Is there an Austrian Theory in regards to Economies of Scale?
The Law of Returns
This isn’t Austrian Economics, but it’s my personal conclusions.
Many economies of scale are false economies. A large corporation can more effectively lobby the State for favors than a small business. Therefore, large corporations dominate.
For example, a large bank is “too big to fail”. A small bank is allowed to go bankrupt. There’s no point operating a bank that isn’t “too big to fail”. A large bank can afford to spend lots of money on marketing and lobbyists, guaranteeing it’s “too big to fail”.
Is Wal-Mart successful because it’s a paragon of efficiency? Or, are Wal-Mart’s executives most skilled at manipulating a corrupt system for their personal benefit?
I think Wal-Mart is actually a paragon of efficiency and innovation as well.
They sell popular cheap healthcare.
Then you don’t know what an assembly line is.
citibank is an assembly line ?
a large staff does allow a greater division of labour ; that may lead to economies of scale. (its certainly a factor, whether its overpowered by other diseconomies of scale is contingent)
As such citibank may be considered an assemblyline if many individuals perform fairly menial but specialised tasks in delivering their product/service.
At the same time that bank is a pathetic failure being bailed out by a fascist government, n’est-ce pas ?
we can agree on plenty juan!
I certainly am not against assembly lines, or big business per se. But since the current system seems to be getting more mercantilist by the day, it’s not that clear which (big) businesses are really efficient as opposed to being good at politics.