This would be pretty effective at keeping businesses from getting too big, but I think the main goal of antitrust policy should be anti-anti-competitiveness, not anti-bigness.
From Yglesias:
> I want to draw a distinction here between anti-bigness and antitrust policy because there’s a set of influential figures who’ve been working to muddy the waters here and it’s confusing.
>Antitrust is about competition. If Nike tried to buy Reebok there would be a serious antitrust question about monopolization of the sneaker market. The issue isn’t that the combined Nike/Reebok entity would be “too big” (there are lots of bigger companies than the two of them combined); it’s a specific concern that we want companies to compete with each other rather than merge and raise prices. In theory you could have an anti-competitive cartel between three very mid-sized companies, if they happened to jointly control a market in something obscure like a particular kind of gasket or what have you.
> By contrast, although McDonald’s is a company that’s about as big as Nike in market cap, there’s really no conceivable McDonald’s merger that would raise major antitrust concerns. If McDonald’s merged with Starbucks, the combined entity would be much bigger than NikeReebok, but “restaurants” or even “fast food” would continue to be an extremely competitive market.
You can say that bigness is a useful proxy for anti-competitiveness, but the Yglesias article has lots more on the many large companies that provide more social value than smaller companies. He views bigness as a fairly poor proxy for anti-competitiveness, and would say we'd lose a lot from an anti-bigness tax.
That Matt Yglesias article is good and one I think I somehow hadn’t seen.
I agree with him that big isn’t always bad. As he says, bigness allows the kind of efficiencies that aren’t possible at smaller scales and some things need to be big to even really be possible.
But I don’t think “antitrust is about competition” works too well either, at least not until someone comes up with a way of defining anti-competitive behavior that isn’t as awkwardly subjective as what we have now. And subjectivity gives a concerning about of wiggle room for political bias, particularly when the result of that subjectivity can be something as major as breaking a company up, and the company has huge influence over politically important information.
Maybe this is just a case where we want a different set of rules for information providers to those for widget manufacturers? Or maybe there is a way to make antitrust less subjective that I haven’t seen.
This would be pretty effective at keeping businesses from getting too big, but I think the main goal of antitrust policy should be anti-anti-competitiveness, not anti-bigness.
From Yglesias:
> I want to draw a distinction here between anti-bigness and antitrust policy because there’s a set of influential figures who’ve been working to muddy the waters here and it’s confusing.
>Antitrust is about competition. If Nike tried to buy Reebok there would be a serious antitrust question about monopolization of the sneaker market. The issue isn’t that the combined Nike/Reebok entity would be “too big” (there are lots of bigger companies than the two of them combined); it’s a specific concern that we want companies to compete with each other rather than merge and raise prices. In theory you could have an anti-competitive cartel between three very mid-sized companies, if they happened to jointly control a market in something obscure like a particular kind of gasket or what have you.
> By contrast, although McDonald’s is a company that’s about as big as Nike in market cap, there’s really no conceivable McDonald’s merger that would raise major antitrust concerns. If McDonald’s merged with Starbucks, the combined entity would be much bigger than NikeReebok, but “restaurants” or even “fast food” would continue to be an extremely competitive market.
You can say that bigness is a useful proxy for anti-competitiveness, but the Yglesias article has lots more on the many large companies that provide more social value than smaller companies. He views bigness as a fairly poor proxy for anti-competitiveness, and would say we'd lose a lot from an anti-bigness tax.
https://www.slowboring.com/p/small-business-is-not-the-answer
That Matt Yglesias article is good and one I think I somehow hadn’t seen.
I agree with him that big isn’t always bad. As he says, bigness allows the kind of efficiencies that aren’t possible at smaller scales and some things need to be big to even really be possible.
But I don’t think “antitrust is about competition” works too well either, at least not until someone comes up with a way of defining anti-competitive behavior that isn’t as awkwardly subjective as what we have now. And subjectivity gives a concerning about of wiggle room for political bias, particularly when the result of that subjectivity can be something as major as breaking a company up, and the company has huge influence over politically important information.
Maybe this is just a case where we want a different set of rules for information providers to those for widget manufacturers? Or maybe there is a way to make antitrust less subjective that I haven’t seen.