Hacker News Reader

Comment by DomreiRoam | Hacker News Reader

You can make the point that even in a market economy, the internal economy of a company is communist: it is centrally controlled/planned and not market base. Outside, big companies can distort the market because of they weight and there ability to use international difference (price transfer, little effective tax paid, lobbying).

So I think, if you believe in the invisible hand and that a fair market is good for everybody, I think we should have smaller companies. But it's not only for tech companies. We have facilitate fusion/acquisition a little too much and we see less competition and even some time cartel.

View on HN

The failure mode of a big company is the same as that of a communist country, too: elite disconnect with real conditions, then stagnation, then bankruptcy, then horrible effects for the places that were dependent on it. Look at Seattle in the '80s, Moscow in the '90s, or Rochester, NY after Kodak fell.

The German model, where the employees' union is guaranteed a seat on the board of directors, is probably a healthier way of structuring a BigCo; often the workers can see which way the wind is blowing when the executives can't. _Were You Born on the Wrong Continent?_ is the book to read here.

J. Bradford DeLong had a piece on the potential for corporations to resemble command economies many years ago; it would be interesting to see a more recent perspective on the topic http://web.archive.org/web/20090430185843/http://j-bradford-...

Thanks for the link!

This passage stuck out at me:

"But we were all told a decade ago, when the Soviet Union collapsed, that hierarchical organizations simply did not work as modes of organizing economic life--that you needed a market in order to achieve anything better than low-productivity, bureaucracy-ridden economic stagnation.

What, then, are all these large corporations--ATT and IBM, General Motors and Toyota, Microsoft and USX--doing? What methods of corporate control have saved them from turning into smaller versions of the unproductive Soviet economy?"

Given some of the tales of corporate excesses that I have heard, I would answer... absolutely nothing.

Thankfully we are still far enough away from the situation where a few megacorporations dominate our everyday lives (as worrying as the recent trends are) that society at large is shielded from this.

Bureaucratic state-socialists used to brag that the growth of large trusts and joint-stock corporations was capitalism building the infrastructure for socialism.

I agree with them in the respect they meant it, but nowadays we know that's kind of a bad thing: building up a massive bureaucratic apparatus is a bad thing.

Well, the internal structure of a company is almost always autocratic, but not every dictatorship is a communist one, and very few companies are even nominally communist.

Internally almost all are. While there might be some internal rivalry between groups in a company, they generally don't have an internal market for goods and services but simply work together for a common goal -- that's communism in a nutshell.

That's... not communism in a nutshell, though. That's just autocracy, it describes fascism equally well. I don't know many companies that even claim to distribute income to employees based on need.

That's not what the communism analogy is referring to. The point is within a company there aren't generally entities that compete among themselves in a market economy for resources. Instead, there is a command economy with the CEO and other high executives making decisions as to the allocation of resources much as how resources were allocated in the Soviet Union. In fascism there were numerous corporations that competed with each other as in any capitalist system with the exception that the dictator could have the CEOs imprisoned or killed if they didn't like them, of course.

Reply on news.ycombinator.com