I suspect the confusion is due to the term "efficient", which has two meanings:
1. (technical) creating minimum waste
2. (common) effective.
In the real world, firms are undeniably effective compared to most/all real organization schemes. This article is simply saying that there are things that firms do which generate waste (meaning they are not "efficient"). This is a little silly in a way. Unicorns are also better than dogs (and all other real pets).
In Europe, companies were originally gifts of a private trading monopoly made by a monarch. The Post Office model happened a lot later.
There should be more of a distinction between "efficient" used to mean "gets things done effectively and invents new and clever ways to get things done while saving everyone time and money", and the capitalist meaning of "accumulates profits by screwing everyone except senior management and perhaps the stockholders."
It's perfectly possible for the latter kind of "efficient" company to be very inefficient in the first sense.
In fact if you have a market with a very limited number of established large players, it's pretty much the default.
I've never understood the argument. I've worked in several different private companies, and calling them "Efficient" is so off base as to be laughable. Remember, a private company will happily let an import engineer go instead of giving them a small raise.
I'm curious how I could have better phrased my comment so as to not invite responses like this. I guess I realize that 'efficient' vs 'effective' is a quibble, but I was trying to respond to the ambiguous usage of 'efficiency', not trying to give the final answer on the comparison.
Business efficiency is not generally a controversial goal -- although what counts as 'waste' is.
The only time people seem to argue against efficiency (generally via false dichotomy, see 'hardware is cheap, programmers are expensive') is in a blank-check environment where nobody is holding these decision-makers to account for self-serving inefficiencies.
> "Producing efficient X" and "Efficiently producing X" aren't the same thing.
I understand your claim. I'm trying to avoid a semantic argument by making it clear what I meant. I'm not arguing about what the "true meaning" of those phrases are. Just know I was referring to economic efficiency both times.
And no it is not one. There is a big difference between "economically efficient" and "wasting their times on a unnecessary job", especially in the context of GMI.
In the real world, firms are undeniably effective compared to most/all real organization schemes. This article is simply saying that there are things that firms do which generate waste (meaning they are not "efficient"). This is a little silly in a way. Unicorns are also better than dogs (and all other real pets).
reply