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A state that incurs high welfare costs when a company fails has an interest in reducing the number of failing companies. One way to do that is to require new c
by metageek 16y ago
A state that incurs high welfare costs when a company fails has an interest in reducing the number of failing companies. One way to do that is to require new companies to have capital, hire qualified employees, etc.
(No, I'm not taking a position on whether that's a good idea. I am not an economist, and I try not to play one on the Net.)
- njs12345 16y agoThat is true, but one can certainly envisage such measures harming the state in the long run - increased bureaucracy might prevent some companies from starting which would succeed and therefore deprive the state of tax revenue. One Google would cover the costs of a lot of failed startups :) (Not really an economist either, although I do have a little training in the area..)