Comments on Mutualist Blog: Free Market Anti-Capitalism: Economic Calculation in the Corporate Commonwealth...

Thanks for the comments, Carlos. I agree that som...

2007-04-12T18:33:00.000-07:00

Thanks for the comments, Carlos. I agree that some large corporations are internally less pathological than others. Most of the management fads associated with Tom Peters over the years have involved either simulating markets within the corporate hierarchy, or simulating decentralization and worker self-management.

My objection to such an approach is that (as I titled a post here some time ago) it's putting new wine in old bottles. Such experiments take place within a state-enabled corporate framework where the headquarters retains control of finance and "intellectual property" (see, for example, Naomi Klein's description of Nike).

I don't dispute that such experiments make the large corporation more efficient and less pathological than it would be without them.

But I believe the state's subsidies to the costs of large size, and the state's protections from the competitive costs of inefficiency, together enable the corporation to get by with only such half-measures; and it reduces the pressure to adopt them at all.

Gates retains enough ties to the hacker culture that the internal culture of MS goes partway toward simulating the atmosphere of peer-group production. Still, his comments on Stallman et al about copyright "commies" indicate he is very ambivalent toward that culture.

And as is the case with corporate culture in general, Gates has the leeway to play around with half-measures because he's cushioned from full-scale competition by the state.

"The separation of ownership of capital from the k...

2007-04-12T11:52:00.000-07:00

"The separation of ownership of capital from the knowledge of the production process leads to decisions divorced from reality. The same is true of the separation of management from direct involvement in the production process, and the accountability of management to absentee owners rather than to workers. These functions are separated under large-scale corporate capitalism. The manager who knows much about the cost of production inputs, but lacks technical knowledge of the ends to which they are best suited, is ignorant and unqualified to judge "those employments in which they can render the best service." If he attempts "cost cutting measures," he is likely to use poor judgment as to which inputs can most afford to be cut, and reduce expenditures on the most important productive inputs first."

Well said, but not all managers and not al investors have to be like that. Many of the better managers are those who really understand the work. They are like leaders, and not "managers". They are there tu support people, to coach them, not to patronize them. And I remember reading Warren Buffet(arguably the best investor ever) saying he doesn't invest in business that he doesn't understand. And there is a class of investors who tend to hire good managers (who know the stuff) and tend to respect their decision.

Besides, Who is one of the wealthiest companies n the World? Microsoft. And is run by its founder who actually know how to program computers. He currently has a role called "Chief Software Architect". He can be a bad guy, but he really knows his stuff.

Best Regards,
Carlos

Interesting example, scumble. Overproducing stuff...

2007-03-29T23:45:00.000-07:00

Interesting example, scumble. Overproducing stuff based on internally-generated needs and capabilities, and then trying to find ways to get people to buy it, is often called the "supply-push" model of distribution. I think there's clearly some connection with calculation problems, but whether it's chicken or egg I can't say.

I wonder if what's happening in the video game mar...

2007-03-27T01:02:00.000-07:00

I wonder if what's happening in the video game market is a good example of this information problem, or even focusing on Sony. If you consider products like betamax and minidisc, it shows a kind of irrational drive to provide stuff that most people don't actually want.

Perhaps in the calcualtion realm, the insistence on Blu-Ray for the Playstation 3 is a better example of bad management calculation. The costs got so out of hand that the PS3 is still way too expensive even though Sony is taking a hit of several hundred dollars on each console.

So, it's possible that Sony as a company may be a good example of management at some distance from reality - success in the past may have led to a feeling of invincibility, leading to the sinking of huge amounts of capital into less-than-productive areas.

Fixed it--thanks!

2007-03-23T11:24:00.000-07:00

Fixed it--thanks!

Kevin,I think you mean "borne" not "borned" in the...

2007-03-23T05:54:00.000-07:00

Kevin,

I think you mean "borne" not "borned" in the para after you quote Chiz - or am i just ignorant of that usage? (I wouldn't even mention it, but you seem to be likely to publish this stuff).

The last few paragraphs make me think of when I was in pharma. We had project teams for new products, and we were working on a new cream. It was a tremendously technically difficult project, one that we in the lab knew was probably beyond our physical facilities, and definitely beyond the capabilities of our formulators. But the company threw alot of money down that rathole, because it was a virgin market (and a huge one) for generics. At team meetings, the marketing team member would constantly state "just make it!" when we would report the myriad of problems we were having.

To my knowledge, there are still no generics (except the innovator's off brand) for the cream. And I doubt there ever will be. This is one of those cases that make Bailey's "disclosure" argument about patents truly nonsensical. That patent was a joke, but it's been expired for a long time now, and noone else really has any ability to replicate it.