It’s like the power of an organization is a square root or perhaps only a logarithm of how many people work for it. It is horrible to see the diminishing returns, but larger still means stronger.
Maybe this is the actual reason why centralized economy sucks. Not because of mere lack of information (as Hayek assumed), because in theory the government could employ thousands of local information collectors, and process the collected data on computers. But it’s the maze-nature that prevents it from doing this in a sane way. The distributed economy wins, despite all its inefficiencies (everyone reinventing the copyrighted wheels, burning money in zero-sum games, etc.), because the total size of all mazes is smaller.
But in long term, the successful mazes try to convert the entire country into one large maze, by increasing regulation, raising fixed costs of doing stuff, and doing other things that change the playground so that the total power matters more than the power per individual.
beware the unstated alternative: is there reason to believe that un-coordinated individuals grow in power linearly (or any faster/slower than corporate/government aggregations)?
If this power calculation holds, then things suck because there are more people, not because of how they’re organized. I’d call that conclusion fairly repugnant.
Depends on situation. Sometimes people can do things independently on each other. Sometimes people do things together because it is more efficient that way. And sometimes people do things together because there is an artificial obstacle that prevents them from making things individually. (In other words, mazes are trying to change the world in a way that makes mazes mandatory.)
As a made-up example, imagine that there are three cities, and there is a shop in each city, each shop having a different owner. (It is assumed that most people buy in their local shop.) Maybe the situation is such that it would be more profitable if there is only one shop chain operating in all three cities. But maybe there is a shop chain successfully lobbying to make it illegal to own individual shops. Or not literally illegal, but perhaps they propose a law that imposes a huge fixed cost on each shop or shop chain, so the owner of one shop would have to pay this tax per shop, while the owner of a chain only has to pay it once per entire chain. Such law could make the shop chains more profitable than uncoordinated shops, even in situations where without that law they might be less profitable.
So, we have two levels of the game here: What is more profitable assuming no artificial obstacles. And what is more profitable when players are allowed to lobby for creating artificial obstacles for competitors using a different strategy. (That is, suppose that the state is not corrupt so much that it would not make a law that makes life specificially easy for corporation A and difficult for an equivalent corporation B, but it can be convinced to make a law that makes life easier for certain types of corporations and more difficult for other types. So the corporation A cannot use the law as a weapon against an equivalent corporation B, but e.g. large companies could use the law as a weapon against small companies. Creating a large fixed cost for everyone is a typical example.)
To answer your question, maybe sometimes things suck because there are more people, but sometimes things only suck because mazes have the power to change the law to make things suck.
maybe sometimes things suck because there are more people, but sometimes things only suck because mazes have the power to change the law to make things suck.
We’re in complete agreement. I’m looking for the model that tells me how to know which (or what proportion) of these is true for actual mazes today.
It’s like the power of an organization is a square root or perhaps only a logarithm of how many people work for it. It is horrible to see the diminishing returns, but larger still means stronger.
Maybe this is the actual reason why centralized economy sucks. Not because of mere lack of information (as Hayek assumed), because in theory the government could employ thousands of local information collectors, and process the collected data on computers. But it’s the maze-nature that prevents it from doing this in a sane way. The distributed economy wins, despite all its inefficiencies (everyone reinventing the copyrighted wheels, burning money in zero-sum games, etc.), because the total size of all mazes is smaller.
But in long term, the successful mazes try to convert the entire country into one large maze, by increasing regulation, raising fixed costs of doing stuff, and doing other things that change the playground so that the total power matters more than the power per individual.
beware the unstated alternative: is there reason to believe that un-coordinated individuals grow in power linearly (or any faster/slower than corporate/government aggregations)?
If this power calculation holds, then things suck because there are more people, not because of how they’re organized. I’d call that conclusion fairly repugnant.
Depends on situation. Sometimes people can do things independently on each other. Sometimes people do things together because it is more efficient that way. And sometimes people do things together because there is an artificial obstacle that prevents them from making things individually. (In other words, mazes are trying to change the world in a way that makes mazes mandatory.)
As a made-up example, imagine that there are three cities, and there is a shop in each city, each shop having a different owner. (It is assumed that most people buy in their local shop.) Maybe the situation is such that it would be more profitable if there is only one shop chain operating in all three cities. But maybe there is a shop chain successfully lobbying to make it illegal to own individual shops. Or not literally illegal, but perhaps they propose a law that imposes a huge fixed cost on each shop or shop chain, so the owner of one shop would have to pay this tax per shop, while the owner of a chain only has to pay it once per entire chain. Such law could make the shop chains more profitable than uncoordinated shops, even in situations where without that law they might be less profitable.
So, we have two levels of the game here: What is more profitable assuming no artificial obstacles. And what is more profitable when players are allowed to lobby for creating artificial obstacles for competitors using a different strategy. (That is, suppose that the state is not corrupt so much that it would not make a law that makes life specificially easy for corporation A and difficult for an equivalent corporation B, but it can be convinced to make a law that makes life easier for certain types of corporations and more difficult for other types. So the corporation A cannot use the law as a weapon against an equivalent corporation B, but e.g. large companies could use the law as a weapon against small companies. Creating a large fixed cost for everyone is a typical example.)
To answer your question, maybe sometimes things suck because there are more people, but sometimes things only suck because mazes have the power to change the law to make things suck.
We’re in complete agreement. I’m looking for the model that tells me how to know which (or what proportion) of these is true for actual mazes today.