6 ms·

This is true, I'd go much further than the OP here and say the barrier for merger should be MUCH higher than the barrier for spin-out or split. There's no shor

This is true, I'd go much further than the OP here and say the barrier for merger should be MUCH higher than the barrier for spin-out or split. There's no shortage of obvious problems that can arise from concentration of influence and control over a market. So just try to prevent it. Trade some max efficiency for redundancy + anti-corruption/pro-competition/pro-consumer market forces.

mastermage 14d ago
100% we do not need one company that makes everything hi there Samsung.
- mschuster91 14d ago
  Conglomerates may not be as nimble and agile as single-focus companies, but they are uniquely more resilient to economic shock events, and branches being "unprofitable" for a time can be supported by others. Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.
  - airstrike 13d ago
    Conglomerates aren't a strictly optimal form of organization. They are more resilient, but they are also massively bureaucratic and can lose their focus. They may also be able to exert a disproportionate amount of leverage on vendors and suppliers. I'm not saying infinitely asset-light companies are strictly superior either. I'm saying there's no silver bullet or free lunch here. If you look at it from one layer above, capital markets that enable the continuous recycling of corporate structures into smaller or larger as needed are more resilient than those in which company structures are ossified. Of course not every deal is for the better. But no M&A isn't good either. Speaking as a former Wall St M&A banker.
- kelvinjps10 13d ago
  The other day I was looking up Samsung and they make everything in south Corea, even boats and all kinda of stuff
  - mastermage 9d ago
    AFAIK they also Rent out Apartments
fpoling 14d ago
A progressive tax on the size of the company can do this.
- briandear 14d ago
  Don’t we have enough taxes? Taxes should fund government not be used to force people to do things.
  - Arkhaine_kupo 14d ago
    > Don’t we have enough taxes? Objectively no. For example carbon taxes or other environmental taxes have been proposed by free market advocates since the 70s and never been implemented (from the left you see advocacy for environmentalism but not related to taxation) Also if we had enough taxes, the wealth inequality would not be ramping up to great depression levels and basic necessities like healthcare and housing would not be catastrophically related to bankruptcies in america. If you are a worker, specially one in the upper middle class range of salaries, then yes. You are being over taxed. But that is simply because those below you have nothing to contribute and the system refuses to tax those above you appropriately. You are a local maximum in a system that is not globally efficient, so you have too much tax, the country doesnt
    - heavenlyblue 14d ago
      How's carbon credits not a tax?
  - master-lincoln 14d ago
    > Taxes should fund government not be used to force people to do things. Others think differently: https://en.wikipedia.org/wiki/Steering_tax https://en.wikipedia.org/wiki/Steering_tax
  - apercu 13d ago
    Taxes are disproportionately applied. We have more than enough taxes on working people and not enough on the wealthiest classes.
londons_explore 14d ago
The real benefit of a merged company is that where the two original companies were competing in the same market, it would be illegal for them to collude to set the same prices as eachother. However, when merged, they can do exactly that - which allows them to extract more profits. Rather than denying mergers, I suggest merged companies have an extra sales tax for ever on all goods they sell where they used to be competing - with the size of that tax set by the regulator to estimate the benefit they get.
- Panzer04 14d ago
  Merged companies are more able to compete. Combining duplicate corporate structures let them save on costs, etc. It's not a strictly bad thing - iirc spirit? Airlines? Wanted to merge with someone, got denied, and went bankrupt anyway, depriving people of any competition at all.
  - ungreased0675 13d ago
    Not exactly. Competitors like Breeze and Allegiant filled in some prior Spirit routes. Those are better budget airlines. Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check.
    - saturn8601 13d ago
      Companies that have massive startup costs (Automakers, Airlines) are harder to replace. This is a failure of the system we are in. Seems like the free market cannot properly evaluate value when all the cash is going into nonsense like Bitcoin, NFT and now a lot of the AI. Allegiant is an old Airline that has had a lot of problems. Breeze is new but both are starting super small and are not planning to really cover Spirits extended network anytime soon. The result of Spirit dying is alot of that prior investment in second tier cities/airports is just gone for the forseeable future. The potential value that could have generated will now not come to pass. >Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check. The problem that is occuring in my opinion is that Spirit is a symptom of a greater problem. The "K shaped" economy is not only segregating groups of people into haves and have nots, its extending into regions of the country. Losing major airlines access is the precursor to entire regions declining, and ultimately dying completly. If the AI robot world comes to fruition maybe many humans just have no economic value at all.

