"So, that's it? "Public utilities"?"

Public utilities are an extreme example, certainyl not the only sector where this happens.

"(Why not competitive bus companies? Is that somehow impossible? Would it really cost "billions"?)"

It would definitely be very expensive to set this up (you'd probably need your own busstops and you'd get a complicated ticket system, people hate it when they have to wait for the bus from the "right" company before they can hop on). As always, if the owners of the existing company represent less than 50% of the world's capital than you can in theory set up a second company but who would pour all his money into a project that might be slightly profitable 20 years from now? Why risk not breaking even within your lifetime when there are enormously profitable oligarchies to invest in?

"(I am intentionally disregarding the "undercut and destroy their capital" argument becausecan you show me even one time that ever happened?"

Walmart and the professional sports leagues in the US. The government of Ireland maintains ownership of the railways because research has shown the island is too small for even two profitable railway companies. The Chinese government has decided to employ this technique to break American and European solar companies. Many sectors in the world now only have 2 or 3 big players left (often from different countries), especially if you discount state owned companies, and they are routinely fined for price fixing (the EU catches a couple of them every year) and often the reason they haven't merged yet is because national laws forbid it. Also, iamgine what happens when actual laws of physics protect the monopoly or oligarchy, for example in the domain of radio frequencies (if you own the whole range no one else can transmit radio, gsm, wi-fi, etc...) or if some company owns all 15 mines of some rare Earth metal (competitors would be forced to obtain the metal from the much more expensive process of recycling, this could last for centuries depending on how full the mines are).

"That must be an amazing level of capital, to fend off more efficient competitors forever"

Maybe not forever, but if it lasts 100 years the damage has been done, especially if the new player just ends up becoming a 100 year monopolist themselves. The trick is that these big players are more attractive to investors to begin with. Investors aren't in it to for the good of humanity: if they can make things a lot better for themselves by making things a little worse for everyone else they'll take that opportunity (similar to the tragedy of the commons). I know American libertarians like to think they're smarter than the rest of the world combined but it's getting annoying, I guess that's backlash of decades of cold war era US propaganda against anything that even reeked of socialism (even though most of NATO was and is socialist by US right wing standards). Libertarian thinking about monopolies and oligarchies is not hindered by such practical details as people not willing to move to India for slightly cheaper groceries, and human lifespan being finite, that's why it's so out of touch with the real world.

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Mr. Diamond: That's... nice? I mean, I agree, you can't get an ought from an is, sure.

But what does that have to do with libertarian "morality" (and how it's allegedly jaundiced)?

Did I even make a moral argument, rather than a practical one? (I mean, I could easily do so, but I was trying to stick to the practical "this isn't actually a problem" one.)

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So, that's it? "Public utilities"?

Good! At least we've given up on the idea that it's mere "age of firm" or "Being big" that somehow anti-competes and requires a Special Extra Tax to "fix".

(Why not competitive bus companies? Is that somehow impossible? Would it really cost "billions"?)

(I am intentionally disregarding the "undercut and destroy their capital" argument because can you show me even one time that ever happened?

That must be an amazing level of capital, to fend off more efficient competitors forever; and of course eating your capital to undercut competition makes you comparatively unprofitable: capital is how you make profits!

Which I thought was the entire alleged point of monopoly, to reap alleged extra profits?

Likewise "eternal monopoly" - because the only way to approach that is to monopolize the entire economy, but if you get even close to that you're undercut by the socialist calculation problem.

"This is Econ 101", to which I reply "Econ 101 needs to read the Austrians", because "eternal monopoly because too much capital" doesn't actually work.

Never has. Not even once.)

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Or wait for a deflationary currency like bitcoin to take over the world. Corporations would exist only until the initial arbitrage that required the creation of the firm is still valid, like the earliest corporations created for sea voyages. Voyage over, corporation disbands.

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Is this another example of our pretending to oppose dominance by big powers, but really accept it?

