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You haven't thought about how bizarre this would be. All growth and declines would have to be organic, so rather than the obvious winner just buying the market
by dehrmann 3y ago
You haven't thought about how bizarre this would be. All growth and declines would have to be organic, so rather than the obvious winner just buying the market loser and cutting 20% of staff, the loser would bleed-out over years. Companies also couldn't sell divisions they're not interested in, so rather than finding someone who cares, they'd have to go through the motions to not lose money while letting it slowly die. It'd be a lot of zombie companies.
- jjulius 3y agoI'm not necessarily onboard with what OP was proposing, but as a counterpoint to your hypothetical, what is stopping those losing businesses from simply closing rather than just bleeding out until death? The way this is phrased makes it sound like a company is obligated (required?) to slowly wither and die.
- dehrmann 3y agoThey'll close once they start losing money, but that might be drawn-out, and since you can't sell, the incentive is to draw it out as long as you can.
- jbm 3y agoI don't know if this is something that is prevented by our current system. This is more or less what GM was doing before the 2008 bankruptcy (The vague story I remember from the time was that they knew they had to get rid of money losers like Pontiac and Oldsmobile, but decided dealing w/ the dealerships wasn't worth it)