Subject: Re: owned vs. free market
From: Robert Marlow <bobstopper-AT-australispro.com.au>
Date: 04 Jul 2003 10:55:50 +0800


On Thu, 2003-07-03 at 19:43, Joacim Persson wrote:
> Ha! The guy I mentioned used to work as a mechanic for a firm which built
> really fancy and expensive saw mill machineries. They built one saw mill
> after the other, the next bigger and more advanced than the previous, and
> they all went bankrupt in the same order. But the saw his grandad built is
> still running, and he could make a lot more from it if he wasn't so lazy
> and uninterested in money (a virtue by all means), and most of all if he,
> like everyone else, didn't had the tax office spies to worry about. There
> are lots of other small saw mills in the vicinity.
> 
> The largest saw mill in the area went bankrupt because of the executive's
> defalcation.  Perhaps it is obvious that defalcation cannot occur at all in
> a one man business? You can't swindle yourself, like. It is less likely to
> occur in a small firm than a large organisation, as staff in small firms
> have a better overall view of the enterprise than their collegues in large
> organisations have. The larger corporation must either spend more on
> internal bureaucracy to prevent embezzlement or employee thefts, or live
> with a certain amount of it. In either case, it implies increased costs.
> 
> Effiency in large organisations is at best a political construct, but
> calling it a myth is closer to the truth. Anyone who has had the
> opportunity to watch a large group of disagreeing individuals trying to
> cooperate for some goal knows that the whole is often, not to say usually,
> less than the sum of the parts. Just look at the endless void-minded
> arguments on this mailing list. ;)

It's true that that has some drag on large corporation efficiency. But
it is severely outweighed by the following economies of scale:

* Larger corporations have larger numbers of employees. This means they
can afford to have highly specialised employees who are very good at
doing one particular job and mostly shit at doing anything else and have
them working only at what they're good at. The smaller corporation
cannot do this - its members must all be "jack of all trades" regardless
of how specialised their individual skills are. Hence the labour is less
efficiently allocated.

* The classic example is bulk purchase - many suppliers sell their goods
at lower cost if bought in bulk. Larger corporations are much more
equipped to take advantage of this dynamic.

* Machinery and automation. Larger corporations can generally afford to
purchase machinery which automates tasks previously performed by human
labour. This allows the company to shrug off much of its labour and not
have to pay as high a percentage in wages as a smaller company.

There's others. But these factors DO exist and the fact that they give
larger companies an advantage is obvious from casual observation of
turnovers.


> Without government supporting big business, they rot away. Either implode
> from internal bureaucracy or internal corruption cost, or from not having
> immaterial rights (patents, copyrights, trademarks...) enforced by the
> state. Or they fall over as soon as some unexpected change in the
> environment (market or otherwise) occurs. Tall ships turn slower than small
> boats.  The Swedish government is currently pumping in 1.2 billion SEK in
> ABB btw, fearing it would bankrupt. (So let it fall!) That is tax money
> from small enterprises which will never receive such financial support from
> the state nor get fat contracts with it. Capital concentration begins at
> state interference as taxation and regulation, not from out of the blue.

This is true - they would rot away. So would most small businesses which
would no longer have the law to enforce their labour exploitation. The
scale of the exploiter is irrelevant; it happens everywhere. All that
would be left in the "free market" would be the self employed and the
occassional capitalist who manages to find someone desperate for food
who is willing to sell their labour for the opportunity to eat (not too
likely if anyone is free to join a worker's collective or commune).
Anything bigger than that would have to be groups of people mutually
agreeing to work together - most likely non-hierarchially since that
would be the only way to keep everyone happy (other than the ones who
were used to being in charge of course). Oh yeah - trade between these
non-hierarchial organisations would probably still occur in many
instances and there'd still be free trade between individuals wanting to
swap personal items. 

Personally (many here would disagree with me) - I have no problem with
free trade. It's just when capitalists see someone starving and say
"I'll give you a slice of bread for every 16 hours you work for me" it
becomes very clear that the kind of free trade capitalists talk about is
NOT free in any sense other than the "free" choice between slavery and
starvation.


-- 
Regards,

Robert Marlow