ICYMI: Atkinson And Lind Highlight Economic Benefits Of Large Firms
Yesterday in The Atlantic, Robert Atkinson and Michael Lind wrote, “The anti-monopoly school identifies many genuine problems, ranging from low wages to the massive influence of money in politics. But the solution to low wages is not to break up big, productive firms that pay higher wages. Public policy should encourage start-ups that have the potential to scale up into dynamic national or global firms.”
The president of the Information Technology and Innovation Foundation (ITIF) and the co-founder of New America, respectively, detail how large firms power American growth and competitiveness:
“Workers employed by large firms also earned more—on average, 54 percent more than workers at small companies.”
“Companies with more than 500 employees offer 2.5 times more paid leave and insurance benefits and 3.9 times more in retirement benefits than workers at firms with fewer than 100 employees.”
“Big companies also create more net jobs.” Atkinson and Lind reflect an array of evidence, including from Michael Mandel at the Progressive Policy Institute, that large firms produce a significant number of jobs.
“Business professors Anne Marie Knott and Carl Vieregger have discovered that large firms not only invest more in R&D than small firms, they get more innovation output per dollar invested.”
Large Firms, Including Leading Tech Services, Are Major Drivers Of Innovation And Jobs
Atkinson And Lind Note That Large Firms Generate Substantial Benefits For Their Employees. “In 2015, small enterprises were four times more likely to lay off their workers than large ones. Workers employed by large firms also earned more—on average, 54 percent more than workers at small companies. Companies with more than 500 employees offer 2.5 times more paid leave and insurance benefits and 3.9 times more in retirement benefits than workers at firms with fewer than 100 employees. Large firms are also more likely to be unionized, and they employ a greater share of women and minorities than small firms do, making Big Business an unlikely enemy of progressives. Big businesses also create more net jobs.” (Robert Atkinson and Michael Lind, “Is Big Business Really That Bad?”, The Atlantic, 3/7/18)
Atkinson And Lind Highlight That Large Firms Invest The Most In R&D And Were Critical For Laying The Groundwork For Technological Revolutions. “The business professors Anne Marie Knott and Carl Vieregger have discovered that large firms not only invest more in R&D than small firms, they get more innovation output per dollar invested. Brilliant entrepreneurs like Steve Jobs and Bill Gates are indispensable for technological progress. But much of the information technology that they commercialized had been developed in previous generations by big firms such as IBM and Xerox.” (Robert Atkinson and Michael Lind, “Is Big Business Really That Bad?”, The Atlantic, 3/7/18)
Like Atkinson And Lind, Former Obama Economist Carl Shapiro And PPI’s Michael Mandel Have Eschewed The “Big Is Bad” Mentality
Shapiro Emphasizes That We Should Avoid A “Big Is Bad” Mentality And Truly Have The Interests Of Consumers In Mind. “I believe this approach is sound and has widespread support among industrial organization economists. So I say: let these inquiries proceed when suspicious conduct can be identified. But in doing so, let us avoid a ‘big is bad’ mentality and let us truly have the interests of consumers in mind. We learned long ago that proper antitrust enforcement is about protecting consumers, and protecting the competitive process, not about protecting competitors. We must not forget that guiding principle. Indeed, that principle is especially important in markets subject to large economies of scale, whether those scale economies are based on traditional production economies or based on network effects, which are often important in the tech sector.” (Carl Shapiro, “Antitrust In A Time Of Populism,” Haas School Of Business, 10/24/17)
PPI’s Michael Mandel Notes Today’s Leading Tech Companies Have Created More Jobs Than Leading Companies Of The Past. “Tech giants such as Google, Apple, Facebook and Microsoft are adding jobs as fast or faster than the great job-producing companies of the past, like GM, AT&T, Walmart, IBM, GE, US Steel, and Bethlehem Steel. Consider this: Twenty years after its 1892 founding, General Electric had 41,000 employees. Google beat that mark in 2012, only 8 years after its 2004 initial public offering.” (Michael Mandel, “A Historical Perspective On Tech Job Growth,” Progressive Policy Institute, 1/10/17)