What a fantastic article by Kevin Carson in today's p2p-blog! This build up under the statement of Nikos Salingaros that every stable system has fractal properties, where the smaller and smaller units outnumber the larger by far in numbers. We have no better way to organize ourselves if we want to become part of nature, something we cannot avoid if we want our societies to survive.
As the p2p philosophy is a
free culture, I reprint the whole article.
How Much of the Economy is Friction?
Charles Hugh Smith raises the question of how much of the U.S. economy consists of the actual output of goods and services, versus the friction entailed in producing them. As a small example, he cites a physicians’ group that includes ten doctors — and twelve billing clerks.
That’s the general subject of a research paper I did for
Center for a Stateless Society (C4SS),
The Political Economy of Waste.
The larger and more hierarchical institutions become, and the more centralized the economic system, the larger the total share of production that will go to overhead, administration, waste, and the cost of doing business. The reasons are structural and geometrical.
At its most basic, it’s an application of the old cube-square rule. When you double the dimensions of a solid object, you increase its surface area fourfold (two squared), but its volume eightfold (two cubed). Similarly, the number of internal relationships in an organization increases as the square of the number of individuals making it up.
Leopold Kohr gave the example, in The Overdeveloped Nations, of a skyscraper. The more stories you add, the larger the share of floor space on each story is taken up by ventilation ducts, wiring and pipes, elevator shafts, stairwells, etc. Eventually you reach a point at which the increased space produced by adding stories is entirely eaten up by the increased support infrastructure.
