T Nation

Corporate Size


#1

I am by no means a economic expert but I was thinking the other day what would happen if we limited corporate size? I know this will truly never happen but what economic implications would there be?

We have a estate tax to prevent individuals from becoming to wealthy but nothing really regulates corporation except the fact they can't have a monoply. When corporations get to big apparently they can't fail or the US economy will fail as we seen with automotive manufactuers and banks. So what happens if we limit the size by say number of employees, marketshare, or some other limiting factor? I'm all about free market but when is company getting more than it's fair share?

I can see a few postive things coming out of it.

Less sway in government policy.
More middle class jobs.
More competition equals lower prices.
More product selection.

Bored at work thought I'd share my thoughts.


#2

Take an econ class or two and report back. Ideology only goes so far.


#3

Consider that economies of scale are what allows for low prices - think Walmart. Also , many business models ONLY function with huge scale - think insurance.


#4

Also, legislation regulating lobbyist power is the rabbit you should be chasing given your concerns, not limitations on successful products or service as determined by a free publics spending power.


#5

How exactly do you define corporate size? The employees, money they make? An Ideal company has maximum profit per employee so lets say they were not too large in size but made HUGE profits, do you tell them they can't make over X dollars per year so they need to slow down their products/services or just lower prices? What about a company that isn't making huge profits but employes a large amount of people, do you tell them they can't hire anyone else because they have too many employees?


#6

Ah, the old 'fair share' argument. I wish someone would tell me what a fair share is considered, and how that is determined.


#7

Seriously, I'm going to punch the next person in the face who thinks there is such thing as a "fair share."


#8

The fact you ask that shows me that you are not really all about the free market


#9

I do not think a single gov't can actually limit transnational corporations.

Check how well the WTO is in stopping US gov't and companies from doing anything


#10

There is a saying that if you work at Walmart all you can afford is Walmart. Huge companies like Walmart keep their prices low by selling cheap inferior imported good, paying employees the bare minimum, and bullying suppliers. They are driving companies out of business who try and do the right thing. Places like Costco, Safeway, and Albertsons who actually pay their employees a livable wage.

Insurance originated on a small scale to protect cargo. Insurance can function at a smaller scale then it is currently at.


#11

This is my point exactly. When do corporations get to become so powerful and influencial that governmental institutions can't control them?


#12

What size? Well, I am pretty sure many have passed it. When did it happen? A while ago. Consider chemical/petroleum/agrochemical corporations over the past several decades. Some where in there.

Wal-Mart used to just sell American made goods in the mid-80s


#13

So you support socialism then? Is this a bait job?


#14

I know exactly how much a "fair share" is. In fact, I'm asking everyone to send me their money and I promise I will dole it out "fairly" - scout's honor.

And, of course, a small fee for myself for managing "fairness" for everyone.