When you work in an “efficient” modern corporation, you can get the sense that it spend an awful lot of time and money doing things other than whatever the corporation is in business to actually do. This is brilliantly satirized in The Office, where people working in “Corporate” enjoy a higher social status than the people actually handling and selling the office supplies. Anyway, this article first surveys the work of James Burnham, Ronald Coase, and Peter Drucker who all argued that as industries and businesses became more complex, the transaction costs associated with informal operations expanded to the point where professional management coordinating all those moving parts became cheaper. Another way to look at it is that managers gather information centrally and then disseminate it to all the parts of an organization that need to operate in a decentralized manner (which I am referring to “doing what the corporation actually does”, as opposed to “business” being the function of a business.) Now, enter AI:

AI is beginning to automate the very coordination function that justified management in the first place.

Research, writing, software development, legal drafting, customer support, scheduling, project management, and marketing increasingly become services that can be summoned on demand rather than coordinated through multiple managerial layers.

I more or less agree with this, but I think there is a lot of friction and it will take a lot of time. All the things above involve a…lot…of…talking between human beings within the organization and between humans beings in the organization and their customers and contractors. Because language is just not that good a way for us to communicate what we really mean with each other, and a lot of times we don’t even know what we mean until we spend a lot of time thinking and talking and writing it out, bouncing it off each other, and refining it over and over again. AI can speed up all the parts of loop in between these parts, and it can put more information at our fingertips as we are going through this process, but it won’t be able to break this bottleneck in a lot of industries. AI may eventually get this and learn to work with us in a more human – less logical, less literal – but we are not there yet.