In general, but usually on the business side, we hear appeals to 'economies of scale', but back when I was in college, the anti-Walmart crowd was out protesting while advocating for policies that would actually make businesses bigger and damage small businesses. I also saw that old economic equation that's supposed to show you how big the business needs to get: marginal revenue must equal marginal cost.
Well, even back then I could see any government related cost- i.e. taxes, regulation, etc... would feed into the marginal cost side of that equation and result in bigger corporations than would otherwise exist. But it turned out to be even worse than that, as every real world assessment of real businesses show they don't run up against this higher marginal cost.
Thus businesses generally max out their capacity. This does not, however, mean they would just grow. They have whatever real capital goods they have in their particular factory or whatever and they want to maximize that. For really small businesses, sometimes you'll even see people 'maximizing' based on their own lives, which includes a lot of non-business concerns, like spending time with family.
So, if you are at one particular level, and you are thinking about scaling up, you have to think about increasing your real capital goods and/or labor, which would usually mean tying up a lot of assets to build that next factory.
So businesses would generally be smaller than they are now. Scaling up would take time, and in many cases, the people running the business wouldn't even want the bother of scaling up.
But we live in a world of cheap credit and an extremely high ROI on getting cozy with the government. I think this is the real driver for our extremely large corporations. Get large enough to play the lobbying game in D.C., and suddenly you are on a completely different level.
What about the government or non-profit arena? One huge issue is that status seems to be determined by the number of 'professionals' under you. Another is that the jurisdiction you are getting your tax funds from does not necessarily relate to the proper size of the institution you are running.
I first noticed this from some research on schools long ago- I'm pretty sure I blogged about it before, but I can't find it. Anyway, the research suggested a school district should be one school serving 400 students. Meanwhile, many counties in America run multiple schools, often with way more students than 400 in each school.
If the student count is too high, the students won't be able to get the education they need. Additionally, since they are running so many schools, the administrative overhead appears, and here comes all the 'professionals'. A huge chunk of these people don't interact with the students at all, but put more and more regulations on the students and teachers- essentially increasing the problems they are supposedly meant to handle. After all, the equity, diversity, and inclusion 'professional' will need her department to grow. It would be absolutely tragic to the 'professional' if the students started being successful and everyone felt their 'expertise' wasn't needed any more.
From my own experience, I am increasingly sure library systems need to be run in a similar (small) manner. One library, nobody 'above' the director of that library. I am not sure of the max size of a particular site, but one could presume it could be larger than 400 patrons, because they would not show up at the same time, and the patron's use of the library is self-directed.
Since these systems are set up at the county level, I could see what would essentially amount to a logistics department, helping the individual schools and libraries cooperate. This is almost necessary in the library world, especially if you want to interface with other libraries for things like interlibrary loans. But you would have to be very careful to keep it in check. To use a medical analogy- cancers often generate things like new blood vessels around them. The body needs blood vessels- needs nutrients moving around the system, but the cancer is creating blood vessels to take and grow at the expense of the host. In a similar manner, bureaucracy often cleaves itself to logistical systems. They often say things like, 'this is more efficient' or whatever, but you'll see initiatives not relevant to the institution's purpose become more important than the logistics necessary to get the primary purposes done.
Of course, there's also the Dunbar number, which came from anthropological analysis of tribe size. About 150 was (and is) the number of people a person could reasonably expect to know and interact with in a way that would allow a sort of consensus based self-governance. Size has also been researched with regard to democracies, republics, etc... This has all been ignored and we generally see these institutions operating at sizes far larger than is optimal, which usually results in them being easily exploited by those who have power.
I think some of these people must have been progressive (at least as the term was defined at the time) and even today, you'd think some on the left- should they really be concerned with access- would be for regulating the size of these institutions. Of course, the right would like it, because reforming the size would root out a lot of the so-called deep state types. But I suspect it will be ignored because the parasites have become so successful at getting us to argue with each other rather than take note of how they are destroying our institutions and subverting them to their own ends.
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