Like it or not, giant, vertically integrated corporate enterprises were the most efficient means of organizing the production and distribution of mass produced goods and services. Bringing together supply chains, production processes, and distribution channels in vertically integrated companies under centralized management dramatically reduced transaction costs, increased efficiencies and productivity, lowered the marginal cost of production and distribution, and, for the most part, lowered the price of goods and services to consumers, allowing the economy to flourish. While those at the top of the corporate pyramid disproportionately benefited from the increasing returns on investment, it's only fair to acknowledge that the lives of millions of consumers also improved appreciably in industrialized nations.
Jeremy RifkinRelated topics
corporate cost distribution fair giant goods increasing lives marginal mass production productivity pyramid top under while means chains channels returns costsRelated quotes
Economic growth occurs if output grows faster than population. Given the described assumptions about the way people behave, economic growth will occur if property rights make it worthwhile to undertake socially productive activity. The creating, specifying and enacting of such property rights are costly... As the potential grows for private gains to exceed transaction costs, efforts will be made to establish such property rights. Governments take over the protection and enforcement of property rights because they can do it at a lower cost than private volunteer groups. However, the fiscal needs of government may induce the protection of certain property rights which hinder rather than promote growth; therefore we have no guarantee that productive institutional arrangements will emerge.
Douglass North
Just as economic pressure from the base ... is able to modify the production of surplus value, so pressure grounded in spatial practice is alone capable of modifying the apportionment of that surplus value - i. e. the distribution of the portion of social surplus production allotted to society's collective 'interests', to so-called social services. Such grass-roots pressure, if it is to be effective in this regard, cannot be confined to attacking the state qua guardian of the 'general interest'. For this state, born of the hegemony of a class, has as one of its functions - and a more and more significant function - the organization of space, the regularization of its flows, the control of its networks. It devotes to these purposes a considerable part of global surplus value, of the surplus production assigned to the running of society.
Henri Lefebvre
The finance conception of the modern corporation, which currently dominates, emphasizes control through the use of financial tools which measure performance according to profit rates. Product lines are evaluated on their short-run profitability and important management decisions are based on the potential profitability of each line. Firms are viewed as collections of assets earning differing rates of return, not as producers of given goods. The firm is not seen as being a member of only one industry. Consequently if the prospect of an industry in which it participates declines, the firm disinvests. The problem for management from this perspective is to maximize short-run rates of return by altering product mix, thereby increasing shareholder equity and keeping the stock price high.
Neil Fligstein
Japan had come to terms with Russia because of her difficulties, but this did not mean approval of communism. Communism meant the end of emperor-worship, and feudalism and the exploitation of the masses by the ruling class, and indeed almost everything that the existing order stood for... But communism is the outcome of widespread misery due to social conditions, and unless these conditions are improved, mere repression can be no remedy. There is a terrible misery in Japan at present. The peasantry, as in China and India, are crushed under a tremendous burden of debt. Taxation, especially because of heavy military expenditure and war needs, is very heavy. Reports come of starving peasants trying to live on grass and roots, and of selling even their children. The middle classes are also in a bad way owing to unemployment and suicides have increased.
Jawaharlal Nehru
Capitalism should not be condemned, since we haven't had capitalism. A system of capitalism presumes sound money, not fiat money manipulated by a central bank. Capitalism cherishes voluntary contracts and interest rates that are determined by savings, not credit creation by a central bank. It's not capitalism when the system is plagued with incomprehensible rules regarding mergers, acquisitions, and stock sales, along with wage controls, price controls, protectionism, corporate subsidies, international management of trade, complex and punishing corporate taxes, privileged government contracts to the military-industrial complex, and a foreign policy controlled by corporate interests and overseas investments. Add to this centralized federal mismanagement of farming, education, medicine, insurance, banking and welfare. This is not capitalism!
Ron Paul