Is this the advice you give your customers? Do you know the managerial class has been hugely downsized? Make vs buy is a tool to deal with assymetrical information. You need to get out more.
Its a shame that you're not. You'd make my job so much easier! You allow personal bias to corrupt your viewpoint; rather than adopting a position based on the evidence. Rationalisation rather than rationality!
Read up on Coase and transaction costs, then get back to me. Your lack of content, when it comes to economics dialogue, may offend people!
I read up on Coase the last time you brought him up. I don't see his theorem applied in real world. Government adds cost to transactions, and regulates instead of letting the market seek the best solution. What is your point?
Wow, just noticed that you've posted nearly 20,000 times here! That's so strange that you had such a difficult time answering me when I asked you whether your perspective matters. Clearly you must believe your perspective matters enough to have shared it so many times! Let me ask you another question. Hopefully it won't be as difficult as my previous question. When you post on these forums...are there transaction costs involved?
You didn't 'read up' very well. I'm assuming you've got as far as the Coase Theorem. That's typically used to suggest that Pigovian taxes can be avoided because externalities can be treated purely as a problem with property rights. That's bogus though! Its actually an understanding of the importance of transaction costs. And its those transaction costs that you need to understand. You'd then be able to understand the existence of the firm (to Coase- and the New Institutionalists- a hierarchical mechanism adopting vertical integration and the associated economic planning)
Planning isn't the same within/out the market. Planning done in the private sector gets rapid and guiding feedback in regards to their decisions, politicians are only evaluated during election time and even then it seldom provides accurate feedback.
The point was that planning occurs everywhere, often the costs of decision making are more expensive than just mandating a decision, hence the visible hand of management. The difference between them is that one is forced to react quickly to the feedback it receives from the market, the government is seldom held accountable for their mismanagement, or even worse they prop up failures when the market has provided clear feedback on it's preferences.
Under that definition, even the make / mandate is a decision, with transaction costs. Have you ever seen an executive mandate a decision? I have done it many times, just like I have called meetings to make a decision. Successful businesses spend the cost of making a decision when they believe that cost is less than a bad decision. All to optimize profits (some, short term, some long term).
Perhaps, but often even those are outweighed by the costs of information gathering and decision making. Right, my point exactly. Planning isn't an activity unique to the state. "Spend the cost" - no idea what you're saying here. The premise still remains, islands of planning emerge from "free market", if they were without flaw, this would never occur.
The tech boom / bust was an underdamped feedback look, caused by a delay between the action and reaction. MIT's Beer Game is based on the impact of that delay. Politicians can make bad decisions and get re-elected by making the opponent look like they would make worse decisions. And, both parties put up enough idiots for that to work. (I want "None of the Above" on the ballot - if it gets the most votes - the seat remains vacant.) I don't see many companies that succeed by advertising their product isn't as crappy as thee competiton.
If you consider risks as a market flaw, then you are faded to believing that the free market is flawed and erroneously claim that government are not subject to the same risks, or erroneously think that it will (luckly) make the decisions with the best outcomes.
If I am going to spend $250K to design and tool a product for a customer, based on their forecast, I'm going to verify: The customer has provided accurate forecasts in the past That the product the customer is building is likely to meet the forecast. That our price will be low enough to capture a significant market share (when you sell millions of pieces, no customer goes sole source). Why do you think the free market is devoid of planning? There isn't an overall coordinator, but most buyers and sellers plan what to buy, what to sell, and change those plans frequently.
And because it was allowed to evolve without interference continues to be vibrant, winners and losers were chosen, and not arbitrarily. Yup, again that was my point when I said that planning isn't the same inside/outside the market. If there was a product you had no choice but to purchase, you probably would. Not a lot of sense was made here.... but their both flawed and had you read what I've written you'd have known that already. The market and the state are symbiotic and flawed.
You're overplaying the difference. Both are characterised by error from distributed knowledge. Perhaps the biggest difference is that hierarchy is more inflamed in the private sector, given the use of the internal labour market to ensure compliance. That would suggest greater risk of error within private sector planning
All very expensive, information is hard to find and knowing what information is valuable is often hard to determine, that's why management turns to planning. What? I understand your words but feel like I'm talking past you, the market is most assuredly not devoid of planning. ...sigh... hence my mention of "islands of planning"
Exactly. The best example I can think of is health insurance. Not post Obamacare, just post regulated to death....
Difference being that one must bear an immediate burden from one and the other may never manifest themselves. So yes, they both results from inherit flaws, but the market is quick to label the losers. That sounds incredibly hard to support considering that less bearucrats represent more voters and delegate more dollars than ever in the history of man, talk about steep hierarchy! So the state planners decisions not only have a completely missing feedback loop, but affect a greater proportion of the populace than private decisions.
It's not required currently and we still see insurers trying to reshape themselves to connect with those they insure. Kaiser is a good example, and the number 1 rated company in the US is an insurer... USAA.