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given . economic incentives to stall change with prolonged hearings and appellant litigation; and all of this transpires on a case-by-case approach, requiring interminable repetition. An alternative of governmentally established public charges secure their legislative adoption, would have induced immediate rational responses by polluting enterprises to reduce their effluents, immediately within the limits of their current technology, and subsequently within the adaptable possibilities of their long-run technology. All of this would have happened in response to the compelling incentives of profit maximization. In like fashion, Congress might be induced, following a dramatic orchestration of democratic countervailing pressure, to establish a system of charges for excessive corporate size, so as to reduce strains on our social-political environment of pluralism. Given the adoption of tax incentives to deter giant size, profitmaking corporations will respond to such new prices against super-organizational pollution in a rational manner, so as to services for any target level of enhanced pluralism. Furthermore, dynamic incentives will be maximized to search for managerial innovations designed to enhance the efficiency of corporations of reduced size. But, of course, the really crucial advantage of charges against giantism will be found in the domain of efficacy and expedition. Giant corporations will immediately begin to evaluate the private benefits of paying the charge relative to the benefits of corporate reorganizations involving alternative shapes and magnitudes of spin-offs. Corporations would no longer be motivated to obfuscate, bluff, and procrastinate on issues of efficiencygiven the corporation’s strategically advanced position, with superior access to its own “monopolized” information. In contrast with the protracted delay before both agencies and reviewing courts, brought on by “balancing” of costs and benefits under the administrative-judicial process, action emerges promptly upon the corporation’s own evaluation of the cost-effectiveness of greater corporate size, considering the price which it must pay for giantism. Moreover, periodic reevaluations of the costeffectiveness of integrated sizewith or without changes in the schedule of government charges against sizewill automatically lead to further corporate spin-offs without reopenings of administrative-judicial processes. . . Two major differences arise in the workings of bio-physical pollution charges vs. socio-political pollution charges. First, corporate size, are interchangeable: each B.O.D. unit is weighted and charged equally, irrespective of the quantity emitted by a polluter. Hence, a proportional charge schedule is ap propriate. Units of excessive size of differing magnitude are not evaluated equally: the damage to socio-political pluralism from excessive size will be deemed by most citizens to vary more than proportionally to a corporation’s measured magnitude of excessive size. Thus the charge for corporate organization pollution, in contrast to the charge for technological process \(or range of charge exemptions with zero marginal rates for small, medium, and even big business of relatively harmless size \(with take effect in the range of giant corporations and rise, in step-like fashion, with increasing magnitudes of excess size. Second, the cost of accommodating to environmental charges by technological vs. organizational realignments is likely to be less relative to the level of “pollution” charges in the instance of socio-political abatements than in the instance of biophysical abatements. Two reasons stand out. Most uncontestably, but probably less importantly, all of the private advantages surrendered, consequent to induced reductions in corporate size, do not constitute social opportunity costs. Unlike the real dollar-for-dollar goods and services sacrificed so as to commit resources to reducing bio-physical pollution, some market power also will be coincidentally sacrificed in corporate decentralizations. Any market power, coincidentally surrendered consequent to corporate spin-offs, does indeed constitute benefits sacrificed by interests in the reorganized corporation, but it concurrently constitutes income transfers to consumers or resource suppliers. Probably more important, but unprovable empirically ex ante, for lack of available unbiased data, the real unit costs relative to the pollution charge level are likely to be substantially less in reorganizing corporate processes. The heavy capital and operating costs in reducing the B.O.D.s of papermills are legend, as are the heavy capital, fuel substitution and operating costs in reducing sulfur dioxide emissions of most power plants based upon Illinois, Indiana, Ohio and Western Kentucky coal. Reducing multi-plant, not to mention multi-division, conditions of vast size, particularly in the instance of conglomerates but also with much vertical integration, sacrifices some real economies of managerial-marketing-finance scale, management superiority, saving in transaction costs, and superior effectiveness in monitoring divisional performance. 8 Nevertheless, real advantages of super size are likely to be modest. Relentless drives for profit-maximization will tend to compel expansion for merely slight efficiency advantagesnot to mention inducements to merger conglomerately given by two-tier stock markets, and inducements to respond to favorable luck \(as hypothesized in the 1.”Polyarchal government is thus a collection of bodies all intentionally crippled because of their otherwise fearful strength.” Charles E. Lindblom, Politics and Markets, 1977. 2.See Adolph A. Berle, “Economic Power and the Free Society,” in Andrew Hacker. ed., The Corporation Take-Over, 1964, pp. 92-94. 3.Frank J. Kottke, “Dissolution and Scale Economies: A Comment,” Antitrust Law and Economic Review, Vol. 5, Winter 1971-72, pp. 55-78, and “Social Control of Corporate Power: Comment,” Journal of Economic Issues, Vol. IX, No. 2, June 1975, pp. 405-408. 4.Oliver E. Williamson, “Economics as an Antitrust Defense Revisited,” University of Pennsylvania Law Review, Vol. 125, No. 4, April 1977, pp. 703. 5.Barry Commoner, The Closing Circle, 1972. 6.Allen V. Kneese and Charles L. Schultze, Pollution, Prices and Public Policy, 1975, and Charles L. Schultze, The Public Use of Private Interest, 1977. 7.Separate charge levels must be established, of course, for other forms of water pollution. Some toxins, such as mercury and PCBs, are so dangerous that their charges are, in effect, infinite. That is, such toxins are completely banned. 8.See Oliver E. Williamson, Markets and Hierarchies: Analysis and Antitrust Implications, 1975. Professor Samuel M. Loescher requests that readers be informed that he neither receives compensation from, nor renders endorsements of, the American Income Life Insurance Company. He further wishes to inform readers that this article is scheduled to appear in the June 1979 issue of the Journal of Economic Issues, the Proceeding issue of the 1978 Annual Meeting of the Association for Evolutionary Economics. Bernard Rapoport, Chairman of the Board P.O. Box 208, Waco, Texas 76703 American Income Life Insurance Company 01=111111THE TEXAS OBSERVER 17