The Inefficiency of Some Efficiency Comparisons: A Reply to Nye

John Nye (1990) feels that one of my two brief specific references to his (1987) work “leaves the impression that my work downplays the problems of individual differences in taste or social institutions by dismissing them out of hand†(Nye, 1990, p. 148). Let me assure him that he is unduly alarmed, since virtually all readers will read into the passage that he quotes only what I intended and, indeed, what Nye himself intended - that if he or anyone else had found evidence that firm size mattered for productivity, this would be taken as evidence of inefficiency. This is especially clear because in the previous paragraph I (selectively, I suppose) took note of Nye's own review of the extensive literature that argues that “less productive and, therefore, ‘inefficient’ family firms led to French ‘backwardness’ in production†(Saraydar, 1989, p. 55).