“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."
Tuesday, September 16, 2008
Too Big to Fail, How About Too Big?
For the past thirty years consolidation, mergers and market share have all focused on putting too much power in too few hands. How important would AIG be if it was one of fifty peers? What economic advantage is there in having ten major banks controlling the US market if these banks when they get in trouble cause so much collateral damage?
The Soviet Union, at its demise, had one factory building color televisions. The trust busters of Teddy Roosevelt's time had it right. Smaller is better, whether it is broadcasting, automobile manufacturing, banking or insurance. The playing field should be leveled and slightly titled towards regional, and non-oligopoly corporate structure.