Organization Theory Outline: Expanded Version
Chapter Outline
Part One: State Capitalist Intervention in the Market
Chapter One: A Critical Survey of Orthodox Views on Economy of Scale
Appendix 1A. Economy of Scale in Development Economics
Chapter Two: A Survey of Empirical Literature on Economy of Scale
A. Economies of Firm Size
B. Economies of Plant Size
C. The Comparative Significance of Scale Economies and Organizational Efficiency
D. Increased Distribution Costs
E. The Link Between Size and Innovation
F. Economy of Scale in Agriculture
Conclusion
Chapter Three: State Policies Promoting Centralization and Large Organizational Size
I. The Corporate Transformation of Capitalism in the Nineteenth Century
A. The Nineteenth Century Corporate Legal Revolution
B. Subsidies to Transportation and Communication Infrastructure
C. Patents and Copyrights
D. Tariffs
II. Twentieth Century State Capitalism
A. Cartelizing Regulations
B. Tax Policy
C. The Corporate Liberal Pact with Labor
D. The Socialization of Corporate Cost
E. State Action to Absorb Surplus Output
F. Neoliberal Foreign Policy
Part Two: Systemic Effects of Centralization and Excessive Organizational Size
Chapter Four: Systemic Effects of State-Induced Economic Centralization and Large Organizational Size
A. Radical Monopoly and Its Effects on the Individual
B. Systemic Effects on Institutional Culture
C. The Large Organization and Conscript Clienteles
D. The New Middle Class and the Professional-Managerial Revolution
Postscript: Crisis Tendencies
Appendix 4A. Journalism as Stenography
Part Three: Internal Effects of Organizational Size Above That Required for Optimum Efficiency
Chapter Five: Knowledge and Information Problems in the Large Organization
A. The Volume of Data
B. The Distortion of Information Flow by Power
Conclusion and Segue
Appendix 5A. Toilet Paper as Paradigm
Chapter Six: Agency and Incentive Problems in the Large Organization
Summary
Chapter Seven: Economic Calculation in the Corporate Commonwealth (the corporation as planned economy)
A. The Divorce of Entrepreneurial from Technical Knowledge
B. Mises vs. Hayek on Distributed Knowledge
C. Rothbard's Application of Mises' Calculation Argument to the Private Sector
Conclusion
Chapter Eight: Managerialism, Irrationality and Authoritarianism in the Large Organization
A. The Corporate Form and Managerialism
B. Self-Serving Policies for "Cost-Cutting," "Quality" and "Efficiency"
C. The Authoritarian Workplace: Increased Hierarchy and Surveillance
D. Authoritarianism: Contract Feudalism
E. Authoritarianism: The Hegemony of "Professionalism"
F. Motivational Propaganda as a Substitute for Real Incentives
Appendix 8A. Blaming Workers for the Results of Mismanagement
Chapter Nine: Special Agency Problems of Labor (internal crisis tendencies of the large organization)
Introduction
A. The Special Agency Problems of Labor
B. Labor Struggle as Asymmetric Warfare
C. The Growing Importance of Human Capital: Peer Production vs. the Corporate Gatekeepers
D. Austrian Criticism of the Usefulness of Unions
Conclusion
Appendix 9A. Sabotage in a London Nightclub: A Case Study
Appendix 9B. Yochai Benkler on Open-Mouth Sabotage: Diebold and Sinclair Media as Case Studies in Media Swarming
Chapter Ten: Attempts at Reform from Within (Management Fads)
A. New Wine in Old Bottles
B. Lip Service and Business as Usual
C. Management by Stress
D. Dumbing Down
Conclusion
Appendix 10A. The Military Origins of Quality Control
Part Four: Conjectures on Decentralist Free Market Alternatives
Chapter Eleven: The Abolition of Privilege
A. Reciprocity
B. Privilege and Inequality
C. Specific Forms of Privilege, and the Effect of Their Abolition
Appendix 11A. Reciprocity and Thick Libertarianism
Chapter Twelve: The Cost Principle
Chapter Thirteen: Dissolution of the State
Chapter Fourteen: Decentralized Production Technology
Introduction: Basic Goals and Values
A. Multiple Purpose Production Technology
B. Polytechnic
C. Mumford's Periodization of Technological History: Eotechnic, Paleotechnic, and Neotechnic
D. Decentralized Agriculture
Chapter Fifteen: Social Organization of Production (cooperatives and peer production)
Chapter Sixteen: Social Organization of Distribution and Exchange
Chapter Seventeen: Mutual Aid
Bibliography
posted by Kevin Carson | 11:12 AM
21 Comments:
That photo is too awesome! LOL!!!
For what its worth, the problem with the free market is that it is cover for injustice and an empty concept.
