Coase won the Economics Nobel for his analysis of why and how firms organize. The Nature of the Firm[0] is still worth reading. The answer basically boils down

Coase won the Economics Nobel for his analysis of why and how firms organize. The Nature of the Firm[0] is still worth reading. The answer basically boils down to "transaction costs" and how they affect economic activity at different scales. [0] http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf