Why Exactly Are Big Banks Bad?
By Simon Johnson, Baseline Scenario, 4 March 2010
Just over 100 years ago, as the nineteenth century drew to a close, big business in America was synonymous with productivity, quality, and success. “Economies of scale” meant that big railroads and big oil companies could move cargo and supply energy cheaper than their smaller competitors and, consequently, became even larger.
But there also proved to be a dark side to size and in the first decade of the 20th century mainstream opinion turned sharply against big business for three reasons. [Click on headline for complete original post.]
Phi Beta Iota: The earlier literature represented by Small is Beautiful and Human Scale has now been dramatically reinforced by literatures on civilization building, collective intelligence, common wealth, and so on (other lists). They all boil down to keeping power at the lowest level possible. Aggregated power is bad for democracy–this applies to big government just as it does to big banks, and it applies especially to the ludicrous notions of world government (as opposed to a world brain, where every node is unique and independent).
