Via Dave Pollard, whose How To Save the World blog, would probably get my vote as the best in the world.

Here’s an extensive excerpt because he touches on one of the great myths of the industrial age that is being dismantled ever more as our means of production get more distributed: the myth of the economies of scale.

Check out the great graph in the original article.

Dave Pollard:

“The corporations would have you believe that the combination promises “economies of scale” — that redundant positions can be eliminated, duplicate processes eliminated, volume discounts obtained from suppliers, and efficiencies obtained by combining operations. Anyone who has ever been through a combination can tell you that this almost never occurs. In fact, costs rise after the combination because of diseconomies of scale — the larger the organization, the greater the hierarchy, the more the bureaucracy, and the more infrastructure is needed to keep it all connected. Small is agile. Large is clumsy. There are no efficiencies of scale. So why do these transactions still occur?

In a word, power. Consolidation isn’t about the consolidation of resources, it’s about the consolidation of power.

Size gives you four types of power:

Power over regulators: Oligopolies of three or four companies controlling an industry (and this is the case in most industries now — check out the wonderful blog Oligopoly Watch if you doubt me) have the power (and money) to lobby governments to deregulate their industries, provide them with massive subsidies, introduce ‘free’ trade agreements to expand the oligopoly’s reach globally, and introduce and enforce intellectual property laws that inhibit innovation and block new competitors from entering the market. We used to have ‘anti-combines’ laws to prevent this market distortion but the oligopolies have effectively had all such regulations eliminated, neutered, or rendered unenforceable. So now governments are effectively in the back pockets of the corporatist oligopolies. That’s power, and it brings with it enormous profit.

Power over consumers: Oligopolies can and do fix prices so that consumers have no choice but to pay these prices or do without. Those that try to find workarounds like file-sharing to circumvent oligopoly price-gouging are threatened with lawsuits and jail by the huge armies of lawyers that the oligopolies employ. These oligopolies also control the media and blanket the airwaves with their propaganda. The law of ‘supply and demand’ is hence subverted as the suppliers control the market.

Power over suppliers: Oligopolies can and do bully suppliers to sell to them at prices just high enough to keep them solvent and dependent on the oligopolies (this type of oligopoly, more correctly called an oligopsony, essentially dictates ever-decreasing prices they will pay to manufacturers or wholesalers, Ã la Wal-Mart, since there are no significant alternative ways for manufacturers or wholesalers to get their products to the consumer marketplace). If you’re both a supplier and a customer of oligopolies (like small farmers for example) you get squeezed at both ends. They have all the power.

Power over employees: Oligopolies can and do bully employees to work for minimal wages and benefits or have their jobs offshored to struggling nations whose people are so desperate they’ll work for almost nothing. And why are the people of struggling nations so desperate? Because these same oligopolies work in cahoots with despots and corrupt officials in those nations to steal the land and natural wealth of those nations and leave behind nothing but pollution, waste and destitution. Although the inequality between rich and poor has never been higher, the power of ‘organized’ labour has never been lower. The power rests with the oligopolies.”

From his conclusion:

“Individually, and separately, we can’t compete with the power of oligopolies. But together, working collaboratively as peers, we can have far more power over our own lives, our economy, our society, and the well-being of all-life-on-Earth, than oligopolies could ever dream of having. A century ago, to fight the corporatist oligopolies, we organized in labour unions. Peer Production and the Generosity Economy is the 21st century ‘labour union’, united this time not to negotiate with producers, but to render them obsolete, to replace them.”