A Corporation can be "too big to fail"

I've been trying to decide whether to be mean and post a full round or to just be nice and post nothing. I've decided to post what I had already typed up PRIOR to darkkermit's forfeit, since it's not my fault he couldn't post his argument. Here we are: I'll begin with a very simple argument, and then dive into the nitty-gritty arguments about banking and derivatives [in a later round]. C1) Essential industries I doubt anyone would really shed a tear if, for example, Microsoft went out of business. People could keep using old versions of Windows, switch to Linux, or wait until another replacement was created to fill the void. However, there are some industries where people cannot survive without that industry's product or cannot switch to an easy substitute; these industries include: food, electricity, and financial services. So our first observation is that not all industries are the same. Industries where people HAVE to buy the industry's product, for whatever reason, are said to have "inelastic demand." By definition, inelastic demand means "consumers cannot consume (much) less of the product and cannot switch to another, related product." Large corporations in industries with ELASTIC demand may NOT be too big to fail (because consumers can stop consuming or can switch to another product), but large corporations in markets with INELASTIC demand ARE too big to fail. The second observation we need to make is that the resolution is theoretical: darkkermit needs to prove that a company CANNOT become too big to fail. So I merely need to prove that a company in one of these industries CAN become too big to fail, theoretically, not that any company current IS too big to fail. Let's look to a few quick hypotheticals: We all know that large agro-businesses have been buying up small family farms for a long time. For the sake of argument, imagine a world in which Monsanto owned 100% of corn and wheat production in the United States. Corn is used to feed all our livestock, so if Monsanto went out of business, there would be mass starvation in the United States, at least until the next planting season started. There is simply no way that tens of thousands of small family farms could quickly fill the void created by an enormous agro-business going bankrupt. Thus, large agro-businesses are "too big to fail." The above hypothetical is not that far from the truth. The agricultural industry went through two "revolutions" to increase crop yields in recent decades, but these two revolutions ultimately made the industry dependent on a few large seed suppliers. In the 80's and 90's, we underwent the "Green Revolution," where selective breeding of crops led to heartier varieties that grew more quickly with less need for fertilizer. More recently, we underwent the "Gene Revolution," which introduced genetically modified strains of crops in order to even further increase crop yields. Because the best seed varieties are very difficult to produce, farmers all generally buy their seeds from large corporations. According to Forbes, Monsanto has 95% market share in the U.S. seed industry. [1] Since farmers have lost the ability to produce their own seeds, this means that if Monsanto went bankrupt, we wouldn't be able to produce enough seeds quickly enough to feed our country. In the other hypothetical, just picture the same market domination, but by PG&E in the power industry. If PG&E owned 100% of power plants, then their bankruptcy would bankrupt the entire U.S. economy. All businesses would need to shut down, since every modern business relies on computers, which rely on power. Financial services, i.e. the ability to borrow and transfer money easily throughout the economy, are equally essential, but are slightly more complicated, which is why I will cover them separately in my later points. [1] http://tinyurl.com...