I submitted this article because there are lots of issues pointed out that I feel very strongly in favor of. (For example, the patent system being, sum total, a net harm). The only problem with it that I have is that it feels kind of half baked. There are so many ideas expressed that it almost seems like it should've been explained in an entire book rather than a blog post.
The reason I submitted it is because I thought and hoped it would generate some very interesting discussion here.
It's very naive. There's no telling what breaking up any company that achieves 5% to 10% market share would do to capitalism, but it probably wouldn't be good. Would you bother trying to build the next Google if you knew it was just going to be split into 15 pieces if you succeeded? I would not.
It also says nothing two of the biggest problems our brand of capitalism faces, which are perverse incentives and lack of transparency, both of which were leading causes of the recent meltdown and our current health care woes.
And good luck fighting network effects. How many Facebooks and LinkedIns do we need? While we could use different social tools, what value is there in more Facebook look-alikes resulting from a breakup? The value of these social tools derives from their network effects.
For the specific example of Facebook, it'd quite feasible to have a lot of different services that shared data as needed. It's not the name of the front end that people want, it's the social interaction.
That's like saying that we should all share capital. Data is the new capital, and businesses will live and die by how they manage their data and extract value from it.
Part of the problem seems to be that executives tend to be empire-builders rather than profit-maximizers: that's one of the reasons M&A happen so much more than economists would normally predict. I think the solution is to make breaking up companies somehow profitable for the owners of the broken-up company, so that being broken up could even be seen as a success of sorts. Part of that is going to be cultural but part can be economic.
The 5% to 10% is an example aimed at most markets. I would not apply it to Google. I would apply that to pub chains, food and beverages, most manufacturing, retailers, etc.
It does cover at least some perverse incentives with regard to corporate governance.
It is also a summary of a lot of issues. There are links to articles with more details.
If you can't come up with a hard-and-fast rule, then the interpretation/selective-enforcement is just going to open the door to patronage and corruption.
The reason I submitted it is because I thought and hoped it would generate some very interesting discussion here.