A Heads-Up on My New Project
I recently started digging into a new research project, loosely built around questions of anarchist organizational theory. I've been exploring the tie-ins between orthodox theories of transaction costs and diseconomies of scale, and the work of anarchist thinkers like Ivan Illich, Paul Goodman, and R.A. Wilson on the irrationality of large-scale organization. Wilson's comments on information flow within hierarchies, and the following remark by Kenneth Boulding, are also relevant.
There is a great deal of evidence that almost all organizational structures tend to produce false images in the decision-maker, and that the larger and more authoritarian the organization, the better the chance that its top decision-makers will be operating in purely imaginary worlds.
So is Goodman's commentary on the failure to internalize the good and bad effects of individual actions within an organization, the separation of intrinsic motivation from work, and the consequent increasing reliance on extrinsic motivators like authoritarian surveillance and control mechanisms.
The organizing theme, as I understand it so far, is that the state subsidizes the diseconomies of large scale, and thus encourages the growth of business firms far beyond the size that could possibly survive in a free market. As a result, society becomes dominated by institutions with pathological organizational cultures (brilliantly captured by Wilson with his title "Empire of the Rising Scum"), and bureaucratic irrationality becomes the norm in every sector. Government subsidies to inefficiency cost also create large-scale negative externalities, which relates closely to Illich's ideas on "counterproductivity" and the "second threshold."
The project will probably, before it's over, involve a course of reading in industrial engineering, public administration, and sociology comparable in scope to the study of economic theory I had to do for Mutualist Political Economy.
I recently stumbled across several interesting leads. One of them is The Theory of Incentives: The Principal-Agent Model, by Jean-Jacques Laffont, which has an excellent literature review on the history of this problem. Another is Oliver Williamson's body of work on diseconomy of scale and internal transaction costs. Finally, in rereading Kirkpatrick Sale's Human Scale, I noticed this brilliant quote from Hazel Henderson's Creating Alternative Futures:
when complexity and interdependence have reached such unmanageable proportions... the system generates transaction costs faster than it does production...."
Now that I've thoroughly jinxed myself, I welcome any suggestions or feedback.