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Size should not matter. Just don't step in and bail them when they break under their own weight. Of course, when companies are large enough, shareholder's inte
by crististm 6y ago
Size should not matter. Just don't step in and bail them when they break under their own weight.
Of course, when companies are large enough, shareholder's interests spin off into the regulator's domain, allowing interesting turn of events in the form of bailouts
- nicoburns 6y ago> Just don't step in and bail them when they break under their own weight But there's a significant economic cost to society when large companies fail catastrophically like this. Which is why size matters. Large companies mean putting all of our economic eggs in one basket, which is exactly what systems like capitalism are supposed to avoid.
- CRConrad 6y agoThere is also significant cost to society when large companies don't fail, just from their dominant position. Monopoly (and monopsony) is arguably a market failure, and oligopoly or other near-monopoly thus at least a serious market distortion.
- crististm 6y agoThere is a cost to society either way. Reviving a corrupted entity to allow it to continue must have a cost that needs to be weight against the perceived loss of its benefits.
- nicoburns 6y agoYes, anything in economics is a tradeoff. But IMO preventing companies from getting so big in the first place is by far the lesser evil in this case.