Silicon valley's Tax-Avoiding Job-Killing, Soul sucking machine
http://www.esquire.com/news-politics/a15895746/bust-big-tech-silicon-valley/
Context:
The blue state focuses on encouraging innovation believing that it will raise our overall standard of living. However, many of the start-ups that emerge from this model are created with a build to flip model, meaning that they are built simply to be acquired. The majority of this acquisition is made by a group nicknamed the four. The four is comprised of the companies that dominate our daily lives '
In the article titled “Silicon valley's Tax-Avoiding Job-Killing, Soul sucking machine” Scott argues that these 4 companies are killing America’s economy. Through their acquisitions or anti-competitive practices, they dominate taking most of the profits in their respective industries. The problem caused by this is that clever accounting and favorable laws from the blue state allows them to pay very little in taxes. Additionally, large tech companies employ fewer employees than traditional firms, meaning that when they gain market share they destroy more jobs than they create.
Question:
based on the article or my summary… do you think the economy would benefit from breaking up large firms and forcing their subsidiaries to operate separately? For example, having Facebook and Instagram operate as separate companies to promote more competition in the market.
My opinion:
In my opinion, the government stepping in to prevent acquisitions that lead to unnatural monopolies would be very beneficial. Policies discouraging this would lead to entrepreneurs build longer lasting companies, in a more competitive environment who will pay their fair share of taxes.
I think because being acquired is a norm and sort of a demand by the entrepreneurs, they are equally responsible for fuelling the growth of this system. It's quite hard to say if governmental policies can really change this monopolisation system, because governments are looking for their own benefits. I think stepping up policies on small businesses and helping them achieve success may be more realistic than putting restrictions on acquiring policies.
ReplyDeleteAlso, competition is good but how much is too much? And maybe this competition may lead to the inability to produce and innovate?
First of all, I would like to point out how interesting this article is and how it has led me to thinking about our economy in a different perspective. The part of the article which states, “Think back on every fear, every hope, every desire you’ve confessed to Google’s search box and then ask yourself: Is there any entity you’ve trusted more with your secrets? Does anybody know you better than Google?”, made me realize how much Google alone has taken over my life. Concerning this, I think that it is important to recognize that these firms are becoming so invasive to the point where they do not let other firms emerge. I agree that it would be beneficial to break up large firms because the monopolistic power of the big four are failing to maintain healthy and fair markets.
ReplyDeleteI also think that Shinjni’s question regarding competition is very interesting and is a significant one. As the article stated, ‘competition motivates the invention and distribution of better offerings’, so I think that more creativity can become a result of more competition.
I agree with the articles argument that there four companies pose high risks to our economy. They are becoming giant conglomerates that control many aspects of our lives from shopping to communication to opinion/thought process. There are many risks when societies institutions are being held by a small number of people, as it impacts the way we think not only about ourselves but also about the world around us and how we come to organize ourselves.
ReplyDeleteI think that breaking up these large firms into separate operations would benefit our economy. Competition improves service and keeps costs down, therefore rather than having these firms function under the same regulations and possessing the same entities, the would begin to compete with each other. These large corporations may be less responsive to consumers because they don’t have to be. If business is assured, then they do not necessarily have to go out of their way to meet consumer needs.
Competition is a good thing, if it is always competing to benefit people's lives the most. This article points out that competition in companies is dwindling, and it seems like a monopoly is becoming a reality. Not only does this monopoly threaten smaller companies form succeeding, but it also threatens the choice and "consumer first" attitude. If four companies are dominate the very high majority of the stock markets, then they get to make whatever decisions they want to for the people without anyone powerful enough to fight against these decisions. This does not put us, as consumers in a very good position, and leaves us prey to having little control.
ReplyDeleteVarieties of companies is not only good for the market, but is also good for the public.