Volvo’s Kalmar revisited


After reading Jensen and Meckling (1994), carefully analyze again the Volvo case.


Only a brief comment on the “conservative” overtone of the J&M paper on REMMs. The paper could be more general and it could be used to support different kinds of policy. The authors’ way of making very clear their policy position may be obscuring the generality of the model. This way of presenting it is, probably, ineffective. The usual way of doing it is just the opposite: stressing the generality and disguising the implicit policy consequences. Sociological and psychological arguments are frequently stated this way. What is meant by “conservative” or “progressive” thinking and policy nowadays? Are we prone to confuse defense of the welfare state with the defense of welfare state bureaucrats? Please ask yourself why we use simplifying labels such as conservative, liberal, socialist, etc. Might it be just an economic way of allocating thinking resources? Or is it a way of avoiding constant revision of our mental framework? Cognitive dissonance may be involved here. This unwillingness to change our mental framework is similar to our resistance to introduce radical restructuring when writing papers or books: as authors we usually have difficulties convincing ourselves of the need to do this. We prefer to introduce marginal, incremental changes.

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