Organization Theory

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* Book: Organization Theory. Kevin Carson.

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Organization Theory, by Kevin Carson a left-oriented free-market anarchist, is a 655-page tome that builds upon his earlier work on Mutualist political-economic ideas. The key argument is that large-scale production (whether it is of goods or services) has been incentivized and favored over small-scale production due to the alliance between the state and corporations. Because of this emphasis on "economies of scale" and "bigger is better", our tools and companies and goods and services are all oriented towards supporting large companies and as pointed out several times in the book, this is inefficient and moves away from the cost principle. The book has a solid foundation in Benjamin Tucker's mutualism theory, especially the idea of four monopolies that restrict free trade (monopolies on money/credit, land, tariffs and patents).

The book is available here:

The whole book is available here.


Key argument of the book, by Kevin Carson:

"the rise of mass-production industry did not result from the "ineluctable economic logic" of superior efficiency.

In fact, I believe that with a few exceptions, small-scale factory production on the Emilia-Romagna model (integrating general-purpose powered machinery into craft production, with small batches and frequent changes between production runs, geared to local demand on a just-in-time basis) is *more* efficient than mass-production when the latter's costs of long-distance shipping and push-distribution are taken into account.

I agree with Borsodi and Mumford that the invention of the electric motor eliminated the main imperative behind the large factory (economizing on horsepower from a single prime mover), and put the household and small shop on an even footing with the "Dark Satanic Mill." Most of the economies of machine production are captured with the bare adoption of machinery on a small scale; the modest additional reductions in unit production cost with large-scale machinery are more than offset by increased costs of distribution and marketing.

In a free market, American industrialization arguably would have taken the pattern of a hundred Emilia-Romagnas. Instead, the state tipped the balance with massive railroad subsidies, "intellectual property" law, tariffs, regulatory cartelization, etc. Electrical machinery, rather than living up to the full decentralizing potential of Mumford's "neotechnic" revolution, was fitted into the older organizational forms of the paleotechnic era. So what we wound up with was Sloanist mass-production: enormously expensive product-specific machinery, which mandated large-batch production 24/7 to minimize unit costs, which mandated in turn corporate control over external society to make sure the stuff would be bought up and the wheels could keep turning. When you figure the enormous amounts of crystalized labor wasted to keep the system running (the buffer stocks of unfinished goods and the inventories of finished goods awaiting orders, described by Waddell and Bodek in Rebirth of American industry; and the mountains of discarded products in landfills that could have been better designed around modular components for easy repair and long life), it's not really that economical.

In fact the costs of extending Adam Smith's market area exceed, in most cases, the savings from increased division of labor. The problem is that the state subsidized those costs and externalized them on taxpayers.

In some cases, like heavy engine blocks, the large mass-production factory really is most efficient in absolute terms. But in most such cases, I would argue that the product is itself an answer to an artificial problem created by the state. The present extent of demand for cars results from state subsidies to sprawl and monoculture. The civilian jumbo jet almost certainly would never have come into existence on its own nickel, abseent the heavy bomber program to fully utilize the expensive machine tools required to produce it.

The most prominent case I can think of of a genuinely valuable product that requires large-scale production, is the microprocessor foundry--but even there the scale of demand would be considerably reduced by easily reprogrammable chips (in which case chips would be harvested from landfills on the same pattern as local minimills harvesting scrap metal).

Without government subsidies to economic centralization and capital-intensive production methods, IMO our economy would look a lot more like Borsodi and Mumford, and a lot less like Chandler and Schumpeter."


Part One: State Capitalist Intervention in the Market

  1. Chapter One: A Critical Survey of Orthodox Views on Economy of Scale
  2. Chapter Two: A Survey of Empirical Literature on Economy of Scale
  3. Chapter Three: State Policies Promoting Centralization and Large Organizational Size

Part Two: Systemic Effects of Centralization and Excessive Organizational Size

  1. Chapter Four: Systemic Effects of State-Induced Economic Centralization and Large Organizational Size

Part Three: Internal Effects of Organizational Size Above That Required for Optimum Efficiency

  1. Chapter Five: Knowledge and Information Problems in the Large Organization
  2. Chapter Six: Agency and Incentive Problems in the Large Organization
  3. Appendix 6A: Toilet Paper as Paradigm
  4. Chapter Seven: Economic Calculation in the Corporate Commonwealth (the corporation as planned economy)
  5. Chapter Eight: Managerialism, Irrationality and Authoritarianism in the Large Organization
  6. Appendix 8A: Blaming Workers for the Results of Mismanagement
  7. Chapter Nine: Special Agency Problems of Labor (internal crisis tendencies of the large organization)
  8. Chapter Ten: Attempts at Reform from Within

Part Four: Conjectures on Decentralist Free Market Alternatives

  1. Chapter Eleven: The Abolition of Privilege
  2. Appendix 11A: Reciprocity and Thick Libertarianism
  3. Chapter Twelve: The Cost Principle
  4. Chapter Thirteen: Dissolution of the State
  5. Chapter Fourteen: Decentralized Production Technology
  6. Chapter Fifteen: Social Organization of Production (cooperatives and peer production)
  7. Chapter Sixteen: Social Organization of Distribution and Exchange
  8. Chapter Seventeen: Mutual Aid

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