I had read The Refragmentation before, but I reread it shortly after reading your article to make sure I hadn’t missed something. I definitely think that Graham is onto something, but I’m just not sure that it actually cashes out into a lower maze level overall. In particular, deregulation seems to have reduced the size of moats around incumbents, but doesn’t seem to have resulted in an overall reduction in firm size; instead, what happened is that incumbents were merged or reorganized, and in some cases upstarts replaced them and grew bigger. But this does not necessarily mean that the replacements were less maze-like. Microsoft is now bigger than IBM, but does it actually have less middle-management maze behavior?
I seem to recall stats to the effect that the largest N corporations employ a steadily-increasing portion of the population and the economy, which would support this analysis. Unfortunately, I can’t find a data set online that shows this, though I did come up with https://www.bls.gov/web/cewbd/table_g.txt, which has some interesting data in it. (For example, I didn’t realize that the number of public sector firms was actually that small.)
I also noticed this, tucked away in a footnote inThe Refragmentation:
More precisely, there was a bimodal economy consisting, in Galbraith’s words, of “the world of the technically dynamic, massively capitalized and highly organized corporations on the one hand and the hundreds of thousands of small and traditional proprietors on the other.” Money, prestige, and power were concentrated in the former, and there was near zero crossover.
The tiny mom-and-pop store is now much rarer than it used to be. Decades ago, your groceries, home goods, clothes, and gas might all have been bought from retailers that had less than 5 employees, even if they were manufactured by much larger corps. These days you probably get all of them from large organizations.
I seem to recall stats to the effect that the largest N corporations employ a steadily-increasing portion of the population and the economy, which would support this analysis. Unfortunately, I can’t find a data set online that shows this, though I did come up with https://www.bls.gov/web/cewbd/table_g.txt, which has some interesting data in it. (For example, I didn’t realize that the number of public sector firms was actually that small.)
Ahhh yes, this would negate most of my confusion.
The tiny mom-and-pop store is now much rarer than it used to be.
Thanks in turn :).
I had read The Refragmentation before, but I reread it shortly after reading your article to make sure I hadn’t missed something. I definitely think that Graham is onto something, but I’m just not sure that it actually cashes out into a lower maze level overall. In particular, deregulation seems to have reduced the size of moats around incumbents, but doesn’t seem to have resulted in an overall reduction in firm size; instead, what happened is that incumbents were merged or reorganized, and in some cases upstarts replaced them and grew bigger. But this does not necessarily mean that the replacements were less maze-like. Microsoft is now bigger than IBM, but does it actually have less middle-management maze behavior?
I seem to recall stats to the effect that the largest N corporations employ a steadily-increasing portion of the population and the economy, which would support this analysis. Unfortunately, I can’t find a data set online that shows this, though I did come up with https://www.bls.gov/web/cewbd/table_g.txt, which has some interesting data in it. (For example, I didn’t realize that the number of public sector firms was actually that small.)
I also noticed this, tucked away in a footnote inThe Refragmentation:
The tiny mom-and-pop store is now much rarer than it used to be. Decades ago, your groceries, home goods, clothes, and gas might all have been bought from retailers that had less than 5 employees, even if they were manufactured by much larger corps. These days you probably get all of them from large organizations.
Ahhh yes, this would negate most of my confusion.
Yep, a very good point.