Framing it as a tax on longevity seems "unfair." But if you said "tax breaks for new firms"—well, don't they exist already?

[I think some commenters miss the point when they point out that old firms already are taxed more (on average)--say, by higher taxes based on other express criteria. The point, as I take it, is that longevity-related tax breaks aren't express.]

Edit. I don't think the argument that old firms will try to make themselves into new firms is very persuasive: the war between evasion and enforcement is a constant feature of tax law, and company age is relatively simple.

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It's better than penalizing age. The precise rates would determine how heavy economies of scale would be affected and it employment has nothing to do with: large corporations aren't the only ones that can hire people. If there is a demand for a certain product or service smaller businesses will meet that demand and hire people to do it.

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Libertarians have their own jaundiced conception of "morality," and that does all the work. Any argument that starts from "morality" is invalid. ( http://tinyurl.com/7dcbt7y )

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Try becoming a new player in public transportation or water distribution in a large city. Unless you have the funds to build a new transportation/distribution system you don't stand a chance. The billions it would cost to build such a new system are a much larger hurdle than any permit in the known universe.

In general large businesses in even the freest of markets destroy newcomers by temporarily undercutting their prices until the newcomers starting capital runs out, this subsequently discourages investors from investing in newcomers in that market.

In theory a large enough megacorporation could achieve an eternal monopoly if it is larger than any other united group of investors.

This is Econ 101 or 102 (depending on how honest your teacher is about real world businesses).

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I don't think that's related to the kind of youth Hanson means.

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But no doubt the state of Delaware would be thrilled by such new taxes.

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So, penalize size?

Incentive to not hire more people? Check.

Incentive against any possible economies of scale? Check.

Incentive to prevent larger capital investments [on the reasonable assumption that capital investment possibilities are roughly correlated to size]? Check.

I can't imagine how anything could go wrong with that. (See Spain.)

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Talk is cheap.

Show me the dominance and tell me why it's morally relevant without State-imposed barriers.

Otherwise I'll just reply "Anti-libertarian propaganda" with equal validity.

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P.S. corporations should be neutered. They are given too many rights and too few duties in most countries, in *some* countries they literally buy politics.

If a corporation dumps chemicals or kills kids the CEO should go to jail, if a corporation fails and is saved by the state the shareholders should be forced to pitch in, if a corporation owns a daughter corporation it should not be able to legally distantiate itself from the actions of that daughter, a corporation should not be allowed to give "donate" to politicians or political parties, a corporation should not have the power to decide over the private lives of employees, corporations should not be allowed to transfer profit and loss to other countries, corporations should not be allowed to negotiate their tax rates, corporations that avoid billions in taxes should and/or bribe politicians should be treated as the threat to national security that they are (intelligence and security agencies should be allowed to infiltrate them).

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"Many have suggested that we subsidize firm research, though it still seems puzzling that we don’t do more of this. Yes it can be hard to measure research spending, but that probably isn’t the whole issue."

If it's not then it's at least a very big part of the problem: businesses are creative enough to label Malaysian children painting shoes with a new type of paint as "design R&D" or the CEO's bonus as an "essential R&D-related expense".

In the real world most innovation is done by universities, often paid for by a contract with a business, but still, it's the universitiy researchers who do most of the work (and get the smallest financial reward), so why should a government not just cut the middleman out of the picture?

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Yeah, businesses would just change names every couple of years which is why it's better to tax businesses based on size. It's the big businesses that hinder innovation, exert levels of power rivaling that of elected governments, create the "too big too fail/jail" problem, undermine tax systems and shield people from criminal charges (the business just gets a pitiful fine)

All that is if you want to tax businesses at all, personally I prefer this tax to be abolished and the dividend/capital gains taxes to be increased to the level of the income tax (globally of course, tax havens should be dealt with as if they were sponsoring Al-Qaeda).

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Why would new ones have to be built? The physical buildings are still there, they can just be taken over by a nother business.

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