Aliens Among Us

The regulation of our lives by large organizations is necessary for the functioning of industrial-technological society.  The result is a sense of powerlessness on the part of the average person. Unabomber

Many of our regulations apply to big firms more strongly than small firms, and and even less to homes. For example, many regulations apply only to firms with more than a certain number of employees. Now some regulations have big fixed costs of compliance, which cost more proportionally for small orgs.  But this justification doesn’t really explain that much regulation variation. For example, household hazardous waste rules let homes dispose more easily of many kinds of waste, yet trash disposal isn’t dominated by org-size fixed costs.

When I asked my enviro econ students to explain weaker home trash rules, some said firms care only for profit, while homes care about the environment, so homes don’t need rules to do the right thing. Others said the opposite, that homes rebel more against strict rules, such as by tossing trash in the woods, while firms are more obedient.

Now it seems to me that bigger orgs are in fact easier to monitor and punish, which can justify stricter rules when such rules are harder to enforce. Larger orgs regiment behavior on larger scales, making it easier to predict what one part is doing from what other parts does, and making behaviors visible to more people. For example, if one Walmart throws a certain kind of trash away illegally, its a good bet lots of other Walmarts are doing the same, and lots of employees could expose the practice.

But this is only part of the explanation. Firms obey trash rules in large part because we do random inspections of firm trash, yet would not tolerate random inspections of home trash. Big orgs are favorite movie villians, and people seem to demand higher wages to work for them. It seems we love to hate and distrust big orgs, relative to small orgs and individuals.

And this seems objectively unfair; big firms make it easier for us to monitor and discourage them from bad behavior, yet we reward this help by taxing them more, and imposing more burdens.  Big organizations are the new aliens among us, strange and suspicious to both forager and farmer eyes. We can’t look them in the eyes and feel their warmth of their empathy via ancient human protocols of understanding. Yes humans represent them, but we can see that org needs drive their actions; switch the guy at the top and they do pretty much the same things.  Big orgs display deep beyond-human intelligence we only dimly understand, and potential vast longevity.  So we suspect the worst.

Yet on the whole big orgs are a big reason we are rich and peaceful; our industrial economy depends heavily on their unmatched ability to give us what we want. Even on the uneven field in which we make them play, they keep winning, and giving us more. Pause for a moment to wonder if maybe we haven’t been just a bit unfair to the friendly alien giants among us.