If it’s too big to die, it probably should

In a recent piece called Let Beached Whales Die, Max Kalehoff suggested that, just as it can be more humane, if more emotionally painful, to let beached whales die, it can also be more humane to allow large, poorly run businesses to come to a natural end. He was, of course, referring to those businesses we’re seeing in a shroud of panic on the news these days: car companies, finance companies, insurance companies. He was saying that when we protect those companies because they’re too big to die, we stifle innovation and cripple ourselves in the process. He was saying that even though we think we’re doing ourselves a favor, we’re actually doing ourselves a disservice. As much as I agree with Max, I don’t think the people looking to save our automakers are as worried about the whale as they are about the whale’s larger ecosystem. Macro economic phenomena don’t follow the same rules as micro economic phenomena. A sinking pebble doesn’t create a vortex that drowns others around it, but a sinking cargo liner might. To shift metaphors, the beached whales we’re discussing are indeed cargo liners; their demise would suck a lot of other boats underwater. They go out of business, and the ancillary companies that serve them go out of business: everyone from the small sandwich cart that caters to the lunch crowd to the family-owned uniform-supply company to the extensive network of car dealers. ‘Too big to die’ doesn’t mean that we care about you, it means we don’t want to be sucked under when you go. This is a big problem. The obvious solution is to not let companies get so big that they could bring us all down, but limiting growth prospects is in direct contravention to The American Way. To be clear, what we’re discussing is not a monopoly issue. Monopolies aren’t cool for a different reason: because their sole-source status affords them the luxury of setting prices however they want, generally to the detriment of the consumer. Cargo liner companies aren’t cool because, like it or not, we are all invested in their continued success. And, I’m sorry to say, I think Google is too big. Its market cap (US$124 billion last I checked) would make it the 56th largest country in the world by GDP. More importantly, and to add yet another metaphor to this post, it is the sun in the search galaxy. Anyone whose business depends on search — SEOs, advertisers, publishers, Google-Subnet contributors — we all rely on Google staying alive so we can stay alive. This is not a healthy situation for us to be in, no matter how well the company is doing at the moment. So I would like to issue a call for ideas. How do you think monoliths should be treated? What should be done when a company looks like it’s going to get ‘too big to die’? Should it be killed? Broken up? Or should we just let it keep going, growing evermore fat and complacent, until it ceases to be the cheeky outperforming upstart, until it stops caring and innovating and providing value, until all the subsidies and handouts in the world aren’t enough to save it? I look forward to hearing your ideas.