It’s an innate human urge to grow. To grow big enough to win at Monopoly.To grow enough to really make a difference. But how big is too big? Is there such a thing as too big?
Living in New Zealand, which has a fairly socialist, egalitarian, PC culture, and simultaneously one of the most open economies in the first world (thanks to huge waves of deregulation and privatization in the 80’s, and yes you could say it’s schizophrenic), I always looked at Americans’ distrust of big government with bemusement. The social compact with government just isn’t questioned in New Zealand, not like it is here in America.
The grand and palatial Capitol Building, Washington D.C.
To me it seemed like all you need to do to manipulate joe public in America was to accuse a person or piece of legislation as socialist or communist. Voila, it’s like the people are programmed to respond like Pavlov’s dogs – invariably to the substantial benefit of private corporations or individuals, and the detriment of the public.
I never really got this; why Americans had such a distrust of big government that it seemed to cloud their ability to maximize their own self interest. It seemed to me like whenever appeals against big government / socialism were used, it was a classic bait-and-switch where big corporations’ power was expanded and the rights of the public diminished.
But living here for a while, I’m starting to get it now. Why those appeals work. The government is just. so. fucking. enormous. It’s a leviathan that really can squash you as quickly and thoughtlessly as King Kong sitting on a chihuahua, even more so now there’s an inexorable march towards
a fascist police state greater security in the wake of the hysteria fear over terrorism.
And the bigger it gets, the more corrupt it gets, and the less able it is to respond quickly and accurately enough to the needs of its stakeholders – its citizens.
And yet this dynamic seems to my eyes to hold true for every large institution big enough to have global operations – whether it be a government, a corporation, or a religion. The Catholic Church and Goldman Sachs spring readily to mind.
We are implicitly, and sometimes explicitly, asked to take it on faith that the benefits of economies of scale always outweigh the disadvantages. But right now, nearly halfway through 2010, seems a good time to question whether or not this is actually true.
During the current debate over increased regulation of Wall St, several economists have pointed out that economies of scale basically diminish to zero once a bank’s assets reach around $100 billion. Say what? There is a limit to the benefits of size? If so it begs the question of whether this finding is a feature unique to large banks, or might it also hold true for governments, religions, and other multinational institutions?
Is big government inherently any better or worse at expanding or limiting the public’s liberties and quality of life than big business, or big religion? They’re all human constructed institutions of social control. I’d love to see any data or intellectual framework that suggested there was something inherent to the structure of these institutions that makes them better able to resist the vagaries of corruption, bureaucratic bloat and unresponsiveness.
Or whether it’s simply a matter of size.