Adumbration

This episode wraps around the context of our modern economy, focusing on features of increased specialization and dispersion of knowledge, and what checks are there to institutional size and scope.   ‎

The discussion addresses what seems to be a recurring undercurrent in many discussions I have had in the last few years - that of whether we must have concentration of power in government to fight the concentrations of power in economics, whether a strong central government weakens economic power, or whether powerful government and powerful large firms are friends. 

I think the answer to this question is recently illustrated by the cases of Goldman Sachs, Fannie Mae, and Freddie Mac, where government did anything but put them out of business.   General Motors and Chrysler are related examples, where the powerful large firms are bailed out of thier mistakes by the powerful large government.

The population grows, the size of the economy grows, but the scope of control of individual legislators grows with it, regardless of economies of scale that would otherwise limit that power.  Consider the size of most city public school districts, arguably far larger than allows for efficiently responding to the changing demands of parents and their children, but the political environment in which they exist preclude anything but the slowest restructuring to reflect those changing demands.

Knowledge and Power - Unchecked and Unbalanced (9/6/2010) - Arnold Kling, author of Unchecked and Unbalanced, talks about the the relationship between knowledge and power. In the modern world, specialization has increased and knowledge is increasingly dispersed. But political power has become more concentrated.