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Preferential tax treatment for in-firm transactions, regulatory capture, and economies of scale, and subsidies from small profitable corners.

• jjoonathan 12y ago
  > economies of scale So what you're saying is that it's actually more efficient? > subsidies from small profitable corners The inefficient parts subsidize already efficient parts making both parts more efficient in the process.
  • enraged_camel 12y ago
    >>So what you're saying is that it's actually more efficient? No. Simply put, there are different types of efficiency. The term "economies of scale" refers to spreading the fixed costs of production among a greater number of units of output. They are about production efficiency, and to a lesser extent, operational efficiency. What we are talking about here is efficiency when it comes to the allocation of resources across different business units. Central planning is very inefficient in this regard. >>The inefficient parts subsidize already efficient parts making both parts more efficient in the process. No one is arguing that this is not the case. What might be true, however, is that we may not need some of those inefficiencies in the first place. Our current and most popular model of corporation involves central planners. This doesn't necessarily mean that we won't find a more efficient model of corporate management.