> we wouldn't have any technology bigger than could be built by lifestyle businesses. Anyone who wanted to build a lifestyle business on the Internet, for example, would find that there was no Internet.
I think you're wrong, for two reasons.
First, this same argument used to be used to explain why long-distance telephone service is a natural monopoly — because if two people are using different long-distance phone carriers, then they wouldn't be able to talk to each other! And it's really true, in some cases. There are still developed countries where you can't send an SMS from one mobile carrier to another in the same city. But it's also obviously false in general.
Second, more generally, any relationship that is structured as a coworker relationship within a firm could also, in theory, be structured as a commercial transaction between individuals. http://en.wikipedia.org/wiki/The_Nature_of_the_Firm is a Nobel-winning piece of work about why that doesn't happen; it introduced the idea of "transaction costs". But it might turn out that transaction costs can be reduced to a low enough level that services that formerly required big businesses to provide them could be provided by "lifestyle businesses".
I think you're wrong, for two reasons.
First, this same argument used to be used to explain why long-distance telephone service is a natural monopoly — because if two people are using different long-distance phone carriers, then they wouldn't be able to talk to each other! And it's really true, in some cases. There are still developed countries where you can't send an SMS from one mobile carrier to another in the same city. But it's also obviously false in general.
Second, more generally, any relationship that is structured as a coworker relationship within a firm could also, in theory, be structured as a commercial transaction between individuals. http://en.wikipedia.org/wiki/The_Nature_of_the_Firm is a Nobel-winning piece of work about why that doesn't happen; it introduced the idea of "transaction costs". But it might turn out that transaction costs can be reduced to a low enough level that services that formerly required big businesses to provide them could be provided by "lifestyle businesses".