RE: Re: Re: Binary scheme of democracy and centrali sm

["Devine, James" <jdevine@xxxxxxx>]

On Tuesday, April 16, 2002 at 14:37:41 (-0700) Sabri Oncu writes:
>.... [Williamson] is the founder of this "transaction costs
>economics" ...

Bill Lear writes: >Coase, not Williamson, is the founder of this theory.
...<

it's interesting how Coasean analysis of transactions costs hardly ever show
up in the privatization movement (which has similiar laissez-faire content).
If the city government privatizes its bus system, suddenly transactions
costs rise.

>One striking omission in all of this discussion so far is that we are
using the polite word "hierarchy" rather than the more descriptive
"totalitarianism" when describing firms' organizational structure.
Hierarchy's are not necessarily totalitarian.  Every firm that I have
seen is essentially totalitarian in practice.<

I don't like the word "totalitarian." The word is associated with a big
bunch of books and articles (distilled in literary form by Orwell's 1984)
that assumed that "totalitarianism" was an adequate term for describing both
Nazi Germany and Stalin's USSR. Crucial was the idea that such societies
would never change without external attack by the "non-totalitarian" free
world. This is just wrong, since both of these two (very different)
societies had severe internal contradictions. Further, the word
"totalitarian" has been used to justify the worst foreign policies by the
US. Jeanne Kirkpatrick, a Reaganoid, once said that we should support
"authoritarian" countries (i.e., pro-capitalist and pro-US military
despotisms) against "totalitarian" ones (i.e., non-capitalist countries that
wouldn't follow the US line).

One crucial thing that differentiates a corporate hierarchy (bureaucracy)
from the common image of totalitarianism is that you can always quit. It's
typically costly, but you can always quit. On the other hand, in the old
USSR [the standard-bearer of "totalitarianism" in the Cold War lexicon], you
could quit, but you still ended up working for the state. (Even so, the
system was much too inefficient -- riddled with internal contradictions --
to be called totalitarian.)

I think the word "totalitarian" should be dropped.
JD