Re: Back to slavery

["David S. Shemano" <dshemano@xxxxxxxxxxx>]

Max Sawicky writes:

>> Coincidently I'm reading Oliver Williamson at the moment,
>> whose existence and inspired lit debunks your assertion.
>>
>> Transactions costs can make hierarchy (the firm) more economical
>> than market exchange.

I am not sure I understand the significance of this.  If I want to acquire a widget, what difference does it make at a theoretical level whether I acquire the widget by contracting pursuant to a purchase agreement (market exchange) or employment agreement (hierarchical firm)?  I understand why transaction costs would influence how I acquired the widget, but what is the significance for neoclassical economics (or a critique of neclassical economics)?

David Shemano