A two-bit ice cream vendor, though, may not be a conglomerate, but he could charge just about anything he wants if no one else is plying the beach on a hot day. We second-guess size only as it relates to consumer welfare. But consumer activist Ralph Nader sees plenty to second-guess. He says the mega-mergers could lead to higher prices, concentrated political power, inefficiencies and a quashing of upstart competitors who could bring new products to the market. The bigger you are, the less flexible you are, the less you will give your people entrepreneurial elbow room.
Many economists beg to differ.
They say mergers can lead to more efficient companies and, therefore, lower prices. Large companies put society's resources into the most profitable places, which improves the entire economy. And they help companies muster the size needed to compete in a marketplace that increasingly crosses national borders. That need for globalization is one of the driving forces behind the mergers. And as markets become more global, there is more competition, even for big companies.