Broad Oak: your emotional support animal

Thursday, November 25, 2010

Using our brains

It is common wisdom that the Soviet Union and associated states collapsed because of the failures of centralized planning. Then why do we allow and encourage the same kinds of structures in large corporations and government in the West?

The ostensible reason given is easy to defend: large entities can be much more efficient. As a secondary reason (not usually stated), large entities also mean a concentration of power and wealth.

The problem with efficiency is that it comes at a price. This is not only the loss of jobs and transfer of wealth, but more disturbingly the catastrophic nature of any breakdown. We saw it in 2003 with the power grid in the US, in 2008 with the collapse of the banking system, and in new cars, which are much more reliable and efficient than those from the 1970’s, but harder and more expensive to repair.

The key to preventing or mitigating future disasters in finance, oil, energy and water appears to be the opposite of our past practices. Rather than make everything bigger, we should take a hint from the designers of the World Wide Web, and decentralize as much as possible. This will take planning and cooperation, and a thought process unlike anything since World War II. Just consider: how many large purchases for homes, business or government consider the long-term costs of maintenance?

1 comment:

Nick Drew said...

why do we allow and encourage the same kinds of structures in large corporations and government in the West?

you are right of course: many a corp is entirely totalitarian in its outlook and (internal) behaviours

(I have worked for a couple of US co's that fit this description well)

the answer as regards co's is easy: let 'em adopt any model they like. It's not a winning model, by the way: they frequently get stuffed by more flexible competitors. So let Darwin sort 'em out

but governments ... that's more troubling

and even more troubling - the average voter doesn't really care (or even notice)