It's interesting to read how tech people talk about industry in novel ways, but a lot of this material is well studied.
A) The word 'centralization' is consistently misapplied by the tech crowd, in almost all cases, the term is 'monopoly' (or oligarchy or monopsony) and these are well understood and studied concepts in economics.
B) The term 'Economies of Scale' is what he's inadvertently alluding to, but he's missing where most of the advantage of it comes from. Yes 'redundancy' is one artifact, but there are two bigger issues 1) specialization and 2) market power. When you're really big, you can start to afford to hire people to do things that competitors cannot, that might give you a big advantage. Most of real R&D falls into this category. So many applied 'AI' things are coming out of R&D divisions of big companies. 'Market Power' is a more abstract concept, but when you're large, you can make much stronger demands. Mondelez, P&G are big enough that they can plow through many competitors with all sorts of tactics: they get better prices and displays in-store, they have much bigger marketing budgets, they can sell at a loss in one corner to stifle a competitor, they can lean on buyers and distributors (i.e. buy them and you don't get our product) etc..You can think of Mondelez and P&G as 'owning' production and distribution. Apple is a 'Monopsony' for certain parts, and it has incredible leverage over it's supply chain and reaps most of the surplus profits from innovation in those supplying it.
C) Many firms simply do not benefit from economies of scale i.e. roofers, carpenters, most kinds of law etc. but most do, however, the US has relatively speaking, much more people employed in 'big companies' that not - and that's what makes it rich. In fact this is a defining feature of 'Rich Europe' aka Germany, UK, Netherlands vs. 'Less Rich Europe' aka Poland, Spain: 'Rich Europe' has many more people in mid to larger companies. In many industries, you have to be at a certain scale to compete effectively.
We generally don't like monopoly because the investors will tend to sit on an industry and extract rent as opposed to doing anything risky and actively block others from participating.
I am not sure whom you mean, when you talk about "tech people”, but just in case you’re not aware: The author of the blog post is Robin Hanson, an associate professor of economics.
A) The word 'centralization' is consistently misapplied by the tech crowd, in almost all cases, the term is 'monopoly' (or oligarchy or monopsony) and these are well understood and studied concepts in economics.
B) The term 'Economies of Scale' is what he's inadvertently alluding to, but he's missing where most of the advantage of it comes from. Yes 'redundancy' is one artifact, but there are two bigger issues 1) specialization and 2) market power. When you're really big, you can start to afford to hire people to do things that competitors cannot, that might give you a big advantage. Most of real R&D falls into this category. So many applied 'AI' things are coming out of R&D divisions of big companies. 'Market Power' is a more abstract concept, but when you're large, you can make much stronger demands. Mondelez, P&G are big enough that they can plow through many competitors with all sorts of tactics: they get better prices and displays in-store, they have much bigger marketing budgets, they can sell at a loss in one corner to stifle a competitor, they can lean on buyers and distributors (i.e. buy them and you don't get our product) etc..You can think of Mondelez and P&G as 'owning' production and distribution. Apple is a 'Monopsony' for certain parts, and it has incredible leverage over it's supply chain and reaps most of the surplus profits from innovation in those supplying it.
C) Many firms simply do not benefit from economies of scale i.e. roofers, carpenters, most kinds of law etc. but most do, however, the US has relatively speaking, much more people employed in 'big companies' that not - and that's what makes it rich. In fact this is a defining feature of 'Rich Europe' aka Germany, UK, Netherlands vs. 'Less Rich Europe' aka Poland, Spain: 'Rich Europe' has many more people in mid to larger companies. In many industries, you have to be at a certain scale to compete effectively.
We generally don't like monopoly because the investors will tend to sit on an industry and extract rent as opposed to doing anything risky and actively block others from participating.