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Hmm, Many corps, government, humans etc. aim to become bigger and global. So, there is no easy way to keep them local, small and diverse. And once they grow big

Hmm, Many corps, government, humans etc. aim to become bigger and global. So, there is no easy way to keep them local, small and diverse. And once they grow big most of them turns blind eye on small local companies just like how amazon is doing now. This is a problem that will prevail forever and can't be solved easily. We can experience today too in china the government do crackdown but most of us hate it right? If they don't regulate they grow beyond party. (Taking example of china because I don't know other country which does crackdown on big giants like this)

nicoburns 5y ago
Not easily, I agree, but it could be done. For example, there could be higher taxation rates for larger companies.
- ixnus 5y ago
  I wonder how this would work, considering higher tax rates hurt the profitability of a company.
  - 0KnowledgeGoof 5y ago
    Sure, but do we want to optimize for creating trillion-dollar companies? They can hardly even find ways to spend their fortunes; we could tax quite a bit from them before anyone except accountants notices. And that money could be used for social good.
- adventured 5y ago
  The interesting thing about big tech in that regard, is a 50% income tax rate wouldn't be enough to stop them. Big tech piles up large amounts of cash as it is and they have no idea what to do with it (other than shovel it back to shareholders). They have far beyond the margins they need to keep expanding, even with a 50% income tax. So the first thing it would do is cut into shareholder returns (less cash), their multiples would contract as investors would find them less appealing. Half of America is invested in big tech (in one form or another), and those are by far the most active voters. If they see their portfolios tank due to a huge hike in corporate income taxes, they'll promptly punish the politician/s that are responsible for it. Big tech would keep growing at 50%, so what's the alternative? 70%-80%? It's unlikely to ever have the support required to get it passed, it just plain sounds very egregious as a policy. At very high levels it comes across as: we like to punish success; and that's how it would be run against politically by the other side (Republicans).
  - mgaunard 5y ago
    50% income tax is the standard upper echelon tax rate for individuals in the developed world.
  - oauea 5y ago
    It's always interesting how people view taxation as punishment, as if the money just disappears into a black hole instead of being used for bettering the lives of everyone in the country. America could easily fund universal health care, which would be a massive boost to quality of life, if they taxed bigtech a bit more. Instead you have Americans refusing to go to the doctor because they're afraid of the bill.
    - smus 5y ago
      The us government already could fund universal health care and chooses not too. People in the US are wary about taxation because we already have a comparable tax rate to other developed nations, with more prosperity, and yet we get comparatively far fewer public goods in return. It's a raw deal. Where's our high speed rail, our public transit, our health care, our public bathrooms? Why is that money going to Raytheon instead?
      - lotsofpulp 5y ago
        Could it? > https://www.thebalance.com/u-s-federal-budget-breakdown-3305789 https://www.thebalance.com/u-s-federal-budget-breakdown-3305... Total Revenue is $4T, Total Spending is $6T, and > Social Security will be the biggest expense, budgeted at $1.196 trillion. It's followed by Medicare at $766 billion and Medicaid at $571 billion. That is $1.35T spent on healthcare just for old people (over 65) and poor people. And it is not even the whole amount, since most 65+ people still have to buy insurance. Even if you cut out the 5% profit margins of managed care organizations, or even 15% assuming their function is wholly unnecessary, it still seems unlikely universal health can be offered without increasing tax revenues. In 2019, total healthcare spend for all of US was $3.9T. https://www.cms.gov/files/document/highlights.pdf https://www.cms.gov/files/document/highlights.pdf
Retric 5y ago
You can largely achieve this by barring companies from managing or owning even pieces of other companies directly or indirectly and taxing based on number of employees. Add a scaling tax on assets including IP and it becomes very hard to have Walmart sized mega corporations. It’s a more interesting question to ask if this would be more economically efficient.
- zo1 5y ago
  I'd like to just see them distribute their actual profits instead of being allowed to "hoard" it. That would also go a long way in fixing the stock markets supposed "growth by any means" criticism. I'd argue that the hoarded profits are one of the main drivers of all these acquisitions that reduce competition and lead to consolidation.
- clairity 5y ago
  > "It’s a more interesting question to ask if this would be more economically efficient." it's almost self-evident that it would be more efficient. the more interesting questions are how and why. fair and efficient markets at steady-state would largely be composed of a few medium-sized companies and a bunch of small companies, with new entrants occasionally. that would enable healthy competition that would drive progress while keeping chaotic upheavals mostly at bay. it would also distribute wealth more widely, which means we'd get more diverse ingenuity and more interesting entrepreneurship, rather than having the capable simply stowing away at large companies taking their safe and boring little toll on the income river.
  - Retric 5y ago
    I don’t think it’s clear because economies of scale do exist. Honda can simply spend more on R&D than a company 1/10th it’s size. Large companies definitely have their own issues, but there isn’t some clear maximum size where companies universally become less efficient at say 1,000 employees. It’s more a question of management overhead and flexibility etc.
    - clairity 5y ago
Ginden 5y ago
> So, there is no easy way to keep them local, small and diverse I was lately thinking about some kind legislative action against network effects. Let's make it easy to migrate to other platforms. Obvious way to do this is to require big companies to implement "data export" feature with specification.
- Sebb767 5y ago
  The GDPR pretty much requires that already. You need to be able to export your data and another service must be able to parse them automatically, if reasonably possible.
- jandrewrogers 5y ago
  This has limited utility in practice because the data models reflect the underlying implementation and architectural details, particularly in the kinds of scalable systems big companies have. Specific tradeoffs are made in data models that reflect the tools available to the designer that might not apply to your environment. Moving data models between two systems that were not designed together can create a several order of magnitude difference in performance, cost, etc in using that data model. It is a common problem for data model migration, even outside the context of the big tech companies. I've had cases where the systems were effectively not replicable even though the data was made available because the source system relied on some bespoke piece of data infrastructure software that no one else was likely to replicate. (Even hypothetically open sourcing this infrastructure isn't that helpful because it is usually extremely specific to the operational environment for which it was designed -- you can't drop it into your operational environment.) All of which adds so much asymmetric friction and cost, which the source provider does not incur, that merely making data models exportable tends to generate limited user value in data models that inherently encode network effects.

