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Comment by Teodolfo | Hacker News Reader

Markets can't solve everything. If "the market" creates massive firms, maybe some things need massive central planning? See http://krugman.blogs.nytimes.com/2013/07/16/john-galt-and-th...

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Most of the time big firms exist because only large businesses can deal with the immense regulations in their field. Big business loves regulations because it actually decreases the competition.

See: healthcare, finance, insurance.

Speaking from personal experience (high-tech manufacturing, dealing with SOX-404, FDA CFR11 Part 2, ISO/TUV/CE/..., NATO, and DoD regulations), a lot of this bureaucracy is self-created by people who are ignorant of the actual requirements but in positions powerful enough to overcome that barrier and force other employees to do needless busywork, resulting in self-imposed regulations that don't need to exist for any legal reason, but which once emplaced are nearly impossible to eliminate.

aka The Iron Law of Bureaucracy

http://www.jerrypournelle.com/reports/jerryp/iron.html

If the solution is massive central planning, and markets create massive centrally-planned entities, then is the market not solving the problem?

The important difference is that if a firm accumulates too many of these organizational pathologies it can be allowed to collapse and be replaced. In theory you could do that with government departments, but I've never heard of that actually happening. Goodness knows the US Department of the Interior could use something like this.

Democratic accountability helps to keep the "parasite load" down, but only so much and only to the extent that problems capture the attention of the public (see again about the Department of the Interior). To the extent that the government does more stuff there's less democratic oversight on any particular thing that it does.

In that case I say we nationalize them. There's no need for more than one State.

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