I'll the economists here amongst us take up the issues involved in Gar's post on a more theoretical level in light of the late Ronald Coase's 1937 paper, "The Nature of the Firm" (http://www3.nccu.edu.tw/~jsfeng/CPEC11.pdf). Coase was basically trying to answer the question of why should firms exists at all within a competitive market economy and why would they bother to do so many things in house. Why not outsource everything?
As it so happens, Coase in that paper quoted extensively from the writings of the Marxist economist Maurice Dobb. One question in the back of Coase's mind was why did the Soviet economy seem to be flourishing back then when orthodox economic theory (which Coase embraced) strongly implied should not be able to happen. Coase realized that the same theory implied that firms, where many things are done in-house rather than outsourced raised some of the same issues too.
Jim Farmelant http://independent.academia.edu/JimFarmelant http://www.linkedin.com/in/jimfarmelant www.foxymath.com Learn or Review Basic Math
-------------------------------------------------- From: "Gar Lipow" <gar.lipow at gmail.com> Sent: Thursday, November 21, 2013 8:52 PM To: "LBO" <lbo-talk at lbo-talk.org> Subject: Re: [lbo-talk] Theory and practice
> A lot of this discussion misses a very simple point - the problem with
> contacting rather than doing stuff in-house. Contracting makes sense for
> very short term projects. But if you have something that need to be done
> over the course of a year or longer (in this case eighteen months) bring
> it
> in - house. There are plenty of good developers out there who will be
> thrilled to get a long term temporary job - especially if comes with
> benefits. The advantage of in-house over out-sourcingz; A firm that
> accepts a contract will, at best, have goal of fulfulling the contract.
> People who work for you will not, at least your management is competent,
> play word games with instructions. They will try to figure out what you
> really are aiming for and do their best to give it to you. I know that on
> occasion contractors will the do the same if they have a really close
> working relationship, and feel that screwing you will cost repeat
> business.
> But most of the time you get better work out of direct hires than through
> a
> contract firm. One of th complaints was how detailed the contracts were.
> But if developers don't work directly for you - if you are paying for
> results rather than time - then you have describe the results that you
> want
> not only clearly but in a way that protects against being mininterpreted
> deliberately by somebody acting in bad faith. Both the worker and the
> employer are better off with old fashioned direct exploitation that with
> indrect exploitation, where the workers are exploited by a third party and
> the employer hires that third party. Even worse with multiple third
> parties. It is enough of a pain installing sometime like a an accounting
> package where you hire a networking company to bring you network up to the
> software vendor's specs and then the software company comes and installs
> the already written (non-custom) accounting package. Watch the finger
> pointing between the two vendors even when it is that simple. Multiple
> vendors with a major custom project is asking for trouble. Yeah projects
> can fail with direct hires too, but the odds of avoiding failure are a lot
> better. And at least communication problems are communication problems,
> without the added fun of bad faith.
>
>
> On Thu, Nov 21, 2013 at 3:59 PM, Michael Smith <mjs at smithbowen.net> wrote:
>
>> On Thu, 21 Nov 2013 18:12:21 -0500
>> shag carpet bomb <shag at cleandraws.com> wrote:
>>
>> > Also? The project used agile, not waterfall. The culture of DC
>> > contracting companies and in the healthcare space in particular, is
>> > agile.
>>
>> I am so glad to hear that. Agile is the stupidest, nastiest
>> cult since the Hare Krishnas.
>>
>> I work in an 'agile' shop these days, and it's Hatlo's Inferno:
>> a Taylorized nightmare where the developer gets punished for
>> not being a mind-reader. I could go on and on, but I'll spare
>> you.
>>
>> It produces crummy code, too. All written to fool the unit tests.
>>
>>
>>
>> --
>> mjs at smithbowen.net
>> http://stopmebeforeivoteagain.org
>>
>> The reciprocal civility of authors is one
>> of the most risible scenes in the farce
>> of life. -- Sam J
>> ___________________________________
>> http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
>>
>
>
>
> --
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