What do investment management firms do

Please forward this error screen to 31. Please forward this error screen to 207. Or, what do we need corporations for and how does Valve’s management structure fit into today’s corporate world? Can useful lessons be drawn about not only Valve’s inner workings but, importantly, regarding what do investment management firms do future of the corporate world?

Every social order, including that of ants and bees, must allocate its scarce resources between different productive activities and processes, as well as establish patterns of distribution among individuals and groups of output collectively produced. Interestingly, however, there is one last bastion of economic activity that proved remarkably resistant to the triumph of the market: firms, companies and, later, corporations. Think about it: market-societies, or capitalism, are synonymous with firms, companies, corporations. Nevertheless they do so by means of some non-price, more often than not hierarchical, mechanism! Effectively, firms can be seen as oases of planning and command within the vast expanse of the market.

In this context, the management structure that typifies Valve represents an interesting departure from this reality. If I were asked my opinion of what Valve’s symbol should be, I would recommend a depiction of a wheel, like those which every desk at Valve comes equipped with so as to enable us to move about the company at will, to join whichever working group we want, to form new ones spontaneously and without seeking anyone’s permission. It means that Valve operates without a system of command. In other words, it seeks to achieve order not via fiat, command or hierarchy but, instead, spontaneously. Hume’s views influenced one young man in particular: Adam Smith, the economists’ patron saint. Hume and Smith, it was Friedrich von Hayek, the doyen of modern day libertarians, who coined the term. The miracle of the market, according to Hayek, was that it managed to signal to each what activity is best for herself and for society as a whole without first aggregating all the disparate and local pieces of knowledge that lived in the minds and subconscious of each consumer, each designer, each producer.