> There are already massive, artificial advantages for large corporations.
And massive benefits for startups. The grass is always greener, of course, and people are most likely to see the advantages on the other side.
> Large corporations have access to the public markets and hundreds of other financing options.
This isn't some benefit that's dolled out by a controlling group, like the government. This is because people are willing to invest money, because they are much more stable. Startups are incredibly risky, and most will fail. If you give a "benefit" to investing in startups so that more people invest, someone is losing somewhere. It's equivalent to a government expense, which must be made up elsewhere.
The fact is, startups have just as many financing options as everybody else: the group of people that are willing to give them money all factors included.
> Furthermore, since IPOs are so incredibly painful now, M&A is the only exit for startup entrepreneurs
Incorrect. Startups don't have to exit, they have just as much ability to grow, become incredibly profitable, and turn into the larger companies, should they choose to do so.
> Large corporations have the risk of making the wrong hires aggregated over thousands of people.
That would be correct if you assumed that the talent pool is made up of mostly smart people, except that it isn't. The talent pool is made up of mostly average or stupid people, with increasingly few really smart people. Hiring thousands of people just aggravates the risk and increases the chances that you will hire even more poor talent (given that there is not an infinite pool of incredible talent).
> Large corporations have the ability to massively lobby themselves to other large corporations or the government, encouraging massive kickbacks and corruption.
Of course, isn't what this article is proposing another form of kickback? Why don't we just eliminate those all together?
> The major disadvantage that large corporations have is that in many areas they're not particularly suitable for creative work.
And that they're incredibly hard to manage, tend towards slow, bureaucratic work, have an incredibly difficult time innovating, are placed under high scrutiny and regulation (esp post SarbOx), and the list goes on.
I, for one, don't envy the position of large corporations at all.
> This isn't some benefit dolled out by a controlling group...
The difference is that the government actively prevents large classes of investments from being made, and the weight of this restriction falls most heavily on startups, which lack the institutional knowledge to navigate such obstacles.
> Startups don't have to exit...
True enough. However, look at it from the standpoint of a bargaining position. Acquiring companies have enormous leverage back they're able to offer people their first few million. If an IPO is easier, then it becomes a more attractive option. This might not affect you as an entrepreneur, personally, but it does affect the market for startups.
> That would be correct if you assumed that the talent pool...
True, but even the most acute startups are vulnerable to mistakes in hiring. And the average quality of hacker at Google or Amazon or Microsoft may even be higher than most startups. The difference in productivity might be accounted for by institutional baggage alone.
> Isn't what this article proposing another form of kickback?
I don't believe it is. A social safety net for everyone is quite different from, say, a multibillion dollar infusion into one industry in wall street, or massive pork-barrel public works projects later abandoned for political motives, or monopolistic support of contractors such as Halliburton, or corn subsidies, or our new reinvestment into Nuclear without a discussion involving wind power. It seems almost completely different.
Eliminating all kickbacks, if I understand the strong libertarian position correctly, includes eliminating things like fire departments. When some theory of values, however intuitively appealing, starts contradicting so powerfully what we have reason to think good, I call question to the theory.
> I, for one, don't envy the position of large corporations at all.
I either. But if startups are naturally more productive, then one should at least acknowledge the strong advantages given artificially to their bulkier cousins.
And massive benefits for startups. The grass is always greener, of course, and people are most likely to see the advantages on the other side.
> Large corporations have access to the public markets and hundreds of other financing options.
This isn't some benefit that's dolled out by a controlling group, like the government. This is because people are willing to invest money, because they are much more stable. Startups are incredibly risky, and most will fail. If you give a "benefit" to investing in startups so that more people invest, someone is losing somewhere. It's equivalent to a government expense, which must be made up elsewhere.
The fact is, startups have just as many financing options as everybody else: the group of people that are willing to give them money all factors included.
> Furthermore, since IPOs are so incredibly painful now, M&A is the only exit for startup entrepreneurs
Incorrect. Startups don't have to exit, they have just as much ability to grow, become incredibly profitable, and turn into the larger companies, should they choose to do so.
> Large corporations have the risk of making the wrong hires aggregated over thousands of people.
That would be correct if you assumed that the talent pool is made up of mostly smart people, except that it isn't. The talent pool is made up of mostly average or stupid people, with increasingly few really smart people. Hiring thousands of people just aggravates the risk and increases the chances that you will hire even more poor talent (given that there is not an infinite pool of incredible talent).
> Large corporations have the ability to massively lobby themselves to other large corporations or the government, encouraging massive kickbacks and corruption.
Of course, isn't what this article is proposing another form of kickback? Why don't we just eliminate those all together?
> The major disadvantage that large corporations have is that in many areas they're not particularly suitable for creative work.
And that they're incredibly hard to manage, tend towards slow, bureaucratic work, have an incredibly difficult time innovating, are placed under high scrutiny and regulation (esp post SarbOx), and the list goes on.
I, for one, don't envy the position of large corporations at all.