Monday, September 26, 2016

The Other Advantage of Big

The article in the Atlantic linked below describing the dichotomy between how "Conglomeration" has been able to deliver competitive prices, while still stifling entrepreneurialism, and of course amassing untenable political power, is an important read. It reminds us in clear terms just how much entrepreneurialism has declined here, but it also makes clear that not only is defining what is too big difficult, it shows us just how much we, as consumers, have come to love it. Economies of scale are able to work at least some magic after all, and when you throw in the degree to which the insanity of "low prices are everything," you get an entrenched ambivalence for both business and the public about mega corporations.

What we are forced to do here is to consider just why entrepreneurialism is a good thing in the first place. If you simply "google" (the ubiquity of search bigness also reminding us of our ambivalence) the phrase "the benefits of entrepreneurialism" you get a list that explains the benefit in terms of "new ideas," "competitive advantage," "new job sources," as well as the chance to start a business where you "disrupt" in ways where you can define how you will "work"and what you can get out of it. And, generally speaking, these can be quite beneficial; especially if you keep your focus narrowly confined.

Expand the focus to the world at large, however, and especially within Capitalism as an overall, complex system, and you begin to notice that, for every local benefit, there is usually a corresponding negative consequence elsewhere. That's the whole point of disruption, after all, to shake things up so that what once was the accepted way of doing something is now at a disadvantage. Which means these other parts of the system as a whole must shake out the old way and introduce the new. New ideas unquestionably give us the potential for system wide improvements, but they also often require quite painful restructuring; where "painful" becomes the loss of livelihoods, as well as significant chunks of capital investment.

Thus do we see that "innovation" can be a two edged sword. To which we must then consider the consequence of what happens when "innovation" worldwide is able to accelerate precisely because it has already happened, and will continue to do so, and woe be to those who only get undercut as the blade comes back for another down stroke. In this, of course, the electrification of everything, plays the part of knowledge amplifier; the cutting strokes happening ever more at the speed of nanoscale switches.

We need only then add a world in constant crisis (largely because fixing anything means someone has to pay while others may benefit) to create a mix of "uncertainty" to which the purveyors of capital react with ever growing trepidation. And one of the ways to protect yourself from complex uncertainty is to be big both horizontally, and vertically. If new then comes along you can buy it out before it does too much damage to your bottom line. A good number of people who may be working for you will have to suffer the usual consequences, but you as a company will likely be able to continue on just fine.

I have gone through this description to suggest to you that "innovation" is itself just another of the contradictions that Capitalism is now confronted with. An inevitable contradiction in that competition has always been the boon and bane of those who have accumulated large counts of capital. Now that it has been mutated into a blur of metastasization, always accelerating, they fear it even as they still promote it. And we are left to trying to run on a speeding treadmill; a runaround that may surround us with a few improved rings to grasp, as we try to keep up with the pace, but which still doesn't really get us anywhere but a more precariously unbalanced world.

Trying to figure out how we can have the right kind of bigness is just as much a fool's errand as is thinking that profit can ever be tempered enough to provide living wages for even a simple majority of an increasing workforce. Or that production and consumption linked to livelihoods can ever be balanced with inherently limited bio systems. The problem is the system itself and the abundantly clear fact that it is no longer viable. A fact for which we will not be able to ignore much longer.

America’s Monopoly Problem

How big business jammed the wheels of innovation