As a cover, there is this conception that efficiency considerations can be separated from distributive justice ones. That it speaks only to the size of the pie not how it is sliced. By efficiency I mean goods and services go to whomever values them most; by distributive justice I mean who gets what. In so doing it attempts to present itself as non-ideological, apolitical, neutral.
Voluntary exchanges purportedly move goods and services to a higher state of utility, i.e to those whom value them most. For the parties would not trade if they did not consider the exchange mutually beneficial. This fails to take into account ambivalence and regret. Moreover, the background conditions of the exchange dictate the option set. If one is faced with the choice of death or physical injury or handing over money to a mugger, the rational choice is to hand over the money--a higher state of utility is obtained (for the victim values his life more than his money). We must introduce political or moral considerations to entertain the view that this is not a legitimate exchange. The same holds not only for extreme cases but also every exchange: we must defend the background conditions for the exchange on political grounds. As you have noted "primitive accumulation" whole dispossession of people and land has created background conditions in which trades are arguably illegitimate, I agree, however, I think that any background condition must be defended such as a natural rights theory or utilitarian theory. In other words, we are talking about who gets what and why, and this is controversial and political. We talk all day about what is efficient but it is rather besides the point until we have effectively defended on political grounds the background conditions either actual or ideal in which exchanges are or should be made.
Here I should say for the most part, I don't buy "moral" arguments. I don't buy universalistic arguments about human nature abstracted from history/struggle. And I even apart from this "Marxist" perspective, moral "universalistic" foundations are shaky ground, philosophically.
For whatever its worth.
Wow! This looks like it's shaping up to a doozy of a book.
Keep it up, Kevin.
This looks great! I can't wait to get my hands on this one. When do you think you'll have it ready?
Thanks Bob, Natasha and Per. I hope to have it finished late this year or early next. I'm dividing my time on it pretty much evenly between revising and expanding older material (e.g. the latest version of Ch. 4), and adding new chapters. The next one posted should be Ch. 13, on dissolution of the state.
Anon,
In fact I would argue (and did in Ch. 11) that injustice in distribution has inefficiency costs that reduce the size of the pie. The state's intervention in the market simultaneously reduces returns on effort, and increased returns on privilege, so as to degrade the actual incentives to productivity that would exist in a free market. In addition, the perverse incentives that accompany artificial property rights in the means of production mean that they are held out of use because they don't produce suffient returns to feed the useless eaters in addition to those actually working them.
I believe that exchanges in a genuine free market produce net utility, and are the best way to maximize utility even with problems of ambiguity and regret that you mention. But background constraints on options are one of the ways that the present system deviates from a free market. IMO it cannot be considered a genuine free market until structural questions of privilege and justice in holdings are addressed.
You have not defended the background conditions of your ideal market. Needless to say, if one man owned everything and everyone else had nothing the king wanted, this situation would be efficient. (Efficient, but productivity would suffer.) Utility could not be maximized further.
Can't wait for this book to appear, Kevin! As for Anonymous, I don't think he/she realizes where you are coming from, or that a free market-anti-capitalist analysis of capitalism can be a very powerful weapon against capitalism for non market anarchists and socialists, as well. For it totally rips away the ideological mask of capitalism, exposing its "free markets" and "free enterprize" as lying propaganda to cover its statist, authoritarian centralist, genocidal crimes. Socialists who speak of "free market capitalism" are actually accepting the systems propaganda and thus do not really understand the system they claim to be critiquing. In fighting the "free market" or "free trade" they are fighting a Stirnerite spook, for all capitalism is in the last instance STATE capitalism, or as I like to put it, "Capitalism is the state socialism of the rich."
Thanks, Larry. And thanks for your explanation to Anon.
I agree that the critique--that it just assumes a free price system while taking initital distribution of factors for granted, and ignores questions of justice in acquisition--applies to much of mainstream libertarianism. But I don't know how it applies to anything I've written, because that critique has been a central focus of my own work.
Kevin,
I agree that you have focused on the questions of the justice in acquisition. Perhaps I haven't read enough of your writing but I think that even apart from "force and fraud" in acquisition, it is important to emphasize that the initial distribution of production factors must be rigorously defended. It is easy to forget that natural rights or even utilitarianism or something like it MUST justify the market in the final analysis. These are hardly uncontroversial theories. Insofar as discussion of "wealth maximization" or "efficiency" papers over this controversial question of first principles, the market functions as ideological cover.
Even if we accept your suggestion that the market system is albeit imperfect but better than any alternative system. Why can't we do equity. So, suppose, someone makes a trade that leaves them worse off, due to some irrationality, why must we let the chooser suffer. but as I see it, market fundamentalists take a very rigid rule-bounded approach to these matters.
