Good point. Even if a large state functioned better (for efficiency reasons or whatever), there would likely be a tradeoff with trust. By necessity the rulers of a large state will be further removed from the average person.
That seems to be the case with companies, at least.
Exactly. This is how I have attempted to explain my issues with the functionality of states to people that have no moral issues with the monopoly on violence. What many capitalists and social conservatives fail to recognize is that large companies often suffer from many of the same issues with government bodies. The primary difference though is companies don't have a money printer and will fail unless they are to big to fail. Ala banks and airlines to name two.
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The socialist calculation problem applies to firms' internal operations in exactly the same way it applies to governments. The difference, as you say, is the external profit and loss signals that most companies face.
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Bingo. I never can remember the names of these things.
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