David Warren notes an odd similarity:
The last generation of Communists in power, in the Soviet Union and elsewhere, suffered from a debilitating foible. They did not themselves believe in the ideology they were preaching. Their efforts were thus directed to getting around the realities their forebears had not anticipated. They thus became their own enemies, working against their own unworkable socialist principles, and in the course of their tireless if frazzled ministrations, the Berlin Wall came down.
Capitalism suffers from the same problem today. The principles of Adam Smith are not seriously believed by any of its nominal advocates. They are not even known. Nor could they be, for like Marx, Smith is not even read. I have derived pleasure, on many occasions, from pointing out to some ideological enthusiast for Capitalism, that its supposed author was refulgently opposed to joint-stock companies. Which is to say, to the form of business ownership that controls — oh, I don’t know — ninety-five percent of the so-called “private sector” economy today?
I observed that, apart from any consideration of morality (and he was, after all, only an amateur economist, but a professional Perfesser of Moral Philosophy), Smith believed that joint-stock companies were inefficient, because essentially bureaucratic. This is inevitable when ownership is separated from management. “Growth,” or Bigness, subtly replaces profit (both mercenary and non-mercenary) as the principal aspiration.
As a general rule of thumb, when you want to get something done, use the smallest possible organization to achieve your desired goal. I always found it a warning sign of future decline when small companies I worked for started to take on the trappings of bigger companies … when the bureaucratic rot began to set in. In some cases, just the transition to having an “HR Department” (rather than managers hiring directly) was enough to trigger bureaucracy growth and efficiency losses.
