We just flipped Kos and The Nature of the Farm

You can get a Nobel for what Amazon does. Ronald Kos asked, Well, why do we have a farm? What is the topic of discussion? We may have networks of people who cooperate at times and not at others. So, why that central monolith of the firm?

The answer is that sometimes centralization is more efficient, sometimes network. Not something that can be known the first, this is one of those “it depends” answers that are so common in economics. See it and any special technical elve of production. the glass

Public sector workers and well-paid Londoners are driving the work-from-home boom, according to new figures from the Office for National Statistics.

Nearly two-fifths of workers now work remotely some or all of the time, up from just 12 percent before the pandemic.

But new figures show the benefit is much more common among people with degrees, higher earners and those who work for the state.

More than one in three employees in the public sector work in hybrid jobs, compared to about one-quarter in the private sector.

Telecommuting is not an option at all for half of private sector workers, while this is the case for only 42 percent of those in public sector employment.

However, the share of people working purely from home was slightly lower among public sector employees.

The ability to do WFH has been around for a while. It’s not uncommon for established means to really experiment with a bit of a shock, a product needed.

But there is some fun here – for that weak boring definition of fun used by arthashastra types. The greater division and specialization of labor enabled by capitalism and markets leads to a particular outcome in terms of firms and networks. Some operations still naturally gravitate towards small independents – plumbing, say. Of course, there are large plumbing firms (Pimlico Plumbers, etc.) but even they are largely networks of independent contractors. There’s no way a skilled guy with a spanner, onsite, can get the job done. There are no great efficiency gains within the firm from centralization.

On the other hand the actual accounting (no, not the firm of accountants, but the actual accounting) needed to be done in that centralized manner. Simply because most of it was accounting within centralized organizations. And the comms technology wasn’t really there to enable it to be done remotely.

These are just two examples, plumbing and accounting. Economics is replete with thousands of similar examples, each more or less like one of those two.

Well, now we have changed the comms technology. We have changed the calculations about centralized and decentralized networks. Currently it is proving itself between WFH and office changes. Plumbers never went to the central office, accountants did. Now not the accountant again.

What – I think – we’re going to see is not just change in the workplace. But those butchers get into a network of centralized organizations. For comms, the transaction cost, has decreased. So the firm as a form of organization – in relation to networks – is less efficient than it used to be. Therefore there will be fewer of them.

Although the real driver of these? Bureaucratic leeches make these centralized organizations so slow. Subcommittee on HR Power Skirt, Wake and Diversity Advisor, Choco Bikisis. All of these are substantial costs and networks of freelancers who collaborate for a task or a period of time will not have them. They will see their fixed income and expenses paid. It’s not just comms spending that’s changed, it’s centralized corporate spending visibility. And those unproductive costs will be canned under competition.

Economics will be done more like plumbing, less like corporate accounting. Even corporate accounting I expect to be done more like plumbing. In fact, a firm I do some (network) work for seems to have its corporate accounting in Valencia and Berlin. The two birds do this for no other reason than that they like being in those places.

Now, my confidence level in the next century is really high. Because the underlying economic forces will really work their way through the physical economic. Don’t know what the exact result will be, equally don’t know how fast. But it’s worth going back to the original question—cos on the nature of the firm—that’s a nice way to think about how a change around it would change the firm.

Nwtowrked work is now cheaper, compared to firm centralization, than before. So, we should expect more from one and less from the other.

You know, the exact opposite of the usual leftist whining about the inevitability of monopoly capitalism?