Business benefits from concentration of power, but not society. Society needs choice.

The business model prevalent in the major business schools is that value increases with more and more profit and more and more size. This is dangerous because what it means is that a winning company can become a dominant presence in society buit if and when it stops functioning it will leave a hole in the economic ecosystem. Any business can stop functioning for technical reasons or because of political interference.

I have been concerned about the issue of concentration of economic power for a very long time. Some of the dangers of concentration of economic power was identified when John D. Rockerfeller controlled much of the US oil industry and in response there was legislation to avoid a repeat. In spite of this legislation, there is a continuing tendancy for business to grow as much as it can, and this results in monopoly situations in industry after industry over and over again.

Besides single company monopoly, there is also the problem of cartels where several companies conspire to contral a market. One of the infamous cartels in the past was the electric generating equipment manufacturers who operated a highly profitable cartel and were brought to account in the 1960s

For many years IBM was under the shadow of anti-trust allegations because of its dominance in the field of mainframe computers

For decades starting in 1907 and renewed in the 1930s, AT&T ... Ma Bell ... had a regulated monopoly in the telecom sector. This ended in the early 1980s when the company lost an antitrust case for the first time in a very long time. I argued at the time, and continue now, that the main reason they lost this time round was because the company had failed to prepare for a change in technology and their balance sheet was way too weak to fund the modernization of the system to embrace new technology. With the cover of the court they had to recorganize into a number of smaller companies ... the so called Baby Bell. In the process it is my view that they were completely 'out of control' during the reorganization and were able to revalue their balance sheets to present a far better face to the world and the financial community. The accounting that was done was, in my view, largely a fiction and a fabrication. Not much research on this seems to have been done ... and why am I not surprised.

Microsoft is another company that has to face legal challenges about it dominant position in its sector. Even though it has had a very dominant position in the IT sector, it was able to avoid anti-trust breakup. Whether this was because of the realities of the situation or something to do with the influence that the company was able to bring to bear on the process is unclear.

IBM, AT&T and Microsoft have one thing in common. They all had tremendous market presence and they all had product that was technically less than the best ... significantly less than the best. They also were very powerful financially ... until AT&T caved ... and politically.