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Megan McArdle

In-N-Out Doesn't Want to Be McDonald's

Not everything scales up well.
Keep dreaming, East Coasters.
Keep dreaming, East Coasters.

Yesterday, I discussed efficiency wages and why they are not a strategy that an entire industry, or the entire low-wage labor market, can follow. Which brings me to the point I wanted to make today: Not everything scales up well.

We are the heirs of the Industrial Revolution, and, of course, the Industrial Revolution was all about economies of scale. Its efficiencies and advances were made possible by banding people together in larger and larger amalgamations, and we invented all sorts of institutions -- from corporations to municipal governments -- to do just that.