George Rebane

After some considerable thought, we are adding the criterion for the natural size of a corporation to Rebane Doctrine.  To keep it short and simple, a corporation becomes too large to manage when its manager cannot be reasonably held accountable for the corporation’s major violations of law and regulations.  In short, when the corporation becomes criminally culpable, and no one can reasonably point a finger at any people in management who should be held accountable, then there is a problem.  When that occurs, then the appropriate regulatory agencies, overseen by the Executive, should file suitable anti-trust suits to break up the corporation.  In this case, the offending corporation should be given six to twelve months to come up with a ‘breakup plan’ that it considers acceptable to the regulators and shareholders so that the surviving entities may still be viable in the marketplace.

The acid test of such a break up is whether the new CEO nominees (or management committees) will accept their positions, given that they will be held personally culpable if their corporation goes off the legal or regulatory rails.  If no one is still willing to take the job, then it’s clear that smaller pieces of the original corporation are called for.  Management should have no excuse in copping the pleas that ‘it was too big and complex for me to keep track of it’.  If corporations are to be treated as legal entities with rights and privileges, then they must also be liable for screwing up.  And since corporations as legal entities per se can suffer neither pain nor celebrate joy, that feedback must fall to the humans who can.  That is Rebane Doctrine.

All this comports with the long-held Rebane Doctrine principle that government is not the only kind of large bureaucratic organization that can regularly screw up – all large organizations in which feedback paths become dysfunctional or cease to exist are liable.  Recall that when corporations become leviathans unable to compete in open markets, they use their cash reserves to buy politicians and transform themselves into the corporatist mold in which they invoke the government gun to keep competition at bay.

[update]  The Cato Institute just released a recent policy analysis regarding how government should treat 'tech giants' that have a potential of acting like monopolies in their respective markets.  It's an area where government should provide oversight but tread lightly when it comes to dictating the structure and operational limits for private enterprises.  Economist Ryan Bourne explains in 'Is This Time Different?'

And as radical leftwing and unapologetic as one can get, here is a missive from Umair Haque, currently one of our favorite communists, on the “awesome plan” Elizabeth Warren has “to save America”.  To keep up with great thoughts from our Left, especially on how to treat America's businesses, this piece (here) is assigned reading.