Checks and Balances

Under communism, Ukrainian firms were run along autocratic lines. An individual director might be good or bad, plodding or inspired, but what he said was law for the firm. Firms in America or Europe are, in contrast, coalitions, prducts of the 18th century political theory of checks and balances that underlies the American Constitution. Standing behind the inspired inventor is an accountant asking what it will cost, a marketing director asking how pple will be persuaded to buy it. These are frustrating voices for the creative thinker or investor to hear and its sometimes tempting to think that the modern society would be better off without them. Inventors and entrepreneurs can often be seen on television bemoaning the pettifogging constraints of bankers, accountants and bureaucrats who prevented them from taking their creativity to truly great heights. They deserve as much skeptism as the politicians who bemoan the constraints placed on them by advisors, bureucrats and voters. A look at the mess made in the factory in Kiev in enough to dispel this fantasy

- Excerpts from The Company of Strangers - A natural history of economic life
by Paul Seabright