.