This is really an Old Whig post, but

since the Powers That Be have made it difficult for me to mess with the settings, I think I'll put it here.

An excerpt from James Surowiecki's The Wisdom of Crowds (a great excerpt there as well), ch. 10, section 3:

Let's say that corporations exist because they reduce the cost of getting large numbers of people to act in a coordinated fashion to accomplish particular future goals, and because they make the future (at least a company's small part of it) more predictable. What's interesting about that description, though, is everything it leaves out. It says nothing about the way companies deal with their suppliers and customers (who are essential to accomplishing anything but whom the company can't order around), nothing about how companies should get their employees to act in a coordinated fashion, and, most interestingly, nothing about how the company decides which goals it should pursue and in what fashion it should pursue them. In other words, the fact that corporations exist doesn't tell us anything about the way they really work.

For much of the twentieth century, though, we knew how companies worked. In fact, we assumed that corporations all, in some sense, had to work in the same way, at least if they wanted to be successful. First, a corporation was vertically integrated, which meant that it had full control over most of its supply chain. Few companies went to the extremes that Henry Ford did in insisting that Ford Motor Company own the iron ore and the sand that went into its care\s, but on the whole the assumption was that what a company could do for itself, it should do for itself. Second, a corporation was hierarchical, with many layers of management, each responsible for the one below it. The people at each level of the hierarchy could handle certain problems on their own, but more difficult or complex or consequential problems got handed up the chain to someone more important (and, supposedly, more skilled). And a third, a corporation was centralized. This didn't mean that headquarters controlled everything that a company's divisions did. In fact, the company that set the mold for the twentieth-century corporation, General Motors, prided itself on its decentralized structure, since each division--Buick, Chevrolet, Cadillac--was run on a day-to-day basis much like an independent business. But all of the big decisions that shaped GM's strategy or its internal organization were made at GM headquarters. More to the point, perhaps, in the old-model corporation final decision-making power was concentrated in the hands of a very few people, and often in the hands of one person: the CEO.

Paradoxically, even as American companies became more hierarchical, more centralized, and more rigid, they paid increasing lip service to the idea that top-down organizations were oppressive and damaging. In fact, the idea that worker "empowerment" is a key to a healthy company, which became something of a managerial conceit during the 1990s, has been a perennial favorite of management gurus for almost a hundred years. In the second decade of the twentieth century, for instance, a number of major corporations established profit-sharing plans and gave their workers voting rights in the company. In the 1930s, the so-called human relations movement, led by the sociologist Elton Mayo, purported to have proved that workers were happier and more productive when they felt that their concerns were being listened to by management. (In retrospect, Mayo's studies now seem to prove that the workers were happier and more productive when they were getting paid more by management.) And in the 1950s, which today is thought of as the heyday of the old-line, bureaucratic corporation, companies were positively obsessed with teamwork and committee meetings. William H. Whyte's classic critique of middle-class conformity, The Organization Man, was driven, in no small part, by his frustration with the emphasis on the value of groups. For Whyte, companies were entirely too infatuated with the virtues of the people in the middle of the pyramid and not respectful enough of the men at the top. As he put it, "It is not the leaders of industry that are idealized...but the lieutenants."

Although they were rhetorically committed to the virtues of collective decision making, most American corporations were not especially interested in turning rhetoric into reality and did not try to do so. Collective decision making was too often confused with the quest for a consensus. This was, in particular, Whyte's bete noire, and justifiably so. You don not seed a consensus in order, for instance, to tap into the wisdom of a crowd, and the search for consensus encourages tepid, lowest-common-denominator solutions which offend no one rather than exciting everyone. Instead of fostering the fee exchange of conflicting views, consensus-driven groups--especially when the members are familiar with each other--tend to trade in the familiar and squelch provocative debate. If, as the saying goes, a camel is a horse produced by a committee, it was undoubtedly made by a committee looking for consensus.

I push the limits of fair use here in an effort to promote the thinking Mr. Surowiecki has put into this book, and to show that this thinking is a potential unifier of left and right throughout the world.

If his goal is merely to make a buck for himself in the short term, he will sue my ass off for breach of copyright (not that there is much there to chew on, he wouldn't live more than a month), but if he and his publisher are willing to accept my assistance, the world will be a more prosperous place and we will all be wealthier for his input.

That is my whole goal in life; for everyone to be more prosperous and less envious via the magic of interdependence (aka cooperation). James Surowiecki is a big help in showing the way.