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USA: a mostly planned economy?

I don't mean the government, I mean firms. Lots of people have pointed out that firms are like little command economies, but let's look at the scale. The US is near the bottom of the OECD in self-employment and small business employment (at least in manufacturing and computing sectors) and going down in self-employment with time, with 7.2% of workers being self-employed, vs. over 30% for Greece, Mexico, or South Korea. 11% of manufacturing is done by firms with less than 20 employees, vs. 35% in Greece. 32% of computer services are in firms of less than 100 employees, vs. 73% in Italy.

So most Americans not only work for bosses, they probably work for bosses who have bosses, some variation on "assistant manager" or "middle manager". Most people do not sell goods or services directly in competitive markets, they seek out and form long term exclusive relationships where they get paid a fixed salary or wage in return for taking commands. There's market activity *between* firms, but overall, most economic activity is happening within large firms, via boss-employee relationships. If you believe the US economy is a sterling example, you should believe that market activity is best minimized, or at least sequestered to particular niches. Overall we're a market economy the way we're a democracy, infrequently and indirectly.

It's worth noting that the countries highest in self-employment and small business manufacturing are the poor cousins of the developed world, while powerhouses like Germany and Japan are also fairly low (though Japan's higher in small manufacturing.) So maybe there is in fact something to this, that large degrees of planning and command economy are more efficient than relentless market competition. Though for the USA there's also that working for a large employer has been the only reliable way to get decent health insurance, and you've been gambling on your health and solvency by going it alone.

I note that in my semi-extended family, one niece started her own business, and I think one sister is being a therapist on her own. I did a bit of consulting work in the tail of dot-com boom. Otherwise, we've all worked for businesses, universities, or government.

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Damien Sullivan
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