As a teenager, I was genuinely impressed by communism. The way I saw it, the West could never compete. The USSR offered a centralized and efficient system that could eliminate waste and ensure optimal efficiency. If a scientific problem appeared, the USSR could throw 10, 100 or 1000 scientists at it without having to cajole anyone.
I could not quite understand why the communist countries always appeared to be technologically so backward. Weren’t their coordinated engineers and scientists out-innovating our scientists and engineers?
I was making a reasoning error. I had misunderstood the concept of economy of scale best exemplified by Ford. To me, communism was more or less a massive application of the Fordian approach. It ought to make everything better and cheaper!
The industrial revolution was made possible by economies of scale: it costs far less per car to produce 10,000 cars than to make just one. Bill Gates became the richest man in the world because software offers an optimal economy of scale: it costs the same to produce one copy of Windows or 100 million copies.
Trade and employment can also scale: the transaction costs go down if you sell 10,000 objects a day, or hire 10,000 people a year. Accordingly, people living in cities are typically better off and more productive.
This has lead to the belief that if you regroup more people and you organize them, you get better productivity. I want to stress how different this statement is from the previous observations. We can scale products, services, trade and interaction. Scaling comes from the fact that we need reproduce many copies of the essentially the same object or service. But merely regrouping people only involves scaling in accounting and human ressources: if these are the costs holding you back, you are probably not doing anything important. To get ten people together to have much more than ten times the output is only possible if you are producing an uniform product or service.
Yet, somehow, people conclude that regroup people and getting them to work on a common goal, by itself, will improve productivity. Fred Brooks put a dent in this theory with his Brook’s law:
Adding manpower to a late software project makes it later.
While it is true that almost all my work is collaborative, I consistently found it counterproductive to work in large groups. Of course, as an introvert, this goes against all my instincts. But I also fail to see the productivity gains in practice whereas I do notice the more frequent meetings.
Abramo et al. (2012) looked seriously at this issue and found that you get no more than linear scaling. That is, a group of two researchers will produce twice as much as one researcher. Period. There is no economy of scale when coordinating human brains. Their finding contradicts decades of science policy where we have tried to organize people into larger and better coordinated groups (a concept eerily reminiscent of communism).
We can make an analogy with computers. Your quad-core processor will not run Microsoft Word four times as far. It probably won’t even run it twice as fast. In fact, poorly written software may even run slower when there are more than one core. Coordination is expensive.
The solution is to lessen the need for coordination: have different people work on different things, use smaller teams, and employ fewer managers.