Economies of scale and mental load

One of the fundamental tenets of the free-market industrial capitalism is the economies of scale. The term might sound intimidating, but it is much simpler than it seem. It just states that, under the right circumstances increasing the scale of your operation (e.g. manufacturing more units of your product) carries some economies associated with it (i.e. makes the per-unit cost lower). This is particularly true for costs that are somewhat fix regardless of the size of your company: selling twice as many sport shoes would not require you to have two CEOs, so the fraction of the CEO's salary that goes into the price of each pair shoes goes down by half (it is true that their compensation might rise if the sales double, but that is a different effect).

Surprisingly, this effect does not last forever. If you increase your production far enough your factory will either become stressed (used beyond its capabilities) or you will be forced to build a second facility, setting you costs back up again. Furthermore, if you go even beyond that, to the point where you have ten or a hundred factories, the logistics can become so burdensome that an increase in production does not lead to additional savings. 

Photo: Fabrice Florin

It is remarkable that economies of scale can only happen through quantity, not quality. For instance, setting up a sawmill to produce wooden planks can be costly, but once you are running each additional plank that you produce is cheaper to produce than the previous one: you will need more raw materials and electricity, but the machines and the personnel are "paid for" by all the previous planks that you have already produced. However, if you change to produce longer planks you costs will definitely rise. First of all you will have to set up your production again (adjust the machines, create the labeling and packaging, etc.). Then there is the problem of the raw materials, because a log which is twice as long typically costs more than twice the price of the original one because they are harder to grow and rarer. This is the case for all the "naturally occurring" materials like gemstones, fish, livestock of any kind, but even if we go to manufactured materials like copper wire it is clear that the production of two miles of wire is approximately twice as expensive as the production of one mile of wire, but the increased weight and volume of the reels will make them harder (and thus more costly) to handle.

Today I have come to thing about the economies of scale because a team of colleagues recently delivered one space instrument to the spacecraft team for integration (the so-called Flight Unit) and they were on their way to produce a copy in case something went wrong (the Flight Spare). Of course the savings from the first unit to the second are huge both in time and money: all the engineering is done and the design of the first unit is applied almost literally to the second one, and any component that had a long delivery time has already been ordered months or years ago. Unfortunately, by the time the team gets selected for the construction of an updated and improved version of the instrument, technology will have progressed so much that the new development would only profit to a certain extent from the current one, and will still need a huge effort in its development.

It is tempting to think that all these consideration are good microeconomics, but have little import in our daily life, but we would be wrong. In fact, a house is full of economies of scale starting with something as basic as cooking: it is a well-known fact that many people who live alone do not bother to cook, because it is just too much effort for a single person; for a family of four, on the other hand, the number of cooking utensils to wash stays pretty much the same, preparation time does not vary a lot for many dishes and it can be done for the most part by just one person. Indubitably, if we speak of a huge household, with ten people or more, the economies of scale disappear and suddenly you need a much longer time to cook and possibly two cooks to complete the task in time.

There is another activity where the economies of scale are very important: the coordination of the house. When the kids where young and were more work than help around the house it was clear that any chores were left for us to do, but coordinating was relatively simple among the two of us. However, now that they have grown up the amount of work we do is significantly smaller but the needs for coordination much greater. Even the tasks that assigned to them have to be overseen: they now prepare their own bags whenever they have physical education at school, but they are not 100% reliable, so we still have to keep a mental note to ask them about it, because if they forget one of use will have to drive to school to bring the bag later in the day.

A similar story but in reverse happens with the food in the fridge: when they were young we could confidently hope that a chunk of cheese intended for dinner would not disappear over the course of the day. These days, however, we have to actively warn them not to grab it whenever they happen to pay a visit to the kitchen, because that would mean once more a quick run in the evening to procure a new one or even a complete change of plans.

This combination of following up things that are supposed to happen and tackling everything that could go wrong before it happens is a lot of mental work. In fact this task, which has been assigned overwhelmingly to women in the household, is often called "mental load" and even if it has never received much praise it is not that different the kind of work that a CEO does every day: keeping fresh in their mind the situation of several subsections of the company and making sensible decisions that will impact its future. There is a certain economy of scale in centralizing the decision making, because it reduces significantly the communication needs, but as in the example of the factory, the decision-maker can become overloaded if too much is demanded of them. From this humble blog I would like to praise all the women (and the few men) who struggle every day to keep their families running with the least possible friction. The pandemic and its associated home-office period has given me a great opportunity to take over some of this responsibility from Karen's shoulders and I think she is grateful for it. Have a nice evening.