cheapseats

Size Matters

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THE RIGHT NUMBER OF ELEPHANTS
4 August 2008


I can’t remember what was the right number of times to read The Right Number of Elephants to my son when he was little, but it was a big number. Counting down, the Right Number of Elephants was X if you were doing Y, and Z if you were doing something else...two, for example, was the right number of elephants if you needed tireless jump rope twirlers...until, finally, one was the right number if you needed a friend. Sweet.

In Alcoholics Anonymous literature and throughout the recovery circuit, there features the concept of being right sized...a worker among workers, a family member among family members...rather than requiring disproportionate care or commandeering disproportionate attention.

American Politicos, and consequently a parade of legislation heralding a festival of advantages, continually address Small Businesses. Constantly, we are chided to think of Children, Families, and Small Businesses.

Why is that?

Why would a single, childless person climbing the corporate ladder want to think of children, families and small businesses? Why SHOULD a single, childless person who is securely ensconced in a long career with a big company be obliged to specially consider children, families and small businesses?

Children are defenseless, you say? That is why children have parents to look out for them. And THAT is why it is not only ridiculous but dangerous to pressure people to have kids they don’t want and won’t cherish. People don’t take care of things they don’t want, including things that are not things.

Families are sacred, you say? Some are, some aren’t. Same deal with single people. If government will safeguard only families, shall single people team up on paper, to reap the many benefits that fall to Marrieds, while simply going on about their lives as Singles?

But then what of gender lopsidedness? I heard it reported on radio that there are now 53 MILLION single women in America who, if history bears out, rather exceed the number of single men. If government will safeguard only families, do we mean to legalize polygamy, or do we mean to export single women to China or do we mean to add single men to our Chinese imports?

Small business is the stuff of the American Dream, you say? As American as baseball and apple pie? There is a time for every season under Heaven, including baseball season...and man does not live by apple pie alone.

Heretical as it may seem, I submit that the days of the quintessential Mom & Pop small business are largely over. However efficient a particularly well-run small business is, it is inefficient given the scope of the market. The “normal” course of commerce will routinely oblige a small business to charge higher prices, and will just as routinely prevent a small business from carrying wide selection or deep inventory. A small business has no economies of scale.

But gigantic retailers and service providers, as surely as Big Government, are bedeviled by bureaucratic bullshit. When an enterprise gets big enough, without fail, the left hand will cease to know what the right hand is doing...at a certain size, the left hand can’t even GLIMPSE the right hand in order to GUESS what it’s doing. Whereas a small operation has no economies of scale, behemoths have diminishing marginal returns. Further, and worse, at a certain size...notably the monopoly/oligopoly size...there is an absence of competition that simultaneously exacerbates inefficiency and eliminates moderation of price.

Just as soundest governance plays to the middle rather than the fringes, I submit that soundest business practice is found neither in small businesses nor in gigantic corporations but, rather, in mid-sized companies. TODAY. One night’s dream is another morning’s oversleeping.

Today, I sense that the lip service paid to the Small Businessman is to keep alive the fantasy that Ordinary Americans can bust into the glamorous high-flying Elite, when “conditions on the ground” say that the overwhelming majority of us will toil thanklessly, longer than ever, then die in relative poverty and total obscurity.

There was an expression that I suspect has become Politically Incorrect...too many chiefs and not enough Indians. Very well...too many chefs and not enough diners, too many owners and not enough customers, too many people being their own boss and not enough taxpayers to give them the relief they need to continue being their own boss.

Speaking of the agility, adaptability, flexibility, efficiency and price competitiveness of mid-sized companies, look to the oil, automotive and telecommunication industries for assurance that the proposed airline merger will well line the pockets of the few while it ill serves the needs of the many.


the almighty dollar copyright Implausible endeAVORS TM llc

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DanS.

You wrote that? neat.

First I've heard anybody here talk about economies or diseconomies of scale.

cheapseats

Yep, then posted it in the wrong place...less neat.

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DanS.

I think I fixed all of that.

cheapseats

Dear America:

These gargantuan mergers? You will rue the day that the Biggest of Big Boys are ostensibly saving.

Absent competition, prices will not be what the market will bear but what the whole of average people's earnings will bear. Absent competition, there IS no market.

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