On “Economies of Scale” and Other Magical Incantations
Kevin Carson | November 4th, 2014
There’s a certain kind of economic technocrat who tosses around the term “economies of scale” like a Young Earth creationist tosses around the Second Law of Thermodynamics. This is true of legacy liberalism, obviously, which is still defined by the mid-20th century mass-production paradigm of Joseph Schumpeter, John Kenneth Galbraith and Alfred Chandler. It’s also true of most Austrian economists in the tradition of Mises, who see capital-intensiveness or “round-aboutness,” as such, as the key to productivity. A recent example of this mindset — as it relates to development economics — appears in a Foreign Policy article by Daniel Altman, an NYU economics professor (“Please Do Not Teach This Woman to Fish,” June 29). The subtitle, appropriately enough, is “Why poor countries have too many entrepreneurs and not enough factory workers.” ...