3 ms·

This is a fascinating concept! On one hand it would keep companies from completely vertically integrating or expanding to encompass many verticals. Which would

This is a fascinating concept! On one hand it would keep companies from completely vertically integrating or expanding to encompass many verticals. Which would stimulate the economy in one way because more people would be exposed to the profits at the top or near the top of the market. Also the increased competition might result in the improvement of various small aspects of technology that would result in better efficiencies across the whole. But on the other hand, limiting the size of companies would make us less competitive on a global scale because of the inherent cost in being forced to buy components, as opposed to vertically integrating. Also product costs may increase, which could negate any increases in wealth among the people.

godelski 7y ago
This is a super complicated topic and I'm not sure it could practically be done. Vertical and lateral integration usually result in huge cost savings. It also reduces complexity. But this is also a feature that monopolies (or monopoly like companies) exploit. I don't think it would be competitive enough if all players weren't playing by this rule. Competition is good, but so is size (think like Bell Labs [0] and how much Google can do). This is all completely a guess though. But monopolies aren't inherently had, they just usually are because they exploit that power to hinder innovation. Monopolies can actually have huge benefits. [0] Bell Labs was an agreement that Bell could have the monopoly (to reduce wiring and because of the network effect that they could take advantage of to connect the US with telephone lines) but there was also heavy regulation done during this deal that I'm sure others here are much more informed about and can correct/add to my comment with. [^] I don't think there's ever been a "free market" nor do I think there ever could be. The US's largest economic growth happened in a "free market" in name only (propaganda a lot for the Russians) but was heavily regulated.

godelski 7y ago

This is a super complicated topic and I'm not sure it could practically be done. Vertical and lateral integration usually result in huge cost savings. It also reduces complexity. But this is also a feature that monopolies (or monopoly like companies) exploit. I don't think it would be competitive enough if all players weren't playing by this rule. Competition is good, but so is size (think like Bell Labs [0] and how much Google can do). This is all completely a guess though. But monopolies aren't inherently had, they just usually are because they exploit that power to hinder innovation. Monopolies can actually have huge benefits. [0] Bell Labs was an agreement that Bell could have the monopoly (to reduce wiring and because of the network effect that they could take advantage of to connect the US with telephone lines) but there was also heavy regulation done during this deal that I'm sure others here are much more informed about and can correct/add to my comment with. [^] I don't think there's ever been a "free market" nor do I think there ever could be. The US's largest economic growth happened in a "free market" in name only (propaganda a lot for the Russians) but was heavily regulated.