The Tech Monsters – Tablet Magazine
There is growing interest in a Glass-Steagall for the tech sector. Just as the Glass-Steagall Act of 1933 (partly repealed by the Gramm-Leach-Bliley Act of 1999) separated commercial from investment banking, so a Glass-Steagall for tech would force companies to choose between being platforms or producers of goods and services. A Glass-Steagall for the internet era is a good idea.
Also justified would be Justice Department antitrust initiatives that force inefficient, unwieldy tech conglomerates to spin off unrelated businesses and focus on their core competencies. Using antitrust law surgically, to split incoherent conglomerates into individual firms in different business lines, makes much more sense than using antitrust litigation mindlessly and indiscriminately against all big firms.
Horizontal and vertical mergers that increase productivity should be allowed and even encouraged. But conglomerate mergers that merely increase parasitic financial rents for the investors and managers of octopoid holding companies are bad. Our guide in these matters should be the late business analyst Peter Drucker, who, in a September 1998 interview with Fortune, famously observed: Securities analysts believe that companies make money. Companies make shoes!