From: Lee Corbin (lcorbin@tsoft.com)
Date: Sun Feb 09 2003 - 01:14:08 MST
Ron writes
> There is a political principle that says the more things you regulate
> the more things you have to regulate. In fact Hayek says that it is this
> idea that eventually leads all statists to a dictatorship. The number of
> things being regulated become so numerous and the changes required to keep up
> so numerous that eventually a court or legislature becomes incapable of doing
> the job. Eventually the country arrives at a point it requires a man on
> horseback to make all the decisions for everyone. Of course the more he is
> stuck in one place making decisions the more he is out of touch so the worse
> his decisions get.
Basically, yes. But it appears from Mancur Olsen's "Power and Prosperity,
Surviving Capitalists and Communist Dictatorships", that there *is* one
way for "the man on horseback" to know what is going on and how to control
it. Stalin seems to have understood this, but not his successors. (It's
difficult to say anything more after Hayek has spoken, but some are now
doing it!)
> You could argue that the reason that Germany & the Soviet fell was
> because their leaders became progressively more and more out of touch until
> they fell of their own weight.
> After the fall of the Soviet, questions were asked why our CIA was
> surprised by the collapse. The answer seems to be that the Soviet citizens
> were so afraid to fail, least they be punished, they never reported the
> truth. We had spies inside the KGB and were totally fooled because we
> thought KGB numbers would be correct -- in the end even the KGB didn't know
> what was going on. <G>
You have pinpointed the problems that arise in these situations,
but not the category. It turns out that it is *collusion* among
the underlings and workers. To satisfy their higher-ups, meet
quotas, and evade the system, they get to know each other and
establish trust. This trust is *vital*, because otherwise it
would be easy for any of them to be denounced to the KGB or
whoever.
But the trust takes years to grow, yet insidiously grow it does.
What Stalin would do is periodically kill everyone off in
purges, thus upsetting the links that were growing. Now
whether or not *psychologically* the Soviet Union or any
other country can tolerate that indefinitely is something
else. But productivity did remain high during the Stalin
years.
> Ford Motor Company production supervisors told me that under McNamara
> he would tell them to do as they were told or he would replace them -- a
> really tough guy. According to the old timers they got to count any car
> coming off the end of the production line and they dared not make their
> quota. As a result they were rolling cars off the end of the production line
> that weren't finished. They would then finish building the car out in the
> parking lot.
A perfect example. Note that this could not occur unless the
workers trusted each other (and whoever was watching them) not
to tell McNamara. What McNamara needed to do was purge the
workers periodically to destroy the trust that would otherwise
build up.
Or. Or, of course, adopt better, more humane, and ultimately
more profitable strategies. I think.
Hmm. Right now, a ruthless tyrant at Ford or anywhere else will
get such bad PR that he cannot do this kind of thing. But if PR
were not a factor, what then? Could a ruthless tyrant like
McNamara be the optimal manager? (After all, "purges" here are
relatively benign affairs.)
Lee
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