Question

Most observers agree that centrally planned economies fail because it is impossible for bureaucrats in large government hierarchies to coordinate different sectors of an economy as efficiently as market mechanisms do. Many diversified firms, however, are as large as some economies and use private sector hierarchies to coordinate diverse business activities in a firm. Why would you consider these large, private sector hierarchies somehow different from the government hierarchies of centrally planned economies?



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  • CreatedMay 08, 2015
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