There’s a plausible case that capitalism per se isn’t the problem. Concentration is: Variations range from “too big to fail” to good old-fashioned monopoly. It’s painfully obvious that the acquisition of one monster telecom or bank or airline by another does neither their customers nor the economy as a whole any good. It’s tough to write anti-monopoly law, because how do you quantify market power? However, you can quantify size. So let’s use that as a club to bash away at the problem.
Specifically: Pick a number X, and pass legislation decreeing that no company can have more than X full-time-equivalent employees.
How big is X? · Let’s look at some data:
The numbers aren’t perfect, mostly sourced from Wikipedia, rounded down to the nearest 10K above around 30K. Some people say Samsung has over 500K. The Tesla number is after acquiring Grohmann and SolarCity in late 2016.
I’m going to say X is maybe around twenty thousand. Every single one of those companies that’s 20K+ could, I think, be broken up into saner, sounder, smaller chunks that would be decent, profitable, high-quality businesses.
I guess maybe you couldn’t have a telecom that owned a national network and also had kiosks in every mall. Or an Internet giant that did email and operating systems and cloud. Or a bank that operated branches in every town of a vast nation. Or an automotive company that sold a full line of personal, recreational, and business vehicles on seven continents. All these things seem OK to me.
The picture would be weirdly different: A successful young company approaching size X would have to make painful choices about which business it really wanted to be in, and walk away from the rest. This doesn’t sound terrible.
You could still grow financially if you could figure out a force multiplier for the abilities and energies of your employees. This doesn’t sound terrible.
Companies could still be extremely powerful; look at Facebook. But I still think that, broadly, smaller companies are less so. And further, it’s very likely that this marketplace has a lot more competition than we see currently.
Enforcement · We fortunate citizens of the developed world live under the rule of laws not men, but an unfortunate corollary is that businesses will game the rules right up to the edge and beyond. So the rules would have to be pretty well cinched down.
There’s no distinction between employees and contractors; the number of workday hours you pay people to work can’t exceed 8 times X.
It’s not distinct employees, it’s how many are working on any given day.
If any company owns more than 5% of the equity of another, directly or indirectly, they are considered a single company for the purposes of this legislation.
If any company derives more than 25% of its revenue from another company, likewise.
If any legal entity owns more than 5% of the equity of more than one company, likewise.
Punishment · Laws are always violated, and it’s crystal-clear that certain sectors of the business community see fines and other forms of financial penalty as just another cost of doing business.
So I propose a system where there is only one penalty. Should a corporation be convicted of exceeding size X, its chief executive and Board of Directors at the time the violation started to occur, and any successors, would be subject to imprisonment until the illegal condition is corrected. So simple!
This idea is completely crazy and could never happen! · Overton Window. First they laugh at you. Etc…