Paul Graham points out that big company checks on purchasing
usually have costs, such as purchasing checks increase the costs of
purchased items because the vendors have to factor in their costs
of passing the checks.
Such things happen constantly to the biggest organizations of all,
governments. But checks instituted by governments can cause much worse
problems than merely overpaying. Checks instituted by governments can
cripple a country’s whole economy. Up till about 1400, China was richer
and more technologically advanced than Europe. One reason Europe pulled
ahead was that the Chinese government restricted long trading voyages. So
it was left to the Europeans to explore and eventually to dominate the
rest of the world, including China.
I would say western governments (especially the U.S.) subsidizing
petroleum production and not renewable energy is one of the biggest
source of current world economic, political, and military problems.
Of course, lack of checks can also have adverse effects as we’ve
just seen with the fancy derivatives the shadow banking system
sold in a pyramid scheme throughout the world.
It’s like there should be a balance on checks.
Which I suppose is Graham’s point: without taking into account
the costs of checks (and I would argue also the risks of not
having checks), how can you strike such a balance?
Sometimes it’s refreshing to look at other kinds of networks:
The Rhine River, Europe’s most busy waterway, will remain completely
blocked for traffic at least until March 29, after M/V Excelsior lost
31 containers. No diversion is possible for about 200 ships arriving
per day, which have to anchor at the Rhine banks. The financial loss for
the masters, many of which own their inland freighters, is way up in the
millions. Salvage of the 31 lost containers is made difficult by lack of
equipment, there are not enough cranes & diver ships to work on more than
1 or maybe 2 sunk containers at a time. As officialls stated, a crack in
the hull of chartered M/V Excelsior opend during a turn maneuver, being
responsible for the list & loss of the containers.
Container Vessel In Jeopardy,
The Cargo Letter
March 28 2007,
Seen in “Boxing Up the Rhine” by Countryman & McDaniel – The Logistics – Customs Broker Attorneys.
For Internet problems there’s usually at least some way to route around,
replace a server, etc.
Except, of course, for the last mile, provided by the telco and cableco