alt Hacker NewsWhat he's missing is that scaling started working around 1900, when railroads started consolidating. Railroads were the first businesses that had overwhelming economies of scale. No small co-op could possibly compete. Over the next century, more obstacles to scaling were overcome. Container shipping, freeways, cheap communications, mass market products and advertising, and computers removed the obstacles to scaling businesses up to planetary size.
Why it's the Uneeda biscuit made the trouble, Uneeda Uneeda, put the crackers in a package, in a package, the Uneeda buscuit in an airtight sanitary package, made the cracker barrel obsolete, obsolete Obsolete! Obsolete!
Cracker barrel went out the window with the mail pouch, cut plug, chawin by the stove. Changed the approach of a traveling salesman, made it pretty hard.
Gone, gone Gone with the hogshead, cask, and demijohn, Gone with the sugar barrel, pickle barrel, milk pan Gone with the tub and the pail and the tierce. - The Music Man
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Oops I forgot to respond to the other things you mentioned. That list of removed obstacles is technically correct, but it misses that those things were mostly subsidized
1. Regarding transportation, the interstate highway system and the containerization infrastructure (ports, dredging, naval security) were massive state subsidies to long-distance distribution. If Walmart had to pay the full property tax and maintenance cost of every mile of road their trucks used, their economies of scale would evaporate instantly. The state artificially lowered the cost of long distance shipping below the cost of local production. That isn't efficiency, but the taxpayer subsidizing the inefficiency of moving a toothbrush 3,000 miles. (Carson called these "diseconomies of scale")
2. The Uneeda Biscuit era of mass production created a crisis in that high fixed costs meant factories had to run 24/7 to be profitable, they couldn't wait for orders but had to force product onto the market. This required the state to intervene again via imperialism and arguably the creation of a consumer culture to absorb the surplus in the form of advertising and other means.
3. Computers are the most ironic part; Computers and CNC tools actually destroyed the rationale for the large factory, made it possible for a garage shop to produce with the same precision as a General Motors plant ("Homebrew Industrial Revolution" book by Kevin Carson again which in my mind is not one of his most defensible but it's still interesting).
I would argue that IP was the main reason that small shops didn't take over. As physical capital costs dropped, the state ramped up IP laws (patents/copyrights) to protect corporate hierarchies from the decentralization computers should have caused. I think that Big Tech isn't Big because of hardware efficiency but because of the state-enforced monopoly on information
I'm so glad that you mentioned railroads because there is a great book, Railroads and Regulation by Gabriel Kolko about the capitalist anti-competiton regulation of the railroad industry that caused their concentration. If you wanna read about it, an essay about it is called "Big Business and the Rise of American Statism" inside of Markets Not Capitalism (freely available online). I'll summarize what it says tho:
Every time big railroad magnates tried to form a cartel to fix prices, a smaller competitor would lower rates and steal all the customers; freight rates went wayy down in this time period. The big railroad owners (like JP Morgan's clients) lobbied for the ICC not to regulate them, but to regulate their competitors. They wanted the government to make price-cutting illegal (calling it rebates or discrimination).
Regarding sanitary packages, the essay _also addresses this_: the big Chicago meatpackers supported regulations because the compliance costs were so high they drove small local butchers and slaughterhouses out of business. The "sanitary" laws were a weapon to kill local competition, not a way to keep food safe