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I'm not convinced that anything has ever been built by the invisible hand of the market guiding large numbers of small productive units. 'The market' is a stand-in for real or wannabe aristocracy, and always has been.

That doesn't mean large structures can't evolve without markets or centralised planning. Historic non-Western cities prove that point - cities may be supported by trade, but they're not necessarily defined by it.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jul 17th, 2008 at 07:28:09 AM EST
[ Parent ]
Well, that's the point, isn't it? We have our political leadership running around gutting the industrial base by trying to force it to function as a collection of small competing units. The only ones who benefit, temporarily, are the financiers. After a while, the economy crashes and they lose out too, except that tere is no industrial base left. <shudder>

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu Jul 17th, 2008 at 07:41:05 AM EST
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Small competing units are fine for small competing products. When there's a low cost of entry, very interesting things can happen - but they won't be big interesting things.

I think the push away from industrialisation is more complicated. It's a mixture of opportunism, social snobbery, class war and a desire to emasculate unions, and an understanding that capital is much better at making more capital when it doesn't have to deal with real things in the real world.

But there's a more basic metaphor. The only real currencies in economics are physical commodities and trust.

If you build a hyper-competitive system where no one can trust anyone else, sooner or later - completely unexpectedly - trust evaporates, and the system implodes in a spectacular display of fiscal paranoia.

If you're running out of physical commodities at the same time - that's also not a good thing.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jul 17th, 2008 at 08:20:16 AM EST
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