Why is General Electric Breaking Up?
If we’re living in late-stage capitalism, why have big companies like General Electric and Johnson & Johnson recently broken up? Weren’t we supposed to see endless consolidation and corporations that dominate the world?
You might remember Duke University Professor Mike Munger from We Have a Serious Unicorn Problem.
He’s back to explain, among other things, why this late-stage capitalism we keep hearing about is actually a function of government.
That’s not to say consolidation in media, for example, isn’t a problem. Look no further than Multiple Local News Stations Say the Same Thing Verbatim.
But there are free-market forces in our economy that, when left alone, ensure companies don’t grow dominant. With cameo quotes from David Friedman and Ludwig von Mises (below), this video breaks down why monopolies are naturally unstable and why we have shelves full of options for things like coffee.
“Increasing size brings increased cost of administrative bureaucracy. The men at the top get further removed from what is actually going on at the bottom and are therefore more likely to make costly mistakes.”
“Military terms are inappropriate for the description of business operations. It is, e.g., a bad metaphor to speak of the conquest of a market. There is no conquest in the fact that one firm offers better or cheaper products than its competitors.”
-Ludwig von Mises