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Published online by Cambridge University Press: 05 June 2012
If there is any sort of “discretionary power” left to individuals restricting outcomes, we must either give up Pareto optimality or acyclicity.
Aldrich (1977: 16)If every individual had complete and perfect information about the effects of alternative outcomes on his or her own well-being, the problem facing society would simply be that of aggregating the differences among individuals. But social decisions also serve the purpose of combining the judgments of individuals, each of whom may have only incomplete and faulty information about the effects of an alternative on his or her own well-being.
Despite the technical advantages of dictatorship as a means of aggregating conflicting individual preferences, dictatorship may do very poorly when the problem is one of making collective judgments about difficult problems. Machiavelli understood that even an absolute prince has to get accurate information and advice from others; hence, the prince has to avoid “flatterers,” or advisers we would call “yes men”: “There is no other way of guarding oneself from flatterers except letting men understand that to tell you the truth does not offend you” (1513/1952: 33).
The simple fact is that no one person can know enough to program the behavior of all the other members of the firm as if they were robots. As a result, the expertise of specialists becomes a political resource within the firm, one that inevitably results in a dispersion of political power within the organization.
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