Fame (at the Lew Rockwell blog).
Thanks for the heads-up, PML. I don't think the early history of the term "capitalism" was quite as cut and dried as my namesake makes it out. For example, Marx distinguished "capitalism" from "simple commodity production" based on whether capital was accumulated in absentee hands and work was organized on a wage basis. And to the extent that "capitalism" has been used in reference to the system that has predominated in this era since early modern times (and even Rothbardians minimize the corporatist aspects before ca. 1900 and call it largely laissez-faire), it's useful to distinguish capitalism as a historical system from the free market as such. I didn't exactly coin the term. Oppenheimer viewed capitalism as a fusion of the Old Regime with the market. Wallerstein argues that a segment of the landed ruling class under the Old Regime managed the transition to capitalism, and transformed itself into an agrarian capitalist ruling class under the new system.
But I don't see any need to quibble with those who prefer "capitalism" as a term for private property and the free market.
Some off-topic links I didn't know where else to post. As of late, it almost seems like Alex Tabarrok is intentionally making posts to provoke you. Here he touts big agro-businesses and dismisses the small farmer. Here he dismisses libertarian objections to the limited liability corporation.
Kevin, am really looking forward to this book.
Just wondering, do you agree or disagree with the Austrian theory of the business cycle? If so, what's your alternative theory?
KC, I've followed up some of your and others' comments at those Tabarrok posts.
TGGP: Thanks for the links. I posted over there myself.
rj: I don't consider Austrian business cycle theory to be exhaustive or sufficient, but I appreciate many of its insights. Marxist theories of overaccumulation/overproduction, and Keynesian theories of maldistribution of purchasing power, also shed light on parts of the truth when it comes to what the government's doing under state capitalism.
PML: As I said in the comments at Tabarrok's blog, you're correct to say I tend to view things through an individualist homesteading lens. But I recognize the legitimacy of collective homesteading and communal property rights, as well. The argument works just as well if it's made in terms of the state's abrogating traditional collective tenure by village communes, etc. For example, I believe the Chinese government is preempting villages' customary property rights in some common land in order to create industrial parks.
But KC, as I mentioned on the Tabarrok thread, the argument does not work very well when you try to apply it to those groups of poor people who were not deprived of their own resources, who never had them. That's because finding resources for them can work out as depriving yet others of their resources. I gave the example of former slaves in Madagascar, whose descendants are now migrant harvest workers. Or, you can consider the natives in Guyana; they did lose their resources - to freed slaves. The only way to give them back their resources would involve dumping the descendants of the slaves out.
Sometimes, there is no right answer, usually because the actual gainers are long gone and you can't get restitution out of them (this is pretty much the ethical argument against Georgism, that it charges the people who already paid out the land profiteers, not the land profiteers themselves - unless the latter hung around as landlords, which these days they don't).
Kevin,
I don't know if the musings of a very inelegant "Marxist" is welcome here. I'm probably not a real marxist but I enjoy the rise i get from it. But I am extremely skeptical of "classical and modern liberalism", but maybe you are too. Well, anyway, here goes. I used to think there was a significant disconnect between young Marx and old. And I used to think the young Marx was brilliant about alienation, and I then I thought he was utopian and naive, and then later I thought he was all soft and touchy-feely, and then how could I be so elistist to disparage McD's or assembly-line work as empty and soul-destroying. I mean people choose this work? right? Nozick made this point. Some people are fit for Walmart work, certainly not you or me, but some people are... and we can't be so elistist to disparage what people choose for themselves, can we? Well, I've since realized that most of these attitudes are extremely ideological. Alienation may be touchy-feely but so what? Why do we privilege macho materialist productivist attitudes? It is just privileged without debate especially by most libertarians, i've encountered extremely few female libertarians ... And as far as anti-"elitist" argument that is about the most disingenuous crap I've ever heard. Well, that's a tangent. Because I think that the Old Marx and the young are one, and the argument fits well together. Basically, Marx is important insofar as a continuing thread in his work is this oddly ancient moralistic concern with "The Good"? and what exactly does it mean to be a human being, in a universalistic sense? (Yes, I'm the same Anon, and I am wary of universalism as ideological cover...) As Eagleton has written he is our Aristotle. So Marx's species being is about human being's essence as creative and social being, in tension with the material environment... and this fits in with capital--as a corruption of this human nature.
