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Because corporations are generally subject to competitive pressure, those that get so large they can no longer effectively function will go out of business. Gov
by wskinner 5y ago
Because corporations are generally subject to competitive pressure, those that get so large they can no longer effectively function will go out of business. Government entities are in most cases legal monopolies and can continue to exist long after they become ineffective. See https://en.wikipedia.org/wiki/Creative_destruction https://en.wikipedia.org/wiki/Creative_destruction
- JackFr 5y agoSee also https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm https://en.m.wikipedia.org/wiki/The_Nature_of_the_Firm Ronald Coase’s paper from 1937 describing the pressures that lead to the formation of firms and those that constrain its size.
- tshaddox 5y agoUnless of course they become so large that they are able to do thing to relieve themselves of competitive pressure.
- jimkleiber 5y agoExactly. I agree there are more competitive pressures for smaller orgs. Once some get really big, they can still face competitive pressure from smaller upstarts, that has happened many times. They can fold from being too big and not focused enough. They can fold from trying to stitch together too many cultures and have infighting that brings them down. They can also start to buy other smaller orgs to relieve competitive pressure. They can also create lock-in policies to make it very painful for people to leave. They can also spend money on political advertising to play on people's fears that certain individuals or orgs are out to get them. Government can also do this. I guess sometimes I just get confused why people seem to fear one and not both.
- imtringued 5y agoThe VC industry is intentionally overfeeding its startups to obtain monopolies. Returns on investment are so low the most attractive investment is a monopoly.