I'm curious what the justification for this is. It seems like the kneejerk reaction toward any big/powerful entity (eg. "break up the tech companies!").
Well we do need more Teddy Roosevelts that threaten anti-trust. FDR was also from wealth and took on wealth in a way that made the most secure and trusted investable market for investors and workers ever and has lasted almost a century [1].
Microsoft, even the threat of one in the 90s led to Google, Apple, Amazon, Mozilla, etc to rise. Microsoft is also better for it.
However I don't think any company should be broken up until they start to abuse a monopoly or become a single point of failure for economic disasters or national security issue.
For instance right now banks and ISPs need to be broken up.
Clearly 'too big to fail' banks are a national security issue and lend to massive value extraction events and recessions as they gain.
Also, the local monopolies of ISPs have led to rent-seeking and less innovation.
Competition is a key of capitalism and fair markets. If you do not have competition you have stagnation and monopolies make progression and innovation lazy.
Here's a great quick point by Steve Jobs about product stagnation and the managers/business side [2] and how they can run amok if not controlled to allow value creation to continue, and how monopolies or problems that arise when only the business/managers are in charge.
Essentially when monopolies/oligopolies happen they stagnate and the product/engineer/creates lose power to the business/management side, value creation is killed for value extraction and stagnation happens always, it is basically a law of the universe at this point.
The alternative is to keep sticking it to the bottom, the lower/middle and the worker in consumer economies, the service in a service economy, the small business R&D absorbing failures and proving successes for large businesses, the long investors that are 'suckers' to investment banks, and the overall quality of life we all enjoy. Or you can take some from the top and incentivize them helping to make sure recessions are rare.
[1] https://rooseveltinstitute.org/how-fdr-took-forces-wealth-an...
I'm not too convinced whether a breakup would accomplish that. Smaller banks are less capitalized, and therefore be less able to absorb shocks than big banks. You can see that almost all the banks on the failed banks list[1] are small local banks (although this might also be because bank sizes follow a power distribution, it would be interesting if there was a bank failure rate that accounted for market cap). Also, what's preventing all the banks from engaging in the same risky behavior and all requiring a bail-out? If the government won't let AIG fail, would it let AIG01,AIG02,...,AIG99 fail?
[1] https://www.fdic.gov/bank/individual/failed/banklist.html
>Also, the local monopolies of ISPs have led to rent-seeking and less innovation.
The problem with ISPs aren't that they're big, it's that they hold monopolies over a geographic area limiting consumer choice. Breaking them up will do nothing, as each company post-breakup still hold a monopoly and therefore can continue to abuse consumers.
