Pallavi Mahajan, B, Q 30 - Will Computers Really Decentralize the Economy?

INTRODUCTION
It is an assumption of the experts that future advances in computer technology will further decentralise the economies. But this is not true everytime.
Whereas Decentralise economy means people do not have to leave their homes to work in an industry. Moreover, decentralization increases the possibility of saving labour, because people can earn their livelihood while simultaneously taking care of their household responsibilities.
World is divided into :
 Centralisisng force
 Decentralising force
 Cut both ways
 Has no effect
It is observed that in 1975, computers were centralised, but after 1975, computers became decentralized and cheap.

DISCUSSION
Corporations are organised around factors like economies of scale and have ability to afford and operate computers. It doesn’t means computer technology has been the only casual factor of organization, only that it has been one factor, which will decrease in importance.

eg: New York Times has a unique position as they distribute newspaper in America. Small companies can’t compete with them. Reason being the Times has not broke down because it has intangibles like brand image, a huge stable of capable writers and editors, who can turn out their products in such a way that nobody can copy it.

 Cheap computers tends to boil away technology as a source of competitive advantage, raising the relative significance of other factors. As a result, the future shape of any industry with respect to centralization and decentralization, will increasingly depend on this.

Internal management of companies like Wal-Mart having some very expensive MBA’s that running the company. Because applying their decisions to 1,000 stores costs more than applying them to 100, it is efficient to centralize stores under their management. But if cheap robot MBA’s became available, then this would stop them to operate as a centralizing factor..

If McDonald’s can replace its MBA’s with cheap robots, this will weaken the economy of its management, because any competitor of them will be able to get the management of similar type, and therefore be a decentralizing force. But if McDonald’s can replace its hamburger cooks with robots, so that thousands of restaurants can be remotely managed from a single control room at headquarters, it will be centralizing.

CONCLUSION
So what I Think now is

So generally computers centralise the economy because according to my view every organisation urge to have best output and profits and for attaining their goals, they would manage their company’s management in this way that nobody as their competitors can break them down. For this, they hire and place best and expensive management to the company to make a hindrance to their competitors.....

So not really computers decentralize the economy, it centralises the economy if economy is liquidated computers .

References:

Ian Fletcher,"Will Computers Really Decentralize the Economy?",post-autistic economics review,issue no.39, 1 October 2006, article 3, pp. 26-30, http://www.paecon.net/PAEReiew/isuue39/Fletcher39.htm