nicoburns 5y ago

Not easily, I agree, but it could be done. For example, there could be higher taxation rates for larger companies.

ixnus 5y ago
I wonder how this would work, considering higher tax rates hurt the profitability of a company.
- 0KnowledgeGoof 5y ago
  Sure, but do we want to optimize for creating trillion-dollar companies? They can hardly even find ways to spend their fortunes; we could tax quite a bit from them before anyone except accountants notices. And that money could be used for social good.
adventured 5y ago
The interesting thing about big tech in that regard, is a 50% income tax rate wouldn't be enough to stop them. Big tech piles up large amounts of cash as it is and they have no idea what to do with it (other than shovel it back to shareholders). They have far beyond the margins they need to keep expanding, even with a 50% income tax. So the first thing it would do is cut into shareholder returns (less cash), their multiples would contract as investors would find them less appealing. Half of America is invested in big tech (in one form or another), and those are by far the most active voters. If they see their portfolios tank due to a huge hike in corporate income taxes, they'll promptly punish the politician/s that are responsible for it. Big tech would keep growing at 50%, so what's the alternative? 70%-80%? It's unlikely to ever have the support required to get it passed, it just plain sounds very egregious as a policy. At very high levels it comes across as: we like to punish success; and that's how it would be run against politically by the other side (Republicans).
- mgaunard 5y ago
  50% income tax is the standard upper echelon tax rate for individuals in the developed world.
- oauea 5y ago
  It's always interesting how people view taxation as punishment, as if the money just disappears into a black hole instead of being used for bettering the lives of everyone in the country. America could easily fund universal health care, which would be a massive boost to quality of life, if they taxed bigtech a bit more. Instead you have Americans refusing to go to the doctor because they're afraid of the bill.
  - smus 5y ago
    The us government already could fund universal health care and chooses not too. People in the US are wary about taxation because we already have a comparable tax rate to other developed nations, with more prosperity, and yet we get comparatively far fewer public goods in return. It's a raw deal. Where's our high speed rail, our public transit, our health care, our public bathrooms? Why is that money going to Raytheon instead?
    - lotsofpulp 5y ago
      Could it? > https://www.thebalance.com/u-s-federal-budget-breakdown-3305789 https://www.thebalance.com/u-s-federal-budget-breakdown-3305... Total Revenue is $4T, Total Spending is $6T, and > Social Security will be the biggest expense, budgeted at $1.196 trillion. It's followed by Medicare at $766 billion and Medicaid at $571 billion. That is $1.35T spent on healthcare just for old people (over 65) and poor people. And it is not even the whole amount, since most 65+ people still have to buy insurance. Even if you cut out the 5% profit margins of managed care organizations, or even 15% assuming their function is wholly unnecessary, it still seems unlikely universal health can be offered without increasing tax revenues. In 2019, total healthcare spend for all of US was $3.9T. https://www.cms.gov/files/document/highlights.pdf https://www.cms.gov/files/document/highlights.pdf

