Diseconomies of Scale | Michael Shuman

Key Concepts & Themes:

• Pre-Copernican Economics: The central metaphor for the outdated, pre-Copernican economic models that insist on globalization and scale above all else, despite evidence that localized systems are often more resilient and competitive.
• The "Scale" Fallacy: The conversation challenges the common wisdom that to "scale" a business means to make it as big as possible. Instead, Moose argues for finding the right scale for the right mission.
• Investment Crowdfunding: A revolutionary shift in securities law that now allows everyday people to invest small amounts of money in the local businesses they love, historically a prohibitively expensive process. In just eight years, it has directed $2 billion to 7,000 companies.
• The Service Economy: The observation that modern economies have flipped from being goods-dominant to service-dominant (70% of expenditures). This inherently favors local, relationship-based businesses over distant corporations.
• Comparative Advantage Re-examined: The hosts and Shuman break down David Ricardo's foundational economic theory, pointing out its critical flaws in a world where capital, but not labor, is mobile.
• BIMBY ("Begin In My Backyard"): A positive reframing of the NIMBY concept, suggesting that global change and innovation are most powerful when they start with local action and problem-solving.

Suggested Reading & Listening

• Put Your Money Where Your Life Is – Michael H. Shuman
• The Local Economy Solution – Michael H. Shuman
• The Main Street Journal
• Community Economics at Post Carbon Institute
• Michael Shuman’s Blog