Antitrust and Monopolies

(Topics: Private Sector | Back to Home)

The word “big” is at the heart of many important questions. How big can one person get? One institution? One company?

Clearly too big is a problem. We all remember the awful reverberations through the economy because there were firms that were “too big to fail.” And we've all encountered bureaucracies that were too big for anyone to care about us.

It's important that individuals be able to work hard and grow their ideas into something larger than themselves. We want there to be artists who can perform for crowds and businesses that can serve countless customers. But at some point, big becomes too big. And that's a reality we need to be aware of every day [1].

We do have some legal mechanisms in place to address this, mainly through the regulation of commerce. We have two key parts of government working in this area: the Federal Trade Commission and the United States Department of Justice Antitrust Division [2]. But the big thing that happens all the time is mergers, and it's not all that clear to most of us if these are a good idea.

Like when Disney bought Fox. Or Viacom bought CBS. Or Charles Schwab bought TD Ameritrade. Or AOL bought Time Warner. Or Exxon bought Mobil. Or Heinz bought Kraft.

You've heard of most of these enormous companies becoming even more enormous. It involves billions upon billions of dollars. And everyday people have the same question: is this something we want to happen?

Competition is a good thing, but only if it is fair and productive. We need to have a national conversation about how big is too big. Because the centralization of power and resources makes it that much harder for anyone else to step up.

How big is too big? Whatever the answer, we need it soon. Because what is big is getting bigger every single day.

[1] One institution that may be too big is the federal government itself. We've had around 2 million employees since the 1950s, so this isn't a new phenomenon. But it's not clear how well the government really works.

[2] Although they aren't all that large. The FTC has about a thousand employees and the Antitrust Division is about half that.

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