alt Hacker NewsBefore even railroads, the original manufactory boom that is commonly associated with the industrial revolution is the exact kind of case the other poster is alluding to when thinking of large economies of scale. I think Kolko is great to demonstrate that economies of scale aren't infinite, and in the absense of government intervention, market forces actively conspire to ensure firms shrink to their optimal size. But that also proves the flip side: firms will grow to their optimal size too. There is no economic reason to be suspicious of large firm sizes, and the political reasons inevitably hinge on some sort of mistaken assumption of the economics of the matter; anti-trust regulations advocacy is a perfect example of this.
Kolko talks about that in the context of scaling social/charitable solutions.[1] There's a cite to Marshall, who talks about it in an industrial context.[2] But Marshall wrote in the days before computers and the Internet. There was a time when big companies had enormous clerical plants and corporate headquarters operations. Some paperwork and management operations scale O(N log N) or even O(N^2). At some point, corporate overhead became too large.
But we got past that. Walmart, Amazon, Samsung, McDonalds, Starbucks, Foxconn, and BYD all have hundreds of thousands, or even millions, of employees, but don't seem to be hitting scaling limits. There may be an optimal size limit, but it's above planetary scale now. Computers have made this possible.
This leads to monopoly or oligopoly being reached before any natural limit to growth appears.
[1] https://www.jonkolko.com/writing/notes/13
[2] https://www.ebsco.com/research-starters/economics/economies-...