I think this whole thread may be at least partly a misunderstanding.
The way I see it, the discussion began by saying that any team (but in context, referring to a whole company) that grows past a certain size needs a traditional hierarchical system of layers of management to function. Then, someone said that a team/company should just not grow past 4-8 people, and thus you avoid the need of hierarchical management.
My point is that this idea makes no sense. A company can't function as a composite of hundreds or thousands of sled organizing small teams without any management to coordinate them.
My understanding is that you claimed that such a thing is possible, and that in fact it is how the free market and thus the economy of most nations actually functions, without any hierarchy.
I was then rebutting this by showing that the economy does form hierarchies (with large buyers essentially viewing small sellers as subordinates, not independent market actors, when they're not outright buying them).
So, I would argue, the economy is not generally organized as a bunch of independent small orgs, but as a series of huge conglomerates that either own their suppliers, or at least dictate market terms for some period with contracts. The idea of a free market where buyers and sellers meet and negotiate prices based on supply and demand is largely a myth, with some limited exceptions.
As such, the hierarchy in how Linux is built is in line with my original idea: not supply and demand based, but instead organized in a relatively rigid hierarchy.
In support of why I'm claiming that this system of hierarchies arises due to efficiency, I gave the example of how much it costs a company to buy a piece they need versus how much it costs them to produce it internally. This is meant to show that a supply&demand based self-organizing market (the flat, many small teams without managers model) is less efficient than an integrated supply chain (the top-down hierarchical model, with layers of management).