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I tend to not agree with this line of thinking. This may be the case when you subject a company to financial market pressures by listing it on the stock exchang

I tend to not agree with this line of thinking. This may be the case when you subject a company to financial market pressures by listing it on the stock exchange, but I don't think it's a natural imperative. Many companies do just fine without growing to enormous proportions, being acquired, acquiring others etc.

zepto 7y ago
It has nothing to do with stock exchanges. There have been plenty of giant growth oriented corporations that are private. How do you account for that?
- leto_ii 7y ago
  Well, there's nothing to say that private corporations can't behave in the same way. I'm just saying that once you list these pressures are almost guaranteed to appear. I also strongly suspect that they're less present, on average, in unlisted companies.
  - zepto 7y ago
    Sure - but how does that matter? It only takes a few percent to be this way to create the ultra-competitive aggregating behavior we see in practice.
TremendousJudge 7y ago
Nations don't just aggregate like free market corporations. If there are many large bellicose empires in history, it's because taking things by force of arms is a successful strategy. In a world of many micro states, it only takes one to begin expanding aggressively for everything to fall apart
shadowgovt 7y ago
In a world of low-friction exchange of information and goods, small firms are competing with every large firm that can touch their market. What you're describing (companies doing just fine without growing to enormous proportions) is the status quo until a Wal-Mart rolls into their market, in which case they tend to be consumed by the mega-firm that leverages economies of scale (and occasionally monopoly) to drive prices down. A free market, lacking counter-pressure to maximizing firm size, favors large firms, and large firms becoming larger is a positive feedback loop. Note that this is an idealized model and there's plenty of room for counter-pressure in reality (can the large firm actually pull demand away from the smaller firm, or does the smaller firm have a leg-up in e.g. customer relations that the larger firm can't compete with?).

zepto 7y ago

It has nothing to do with stock exchanges. There have been plenty of giant growth oriented corporations that are private. How do you account for that?

leto_ii 7y ago
Well, there's nothing to say that private corporations can't behave in the same way. I'm just saying that once you list these pressures are almost guaranteed to appear. I also strongly suspect that they're less present, on average, in unlisted companies.
- zepto 7y ago
  Sure - but how does that matter? It only takes a few percent to be this way to create the ultra-competitive aggregating behavior we see in practice.

TremendousJudge 7y ago

Nations don't just aggregate like free market corporations. If there are many large bellicose empires in history, it's because taking things by force of arms is a successful strategy. In a world of many micro states, it only takes one to begin expanding aggressively for everything to fall apart

shadowgovt 7y ago

In a world of low-friction exchange of information and goods, small firms are competing with every large firm that can touch their market. What you're describing (companies doing just fine without growing to enormous proportions) is the status quo until a Wal-Mart rolls into their market, in which case they tend to be consumed by the mega-firm that leverages economies of scale (and occasionally monopoly) to drive prices down. A free market, lacking counter-pressure to maximizing firm size, favors large firms, and large firms becoming larger is a positive feedback loop. Note that this is an idealized model and there's plenty of room for counter-pressure in reality (can the large firm actually pull demand away from the smaller firm, or does the smaller firm have a leg-up in e.g. customer relations that the larger firm can't compete with?).