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Too Much ‘Efficiency’: Why Things Break Down

On the hidden costs of eliminating slack, and why the drive for maximum efficiency makes economies more fragile

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Institute of Economic Affairs
Sep 12, 2026
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Dr Stephen Davies is a Senior Education Fellow at the Institute of Economic Affairs.

For economists, efficiency, like productivity, is one of the truly and purely good things. In fact, it would seem that this is something you can’t have too much of. One of the goals of economic policy recommendations, perhaps the central goal, is to maximise efficiency, …

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