mastermage 14d ago

100% we do not need one company that makes everything hi there Samsung.

mschuster91 14d ago
Conglomerates may not be as nimble and agile as single-focus companies, but they are uniquely more resilient to economic shock events, and branches being "unprofitable" for a time can be supported by others. Unfortunately, MBA beancounter/neoliberal extremism aka "throw out everything not the core business" has become the norm... and so, with Covid, Ukraine and Trump's tariff and Iran wars, we got a ton of "single focus" companies that are struggling hard, and with everything deemed "not the core business" including internal IT, cleaning etc. sourced out, many a corporation has become internally enshittified.
- airstrike 13d ago
  Conglomerates aren't a strictly optimal form of organization. They are more resilient, but they are also massively bureaucratic and can lose their focus. They may also be able to exert a disproportionate amount of leverage on vendors and suppliers. I'm not saying infinitely asset-light companies are strictly superior either. I'm saying there's no silver bullet or free lunch here. If you look at it from one layer above, capital markets that enable the continuous recycling of corporate structures into smaller or larger as needed are more resilient than those in which company structures are ossified. Of course not every deal is for the better. But no M&A isn't good either. Speaking as a former Wall St M&A banker.
kelvinjps10 13d ago
The other day I was looking up Samsung and they make everything in south Corea, even boats and all kinda of stuff
- mastermage 9d ago
  AFAIK they also Rent out Apartments

fpoling 14d ago

A progressive tax on the size of the company can do this.

briandear 14d ago
Don’t we have enough taxes? Taxes should fund government not be used to force people to do things.
- Arkhaine_kupo 14d ago
  > Don’t we have enough taxes? Objectively no. For example carbon taxes or other environmental taxes have been proposed by free market advocates since the 70s and never been implemented (from the left you see advocacy for environmentalism but not related to taxation) Also if we had enough taxes, the wealth inequality would not be ramping up to great depression levels and basic necessities like healthcare and housing would not be catastrophically related to bankruptcies in america. If you are a worker, specially one in the upper middle class range of salaries, then yes. You are being over taxed. But that is simply because those below you have nothing to contribute and the system refuses to tax those above you appropriately. You are a local maximum in a system that is not globally efficient, so you have too much tax, the country doesnt
  - heavenlyblue 14d ago
    How's carbon credits not a tax?
- master-lincoln 14d ago
  > Taxes should fund government not be used to force people to do things. Others think differently: https://en.wikipedia.org/wiki/Steering_tax https://en.wikipedia.org/wiki/Steering_tax
- apercu 13d ago
  Taxes are disproportionately applied. We have more than enough taxes on working people and not enough on the wealthiest classes.

londons_explore 14d ago

The real benefit of a merged company is that where the two original companies were competing in the same market, it would be illegal for them to collude to set the same prices as eachother. However, when merged, they can do exactly that - which allows them to extract more profits. Rather than denying mergers, I suggest merged companies have an extra sales tax for ever on all goods they sell where they used to be competing - with the size of that tax set by the regulator to estimate the benefit they get.

Panzer04 14d ago
Merged companies are more able to compete. Combining duplicate corporate structures let them save on costs, etc. It's not a strictly bad thing - iirc spirit? Airlines? Wanted to merge with someone, got denied, and went bankrupt anyway, depriving people of any competition at all.
- ungreased0675 13d ago
  Not exactly. Competitors like Breeze and Allegiant filled in some prior Spirit routes. Those are better budget airlines. Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check.
  - saturn8601 13d ago
    Companies that have massive startup costs (Automakers, Airlines) are harder to replace. This is a failure of the system we are in. Seems like the free market cannot properly evaluate value when all the cash is going into nonsense like Bitcoin, NFT and now a lot of the AI. Allegiant is an old Airline that has had a lot of problems. Breeze is new but both are starting super small and are not planning to really cover Spirits extended network anytime soon. The result of Spirit dying is alot of that prior investment in second tier cities/airports is just gone for the forseeable future. The potential value that could have generated will now not come to pass. >Poorly run companies are supposed to go bankrupt, that’s the feedback loop keeping management in check. The problem that is occuring in my opinion is that Spirit is a symptom of a greater problem. The "K shaped" economy is not only segregating groups of people into haves and have nots, its extending into regions of the country. Losing major airlines access is the precursor to entire regions declining, and ultimately dying completly. If the AI robot world comes to fruition maybe many humans just have no economic value at all.