do you think there should be legislation on company size

lethal0r

do you think the government should pass legislation to stop companies growing to such a size that they "cannot fail"? i.e. if they did fail they would cause such huge problems to the economy that they are bailed out by the government instead.

i am aware of anti-competitive measures such as the ones microsoft has fallen foul of, but dont think there are ones specifically to do with company size. perhaps they would specify a company is allowed no more than a certain % of whichever market they are in.

im not talking about banks specifically but I think this would be a great example of where such legislation would help.

thoughts?

maninthestreet

Businesses would be queuing up to move their business elsewhere if such legislation was passed.

lethal0r

im not sure what you mean. they'd have to go elsewhere anyway if there was such legislation.

bendix

1. No. The government should keep out of it. It's hardly a model of efficiency itself, is it?

2. The premise of your question is misguided. There should be no bail-outs of ANY company. If an apple is rotten, you don't keep watering it. Let it die. Economic Darwinism is the only way.

Pennywise

Impossible to do now. We've let the genie out of the box to free world trade and there's no going back. I'd actually agree that it would have been a good idea for the so-called experts to have foreseen the inevitable problems with global trade and put in some checks & balances before globalisation, but they didn't and it's too late now. It's the same with taxation between countries, tax havens, etc. - we'd never get all countries to agree. Think back to the old nuclear arms debates about unilateral nuclear disarm-ment - it just doesn't work out if only one side does it!

The largest firms have taken over "capitalism" and now it's all fallen apart. No-one in power thought to challenge the "big is best" philosophy because it served them well, until now that is! I am actually quite hopeful for the future because I think it is the end of the "super-sized" firms. But, I don't think it will end because of regulation (which in my opinion never works because the regulators always go after the small easy targets instead of the big fish!), I think it will be simply because people will realise that big isn't best after all and will go back to enjoying the better quality/service etc of the smaller businesses.

Time2Go_25

Pennywise wrote: »

I think it will be simply because people will realise that big isn't best after all and will go back to enjoying the better quality/service etc of the smaller businesses.

The smaller businesses have always been around, in those areas people don't use them much it's down to one thing, price.

I hate going to Tescos, service is rubbish, stores or badly laid out etc, but I go there as I can get everything I need and a lot cheaper than using the local corner shop.

lethal0r

bendix wrote: »

2. The premise of your question is misguided. There should be no bail-outs of ANY company. If an apple is rotten, you don't keep watering it. Let it die. Economic Darwinism is the only way.

There wouldn't need to be bailouts if they weren't huge. Thats my whole point. Right now if a companies big enough, then "should" goes out the window.

yanda

As has already been said, companies would be scrambling to leave at a massive loss of tax revenue. Think if you told companies like BP that they were too big and had to cut staff to get to a certain level? How would you even set a level in the first place?

lethal0r

when I say huge I mean REALLY big companies / banks that have a massive chunk of the market, like microsoft, RBS, some of the other banks. in reality it would apply to hardly anyone.

theres other good reasons too - very large companies can become slow to adapt & very wasteful, for example:

they are so big, different departments dont know what the others are doing so they end up working on different versions of the same product.

very slow to react to changes in the market - so many people to go through to get a decision made.

lethal0r

yanda wrote: »

As has already been said, companies would be scrambling to leave at a massive loss of tax revenue. Think if you told companies like BP that they were too big and had to cut staff to get to a certain level? How would you even set a level in the first place?

they wouldnt cut staff they'd be split into different companies. like what happened to BT & openreach, although that was for anti-competitive reasons.

what do you mean by leave? the country? BT didnt.

Radiantsoul

I am not sure it would work. It would encourage companies not to grow and so would dull their productivity. The outcome would be a loss of companies overseas, a movement abroad of managerial talent and most likely a more obscure company ownership regime.

If you take a look at the big shares of companies 50 or 100 years ago you will find that many companies that are too big to fail do, or get acquired by other companies.

Nobody believes failing companies should be propped up indefinitely. The issue with banks is the large spillover costs of sudden collapse. Many of the banks will be profitable this year and were for many prior years.