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Comment by octoberfranklin | Hacker News Reader

A tax on scale.

Yeah I know HN is going to hate me for saying that.

If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company.

Once "better served" is quantified, you know the coefficient for taxation.

Make no mistake, this coefficient will be a political football, and will be fought over, just like the Fed prime interest rate. But it's a single scalar instead of a whole executive branch department and a hundred kilopages of regulations like we have in the antitrust-enforcement clusterfuck. Which makes it way harder to pull shenanighans.

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> If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company.

Why? That's exactly the circumstances where the mere potential for small companies to pop up is enough to police the big company's behavior. You get lower costs (due to economies of scale) and a very low chance of monopolization. so everyone's happy. In the case of this DRAM/flash price spike, the natural "small" actors are fabs slightly off the leading edge, that will be able to retool their production and supply these devices for a higher profit.

the mere potential for small companies to pop up is enough to police the big company's behavior.

If that were true, "you're in Amazon's kill zone" wouldn't be something VC's say to startups. And yet, they do say that.

And yet, startups exist.

because they stay out of the kill zone

> If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company.

How so? Costs will be higher with multiple small products, resulting in higher costs for customers. That's the opposite of "society is served better".

We draw the line at monopolies, which makes sense.

By the time a company becomes a monopoly, it is immensely powerful - politically and monetarily - getting rid of it or splitting it up is near impossible. Monopoly laws are near impossible to apply as the corporation has sufficient money and influence to turn politicians into servile puppets.

Best to nip corpos before they gain more revenue than a nation state and become "too big to fail".

> > all have identical costs

> Costs will be higher

Read it again, please.

We know large companies have volume efficiency, so it’s not a realistic scenario.

>society is better served by having it produced by the few small companies than the one big company.

well, assuming the scale couldn't be used for the benefit of society and not to milk it dry. but yes probably the best that can have a reasonable chance at success, eventually, maybe.

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