Kevin Carson wrote:
> I would argue that the rise of transnational corporations is a "bad thing"
> because they are products of state capitalism. Giant corporations, from the
> late 19th century on, have been statist institutions, and the plutocrats
> associated with them have been rent-seekers. Do away with state capitalist
> subsidies, legal privilege, and other forms of intervention in the free
> market, and the giant corporations would cease to exist, for the most part.
Frankly, this strikes me as quite unlikely. There are lots of big
government policies that encourage firms to be smaller than they would
be in a free market. Double taxation of corporate income is the most
obvious. Antitrust laws tend to be used against large market leaders.
A lot of regulations only kick in if you have more than 50 or 100
employees.
And once you are talking multinational corporations, there are other
government policies discouraging cross-national integration.
Protectionism, most obviously, tends to preserve the firms in each
nation that aren't efficient enough to compete with the world's market
leaders.
You're right that there are some government policies pushing in the
other way (any time regulations impose a fixed cost, firms' minimum
efficient scale mathematically shifts to the right), but on balance I
think you're wrong. Under laissez-faire, big corporations would be
bigger than they are now. But to quote Seinfeld, "Not that there's
anything wrong with that."
--
Prof. Bryan Caplan
Department of Economics George Mason University
http://www.bcaplan.com [EMAIL PROTECTED]
"He wrote a letter, but did not post it because he felt that no one
would have understood what he wanted to say, and besides it was not
necessary that anyone but himself should understand it."
Leo Tolstoy, *The Cossacks*
