How are you going to use your newfangled industrial organization systems when your workforce hasn’t mentally incorporated many of the social norms needed for an industrialized society?
When I said “company,” I was also including the employees, as potentially more valuable than the physical plant. Including the supply chain also is probably unfair, but I expect they could get pretty far with converting on-hand present-day cash to supplies before being teleported back in time.
Transporting a modern steel mill a hundred years into the past would easily an order of magnitude more difficult than this, and I can see the difficulties therein easily wiping out the potential efficiency gains.
This seems possible to me; even if they have to abandon lots of tools as unsupported by their new supply chain, I imagine them getting a lot out of a hundred years of scientific development.
I was also including the employees of the company itself, and all the machinery and equipment that the company has on hand. However, today, we live in a world of just-in-time supply chains, with companies subcontracting various specialized functions out to various subcontractors. Very few companies are the sort of vertically integrated enterprises that Ford or US Steel were at the turn of the century. As a result, a lot of the knowledge that you’re attributing to the individual company is actually in the supply chain for the company, not the company itself. This applies not just to the nitty-gritty of actually building components, but even matters of overall product design. As an example, Foxconn has a large say in iPhone manufacturing, because, at the end of the day, they’re the ones putting the things together. In the auto industry, parts suppliers like Mopar or Denso often know more about the cars that Chrysler and Toyota build than Toyota or Chrysler themselves.
In addition, companies today carry much less inventory than they used to, as a result of the aforementioned JIT supply chains. So even if your modern steel corporation could be operated with 1899-era machinery and infrastructure, it’s still might not do you any good, because you’d rapidly run out of iron, coke, and the special alloying agents needed to make modern high-strength steel. Today, you can rely on computerized inventory management and logistical planning systems that are deeply integrated with your suppliers to ensure that new supplies of raw materials and spare parts reach your production facilities right when they’re needed. How are you going to do that in 1899? Hire a bunch of telegraph clerks?
Moreover, this reliance on supply chains forms another pressure point that a monopolist like Carnegie could use to suppress your firm. He could work with the railroads (which were not operating under the common carrier regulations that they operate under today) to ensure that your factories were starved of raw materials, while his factories were well supplied. No amount of scientific expertise can conjure finished steel out of thin air.
Finally, you allude to cash reserves, but even that might be a problem. Not all corporations are as cash rich as Apple or Microsoft. And even Apple and Microsoft keep large amounts of their “cash” in various short-term investments, offshore holding companies, and various tax shelters. It’s not like Apple has a giant underground vault filled with hundred dollar bills in Cupertino. So if you transported a company back in time, it might not have enough cash on hand to make payroll, much less sustain ongoing operations.
I think many people strongly underestimate how interconnected and interdependent firms in the modern economy are. Many people have an idea of how firms operate that was beginning to be obsolete in the ’80s, and is wholly obsolete today. Firms are increasingly disaggregated, as computerization has reduced transaction costs, allowing for a more Coasean equilibrium.
That said, many of these innovations have only really taken root since 1980 or so. Prior to that firms were more like the sort of vertically integrated enterprises that people envision when they think of a classic industrial corporation. Perhaps US Steel from 1968 could go back in time and compete effectively with the 1899 version of itself. But I’m not sure that the US Steel from 2018 could do the same.
When I said “company,” I was also including the employees, as potentially more valuable than the physical plant. Including the supply chain also is probably unfair, but I expect they could get pretty far with converting on-hand present-day cash to supplies before being teleported back in time.
This seems possible to me; even if they have to abandon lots of tools as unsupported by their new supply chain, I imagine them getting a lot out of a hundred years of scientific development.
I was also including the employees of the company itself, and all the machinery and equipment that the company has on hand. However, today, we live in a world of just-in-time supply chains, with companies subcontracting various specialized functions out to various subcontractors. Very few companies are the sort of vertically integrated enterprises that Ford or US Steel were at the turn of the century. As a result, a lot of the knowledge that you’re attributing to the individual company is actually in the supply chain for the company, not the company itself. This applies not just to the nitty-gritty of actually building components, but even matters of overall product design. As an example, Foxconn has a large say in iPhone manufacturing, because, at the end of the day, they’re the ones putting the things together. In the auto industry, parts suppliers like Mopar or Denso often know more about the cars that Chrysler and Toyota build than Toyota or Chrysler themselves.
In addition, companies today carry much less inventory than they used to, as a result of the aforementioned JIT supply chains. So even if your modern steel corporation could be operated with 1899-era machinery and infrastructure, it’s still might not do you any good, because you’d rapidly run out of iron, coke, and the special alloying agents needed to make modern high-strength steel. Today, you can rely on computerized inventory management and logistical planning systems that are deeply integrated with your suppliers to ensure that new supplies of raw materials and spare parts reach your production facilities right when they’re needed. How are you going to do that in 1899? Hire a bunch of telegraph clerks?
Moreover, this reliance on supply chains forms another pressure point that a monopolist like Carnegie could use to suppress your firm. He could work with the railroads (which were not operating under the common carrier regulations that they operate under today) to ensure that your factories were starved of raw materials, while his factories were well supplied. No amount of scientific expertise can conjure finished steel out of thin air.
Finally, you allude to cash reserves, but even that might be a problem. Not all corporations are as cash rich as Apple or Microsoft. And even Apple and Microsoft keep large amounts of their “cash” in various short-term investments, offshore holding companies, and various tax shelters. It’s not like Apple has a giant underground vault filled with hundred dollar bills in Cupertino. So if you transported a company back in time, it might not have enough cash on hand to make payroll, much less sustain ongoing operations.
I think many people strongly underestimate how interconnected and interdependent firms in the modern economy are. Many people have an idea of how firms operate that was beginning to be obsolete in the ’80s, and is wholly obsolete today. Firms are increasingly disaggregated, as computerization has reduced transaction costs, allowing for a more Coasean equilibrium.
That said, many of these innovations have only really taken root since 1980 or so. Prior to that firms were more like the sort of vertically integrated enterprises that people envision when they think of a classic industrial corporation. Perhaps US Steel from 1968 could go back in time and compete effectively with the 1899 version of itself. But I’m not sure that the US Steel from 2018 could do the same.