I’ve Got Mine Now Sod Off Says Zuckerberg
– Tim Worstall providing a typically succinct summation.
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Samizdata quote of the daySamizdata Illuminatus (Arkham, Massachusetts) · Internet · Privacy & Panopticon · Slogans & Quotations February 21st, 2020 |
 7 comments to Samizdata quote of the day |
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Also quote-worthy is his own article that he links to. My favorite:
So, much as I dislike Zuckerberg, as a free marketer I do need to point out that he is here doing what is best for his shareholders — erecting a competitive wall. The problem is not Zuckerberg wielding the weapon, but that the weapon is available for sale.
It reminds me of Amazon which has become in favor of sales tax on interstate orders. Why? After all they build much of their business on the fact that their stuff was tax free. Well because with their build out of physical locations they now have physical presence in many states and so must collect the tax anyway, so they don’t want their competitors to take advantage of the thing that made them a behemoth.
Again, I’m not saying Bezos is a bad guy, he is doing what his fiduciary duty demands. The problem is government who nakedly sell favors not the private businesses that twist themselves into pretzels to advantage themselves with legislation.
In a sense, it is also obviously to the advantage of government to have large companies. They are easier to manage than that herd of cats that is “extensive small businesses”.
Something I have been thinking about is this: traditionally what has happened is that a business grows from small to large and in doing so it gradually switches it competitive advantage from nibble/innovative to economy-of-scale/lobbyist-acquiring. The problem with economy of scale is that it advantages in manufacturing with high cost capital goods, but there is a strong disadvantage in scale, specifically communication and transaction costs within a business tend to be quadratic on the business size, and scale distances individual responsibility from real world consequences. (To put it another way, the more you have to go up and down the management chain the more expensive it is to make a decision, and the more workers are isolated from customer consequences the more dangerous is the building of misaligned incentives such as empire building, and the more hands involved in collecting and processing information the more it is tainted to the advantage of those who handle the information.)
However, that disincentive of scale seems to be happening a lot less in today’s mega corps. And I wonder how much this is to do with AI, data driven decisions and deep analytical tools the can eliminate the toxic middle managers. I don’t know, but I’d speculate there is something there.
Quite so:
“It reminds me of Amazon which has become in favor of sales tax on interstate orders.”
Something I pointed out in Forbes back in 2013 and subsequently…..
I was browsing an aircraft board once, and somebody with a good deal of history in the field said Boeing started out with everybody in the same building, so that the executives and engineers and workers were all in contact with each other and with the work going on. But this started going to hell when they got a separate, distant, building for the executives and bean-counters. And these days, the executives only think they know what’s happening in the production spaces. Nor are they willing to be told differently.
It’s the internet – how do I know it’s true? It sure sounds probable. All companies are in trouble when they get to a point where management will not see unless they want to.
Ellen:
Brian Micklethwait of these parts referred to it as Parkinson’s Other Law.
On the point of Sales Tax – in a better world (say the 1920s – when American government, Federal, State and local, did little) then there would be no Sales Tax – but now most States have Sales Tax (even Texas got one in 1961 – and it has gone up and up since then), and it is clearly unjust for local shops to pay sales tax and for out of State mail order business enterprises not to.
Either both should pay – or neither should pay.
As for the leftism of Big Corporations being a cover for their commercial interests – sometimes YES, but mostly NO.
Normally the support for more taxes, government spending and regulations is NOT in the commercial interests of the Big Corporations and individual leftist billionaires (of whom there are LEGION) it is normally leftism.
The “Capitalist” elite in the United States are working to destroy “Capitalism” – because they are educated with assumptions of ever bigger government.
The situation really is that bad.
Ted Schuerzinger
Brian Micklethwait of these parts referred to it as Parkinson’s Other Law.
Except that the value of both the companies mentioned, Apple and Amazon has approximately tripled in the time since that 2013 post, despite their fancy new headquarters.
Which brings me back to my original point, the natural deterrent against really large companies (dis-economies of scale, such as the exponential growth of everything due to the massive communication chains) seems to be breaking down, and I think a lot of that is to do with AI and deep data mining where decisions can be made much more straightforwardly based on data, which doesn’t have its own agenda, rather than depending on an army of middle managers with all the concomitant political agendas that come with such creatures.
Which is both magical and terrifying at the same time.