A Critical Survey of Orthodox Views on Economy of Scale
Technocratic liberals, in their analysis of American industrial history, have tended toassume the superior efficiency of large-scale organization, and to accept "economies of scale" as a sufficient explanation for the rise of the large corporation from a supposedly"laissez-faire" economy. In the words of Randall Meyer,
[The] problems of our times will require greater, bigger organizations than we have now,rather than smaller ones, for their solution.... [We must therefore] cast aside our outmodednotions of size and our fear of bigness
Of course this assumption is not limited to liberal managerialists. It is shared by boththe vulgar Marxists (who see One Big Trust as the penultimate stage in the progressivedevelopment toward state socialism), and the vulgar Austrians (who equate capital-intensiveness or "roundaboutness" as such with superior productivity).Among the Marxists, it started with Marx and Engels themselves. In
The Manifestoof the Communist Party
, they identified the concentration of capital and the centralizationof production, as such, with the progressive role of the bourgeoisie:
The bourgeoisie keeps more and more doing away with the scattered state of the population,of the means of production, and of property. It has agglomerated population, centralised themeans of production, and has concentrated property in a few hands....The bourgeoisie, during its rule of scarce one hundred years, has created more massiveand more colossal productive forces than have all preceding generations together. Subjectionof Nature’s forces to man, machinery, application of chemistry to industry and agriculture,steam-navigation, railways, electric telegraphs, clearing of whole continents for cultivation,canalisation of rivers, whole populations conjured out of the ground — what earlier centuryhad even a presentiment that such productive forces slumbered in the lap of social labour?...* * *Centralization of the means of production and socialization of labor at last reach a pointwhere they become incompatible with the capitalist integument.
Engels took this tendency of Marxism even further, laying the groundwork for Lenin'slater embrace of Taylorism
1 "The Role of Big Business in Achieving National Goals," in David Mermelstein, ed.,
Economics:Mainstream Readings and Radical Critiques
. 3rd ed. (New York: Random House, 1975). Quoted inWalter Adams and James W. Brock.
The Bigness Complex: Industry, Labor and Government in the American Economy
. 2nd ed. (Stanford, Cal.: Stanford University Press, 2004), p. 64.2 Karl Marx and Friedrich Engels.
Manifesto of the Communist Party.
3 There is a legitimate question as to whether Taylor himself was a "Taylorist," in the vulgar sense. SeeChris Nyland, "Taylorism and the Mutual Gains Strategy,"
vol. 37 no. 4 (October 1998), pp. 519-542 (thanks to Eric Husman for the tip). Subsequent references to "Taylorism" in this book will reflect conventional usage, without necessarily implying any aspersion on the work of Taylor himself.