It's a really deep problem. Representative democracy, for all its faults, beats autocracy thanks to the improved incentives of leaders. Businesses as a whole, i

It's a really deep problem. Representative democracy, for all its faults, beats autocracy thanks to the improved incentives of leaders. Businesses as a whole, if they have to compete with others, face good incentives. But within a firm the incentives can be really screwy. One obvious response would be to abolish the firm and make everyone an independent contractor, buying and selling stuff from each other. That would improve accountability but at the cost of an enormous friction replacing a process that used to be as easy as asking someone to do something. Ronald Coase dedicated much of his career to the question of how to balance those forces, how far the boundaries of firms should extend.