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December 09, 2007

Economies of Scale

I've been listening to a lecture on Economics by Timothy Taylor and reading "Omnivore's Dilemma" by Michael Pollan. The two creating an interesting contrast.

Taylor mentions how we can increase our output by using economies of scale and a division of labor. For example, a shoe factory now days has a huge output and shoes are made by people doing a ton of repetitive tasks. However, what Taylor doesn't mention is decline in quality that happens when you divide the labor and go for maximum. Actually, if anything he insinuates that there is an increase in quality because people can become increasingly good at their little area. However, when you divide the labor up so much that people no longer identify with the finished product - you get serious problems in quality.

The other issue with the so-called economies of scale is that they aren't always true. Sometimes it is more expensive to make something in large batches - this is made apparent by factory farming. On a small farm manure is considered a fertilizer and is a welcome addition to fields. However on a large farm there is no much manure that it is considered hazardous waste and there isn't a decent way to get rid of it. The large amounts of antibiotics (fed to the animals) don't help either - once again this medication isn't necessary on a small farm where animals aren't subject to over crowding and unclean conditions.

I think pollution in general hasn't been considered in the economists' discussion on this debate.

I haven't finished listening to the lecture yet. Perhaps Taylor will get into this aspect more. I'd love to hear an in depth discussion about when economies of scale actually make sense and when they are a detriment due to the increased pollution, decline in product quality, cost of transportation, and general fluctuations of the market (a large facility isn't able to respond to market change very quickly). I think the increased focus on small and local businesses reflects people's growing awareness of these issues but I have yet to hear anyone seriously talk about balancing them.

December 05, 2007


Cheap thrills: Walking home from the hardware store on a snowy day with a shiny new shovel.

December 03, 2007


My word of the week - I actually stumbled across this one being used legitimately

Putrescible: Liable to become putrid.