Wealth Through Decentralization
by Gary North
The main reason why I have been able to make a lot of money, as well as crank out 50 volumes of books and so many articles that I cannot count them, is that no one told me to do it.
Simple, isn’t it? It’s called laissez-faire: let us alone.
One of the best presentations I have ever seen on applying this principle in organizations is here.
One of the reasons why the commercial real estate market is not going to recover to its 2007 heights is because companies that refuse to honor this principle are not growing or hiring, while companies that do honor it are growing and hiring. When the principle of laissez-faire is honored, the size of headquarters shrinks. Thus, the demand for existing commercial real estate shrinks.
The principle of laissez faire is a free market principle. My first five full-time jobs were with organizations run by free market advocates. All five men understood how to apply this libertarian principle.
So, why don’t most large organizations adopt this principle? If it’s profitable, the free market should adopt it. First, because the free market is not allowed to operate. Second, because people who get to the top of today’s institutional pyramids want power more than money. They sacrifice profitability for personal power. They think that centralized power is more productive. They refuse to imitate profitable firms that are more decentralized.
This provides opportunities for smaller organizations whose owners and managers are more interested in output than control. Admittedly, there are not many of these people, but this is to their advantage . . . and yours, if you work for one of them.
APPLYING PARETO’S LAW