I think you will find reading Hayek and Coase to be rewarding.
Hayek introduced the idea that no one individual planner can make flawless plans because the information to do so is widely dispersed; instead success or failure in the market gives rapid feedback about how to allocate resources. Indeed the market is a discovery process that unearths this information in a way that a planner never could[1].
Coase asked the question: if this is so, how do large firms emerge? He identified the cost of transactions to be the key. The higher the transaction costs, the higher the cost of loosely coupled economies. The size of the firm is thus based on the relative costs of transactions (searching, identifying, validating, negotiating etc) vs the inevitable waste caused by planning.
In essence, large companies are islands of command economics in the sea of the market.
[1] In a related argument, Mises said that even if a planner could know all the variables the resulting problem would simply be too large to solve rationally.
Hayek introduced the idea that no one individual planner can make flawless plans because the information to do so is widely dispersed; instead success or failure in the market gives rapid feedback about how to allocate resources. Indeed the market is a discovery process that unearths this information in a way that a planner never could[1].
Coase asked the question: if this is so, how do large firms emerge? He identified the cost of transactions to be the key. The higher the transaction costs, the higher the cost of loosely coupled economies. The size of the firm is thus based on the relative costs of transactions (searching, identifying, validating, negotiating etc) vs the inevitable waste caused by planning.
In essence, large companies are islands of command economics in the sea of the market.
[1] In a related argument, Mises said that even if a planner could know all the variables the resulting problem would simply be too large to solve rationally.