If there is one thing that we learned from the 20th century it is that societies that gave more private control over how resources were used did better than those that had more state control over how resources were used. Perhaps in the 21st century that has changed, but for me that falls under the "extraordinary claims" category with the corresponding evidence requirements.
The structure of giant corporations today is like those centralized societies that were so inefficient in your example. The mandates to put AI in everything are one example of out of touch leadership throwing money and effort blindly towards things of dubious value. The sycophantic managers, afraid that they will be eliminated for insufficient fervor for the board’s latest fascination, will seize upon anything to prove themselves loyal and useful to those above them.
By moving the locus of control, whether it be considered the ceo or shareholders, so far from the actual business and implementing mandates based on whatever the current fancy is and meaningless targets of growth on such a giant scale you get the same sort of excesses.
The current system is marked by irrationality and uninformed and ill considered decision making. With smaller organizations and actual business competition they would be held to account by their competitors or just by running out of money before something catastrophic for the greater economy happened.
This is an excellent point. Thank you for posting it.
Large monopolistic mega-corporations do tend to have the same issues that one would see in the old 20th century planned economies like the Soviet Union.
Not sure why this obvious fact is being down-voted. The comments above don't mention that the killer feature of private orgs is the ease of exit, and therefore, the enormous risk of failure. This remains the dominant feature of private orgs, even if we can argue about certain orgs on the margin. For every example of "users are locked into either the Apple or the Android phone platform", I can think of several crappy Google and Apple products which failed and were withdrawn from the market (e.g. Google Wave).
It is much easier to exit from or steer a private org. For example, it is very possible to run a company which caters to 10 percent of a consumer base by providing niche products which may be slightly more expensive. Those 10 percent will simply consume less of some other good. It is very difficult to do an analogous thing at the state level, because we generally don't get individual "ticket books" which we can "spend" on more of one state service vs. another. The democratic model is that you first get 50+ percent support and then your coalition decides how resources are allocated for almost everyone.
> If there is one thing that we learned from the 20th century it is that societies that gave more private control over how resources were used did better than those that had more state control over how resources were used.
In some metrics (such as GDP), yes. And in other metrics (such as wealth inequality and health care), the answer is less clear-cut.
The West encompasses a wide gradient of private vs. state control over resources, and there are states which aren't typically considered Soviet or Western (e.g. Nordic states.)