Retric 5y ago

You can largely achieve this by barring companies from managing or owning even pieces of other companies directly or indirectly and taxing based on number of employees. Add a scaling tax on assets including IP and it becomes very hard to have Walmart sized mega corporations. It’s a more interesting question to ask if this would be more economically efficient.

zo1 5y ago
I'd like to just see them distribute their actual profits instead of being allowed to "hoard" it. That would also go a long way in fixing the stock markets supposed "growth by any means" criticism. I'd argue that the hoarded profits are one of the main drivers of all these acquisitions that reduce competition and lead to consolidation.
clairity 5y ago
> "It’s a more interesting question to ask if this would be more economically efficient." it's almost self-evident that it would be more efficient. the more interesting questions are how and why. fair and efficient markets at steady-state would largely be composed of a few medium-sized companies and a bunch of small companies, with new entrants occasionally. that would enable healthy competition that would drive progress while keeping chaotic upheavals mostly at bay. it would also distribute wealth more widely, which means we'd get more diverse ingenuity and more interesting entrepreneurship, rather than having the capable simply stowing away at large companies taking their safe and boring little toll on the income river.
- Retric 5y ago
  I don’t think it’s clear because economies of scale do exist. Honda can simply spend more on R&D than a company 1/10th it’s size. Large companies definitely have their own issues, but there isn’t some clear maximum size where companies universally become less efficient at say 1,000 employees. It’s more a question of management overhead and flexibility etc.
  - clairity 5y ago

Ginden 5y ago

> So, there is no easy way to keep them local, small and diverse I was lately thinking about some kind legislative action against network effects. Let's make it easy to migrate to other platforms. Obvious way to do this is to require big companies to implement "data export" feature with specification.

Sebb767 5y ago
The GDPR pretty much requires that already. You need to be able to export your data and another service must be able to parse them automatically, if reasonably possible.
jandrewrogers 5y ago
This has limited utility in practice because the data models reflect the underlying implementation and architectural details, particularly in the kinds of scalable systems big companies have. Specific tradeoffs are made in data models that reflect the tools available to the designer that might not apply to your environment. Moving data models between two systems that were not designed together can create a several order of magnitude difference in performance, cost, etc in using that data model. It is a common problem for data model migration, even outside the context of the big tech companies. I've had cases where the systems were effectively not replicable even though the data was made available because the source system relied on some bespoke piece of data infrastructure software that no one else was likely to replicate. (Even hypothetically open sourcing this infrastructure isn't that helpful because it is usually extremely specific to the operational environment for which it was designed -- you can't drop it into your operational environment.) All of which adds so much asymmetric friction and cost, which the source provider does not incur, that merely making data models exportable tends to generate limited user value in data models that inherently encode network effects.