I mean here's the rub, real work--the work that must get done--is significant only insofar as it is harnessed to this market-thing. Real work has no real purpose (no objective purpose)--its purposes are mediated through the market, and that form certainly reflects real (objective) needs but also very odd imperatives as well. Indisputably, human effort is spent on seemingly pointless projects... conspicuous consumption, and other projects of question social worth--that one might feel could be better spent on projects that more directly sustain and promote human life--physically and spiritually. It is extremely mysterious, too, to the average blue-collar person, (I'd imagine, I'm not blue collar); it is a mysterious force that rules over them. So it is regarded with a certain reverence as sacred, violent and terrible. Fetishism? is that what Marx was driving at? The blue collar guy or dollar a day farmer is vulnerable to among other things the whims and desires of investors and the rich and government officials. Marx certainly did seem to emphasize--insofar as I recall and understood--how capital meets human needs in this very round about, indirect, (anarchic?) way. I strongly sense the counterargument that human need, however intuitively appealing, is an incoherent concept, in an objective sense, anyway.
Now the question of objective human need is bound up with some concept of "The Good" or what it means to be a human being. Value-skepticism dismisses any such discussion. Instead of "The Good" we have the market. Or i suppose we could talk about some kind of consensus reality or truth, a "consensus-forcing truth" (Rorty). In such a morally dead place as this United States preferences for terrorism are equal to preferences for fried chicken or veal, and that comparison is intentionally made.
Forgive my inelegance... I hope I've been somewhat coherent.
with the rumors you noted of workers being worked to death to save on pension costs, you should research the concept of Corporate Owned Life Insurance (COLI).
Wal*Mart as well as other companies use COLIs to offset pension expenses, and they get around the insurable interest requirement by offering employees a token insurance policy that allows employers to get all that juicy data they need for their own policies.
Employers can keep COLIs active long after an employee has quit (wonder why they still need your latest address, even though there's not a chance in hell they'll have their company in the same formulation to give you pension benefits, by the time you're retirement age? Now you know why), and they can keep the lion's portion of the benefit for themselves. In most cases, they don't even tell employees about COLI's existence, which means they can screw workers out of wages, health insurance, disability benefits, death benefits for survivors, yet make a handsome profit once an employee dies of exhaustion. And I betcha there are no exclusions for employer negligence as contributing to the cause of death, either.
COLIs used to be solely "key man" policies, used when a CEO or other essential employee died, in order to pay for the costs of corporate transition. Now they're used for any type of employee, for nearly any purpose. COLIs, like their namesake germ, are a nasty business, when out of control. And, to be blunt, they've never been in control as soon as HR departments learned how to use them for the company good.
and, as part of our normalization of the hardscrabble workplace:
http://www.quintcareers.com/portfolio_careers.html
PML,
I think there's still a wide range of cases where at least no legitimate interests would be harmed by a radical Lockean (or Tuckerite) sifting of existing land titles, and some would be better off. Even in cases where tenant laborers' ancestors have been tenant laborers time out of mind, you're probably dealing in mahy cases with a "turtles all the way down" scenario in which the land *should* have been theres from the beginning. And if land is taken from latifundistas, or from speculator recipients of state land grants, out of surplus wealth far beyond their material need, and given to the landless, it's a close enough approximation to justice. IMO this would not have the drawbacks of Georgism, which does hurt those of modest means (but could be ameliorated with a large enough homestead exemption).
Anon May 9,
You make some good points. The market under the existing capitalist system does become an end or imperative in its own right. But IMO that's not inherent in the market as such. The market, in the sense of a society based on self-ownership and ownership of one's labor product, and voluntary gift and exchange, is a means to an end: individual subsistence. The free individual works in order to consume use-value. As a subsistence producer in a household economy, he directly produces his own use-value. When he begins to engage in exchange, his exchange is just an extension of the same principle: exchanging his labor-time with an equal producer. It's only when large-scale absentee ownership and privilege enter the picture, with the imperative of accumulation becoming an end in itself, that the problem you describe comes about. But I don't think that's the natural outcome of a market.
Re Marx, IMO the main difference between the early and mature thinker was the early Marx was primarily a left-Hegelian, and the later Marx was a more-or-less equal mixture of Hegel and English political economy.
"Philosophy can only be realized by the abolition of the proletariat, and the proletariat can only by abolished by the realization of philosophy."
The aim of class struggle is not only the destruction of the ruling class but more importantly, the working class, class as such. May '68 was interesting because I think the world came close to achieving this worthy goal. Debord talked of the proletarianization of society by and through the spectacle (a more advanced stage of capital accumulation). The traditional alienation of the working class from their life became the general condition of all of society. The struggle between classes had transformed into a struggle of the working class against itself: the struggle against value, that abstract, reified thing, that rules over people's lives--that corrupts & pits humanity against itself. Debord spoke of the capitalist class as the class of the emerging economy, the working class as the class of the emerging consciousness.
In May 1968 students and workers pulled a grand piano out into the street and they waltzed.
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