Corporate personhood laws makes it harder to punish the actual people in charge.
Problems in tort law (in the US) make it difficult to sue corporations for certain kinds of damages.
A large government (territorial monopoly of jurisdiction) makes it more profitable for any sufficiently large company to use the state as a bludgeon against its competitors (lobbying, bribes, friends in high places) instead of competing directly on the market.
Letting companies that waste resources go bankrupt causes short-term damage to the economy, but it is healthy in the long term because it allows more efficient companies to take over the tied-up talent and resources. Politicians care more about the short term than the long term.
For pharmaceutical companies there is an additional embiggening factor. Testing for FDA drug approval costs millions of dollars, which constitutes a huge barrier to entry for smaller companies. Hence the large companies can grow larger with little competition. This is amplified by 1 and 2, and 3 suggests that most of the competition among Big Pharma is over legislators and regulators, not market competition.
Disclosure: I am a “common law” libertarian (I find all monopolies counterproductive, including state governments).
I’d add trauma from the Great Depression (amplified by the Great Recession) which means that any loss of jobs sounds very bad, and (not related to the topic but a corollary) anything which creates jobs can be made to sound good.
The causes of “too big to fail” are:
Corporate personhood laws makes it harder to punish the actual people in charge.
Problems in tort law (in the US) make it difficult to sue corporations for certain kinds of damages.
A large government (territorial monopoly of jurisdiction) makes it more profitable for any sufficiently large company to use the state as a bludgeon against its competitors (lobbying, bribes, friends in high places) instead of competing directly on the market.
Letting companies that waste resources go bankrupt causes short-term damage to the economy, but it is healthy in the long term because it allows more efficient companies to take over the tied-up talent and resources. Politicians care more about the short term than the long term.
For pharmaceutical companies there is an additional embiggening factor. Testing for FDA drug approval costs millions of dollars, which constitutes a huge barrier to entry for smaller companies. Hence the large companies can grow larger with little competition. This is amplified by 1 and 2, and 3 suggests that most of the competition among Big Pharma is over legislators and regulators, not market competition.
Disclosure: I am a “common law” libertarian (I find all monopolies counterproductive, including state governments).
I’d add trauma from the Great Depression (amplified by the Great Recession) which means that any loss of jobs sounds very bad, and (not related to the topic but a corollary) anything which creates jobs can be made to sound good.