Capitalism is built around the risk so needed to be ventured in order to secure a profit – of which, those that are capitalists are private actors, that either are using their own assets to take on such a risk, or doing so in conjunction with investors, or have investors that are taking that monetary risk for them, in return for their opportunity to obtain some sizable portion of the profit, so made. The best thing about capitalism is the fact that all those that are involved in the game are taking a calculated risk, either explicitly or implicitly, and well understand that any conceived enterprise, could well end up in failure, or alternatively, with success.
In those sectors in which an enterprise doesn’t have much of a material risk in generating a profit, we then would have a strong tendency to see occur, more and more players within that particular enterprise area, for there aren’t many institutions that would turn down a guaranteed profit. Indeed, in a free enterprise system, those perceived businesses that appear to offer easy and secure profits would invariably attract those that would be willing to take on additional risks in order to become industry leaders and to therefore take market share away from all those that were more adverse to risk or in the taking of chances.
So then, in a truly capitalistic world, there could not ever be anything ever approaching a “too big to fail” type of business – because the very nature of capitalistic business involves not only risk, but the fact that because a given company can fail, that this thus means that companies cannot ever afford to just rest upon their laurels, but most continually do what is so necessary to improve their products, to invest intelligently in research and development, and to consistently make good decisions. Any company, then, so designated as “too big to fail” is by definition, something that is anathema to capitalism.
The fact of the matter is, that this government should never be in the position in which it will deliberately backstop certain industries and corporations, while effectively ignoring all sorts of other businesses and corporations. To get to the point where any one company is designated as too big to fail, signifies clearly that such a company as that, should either be nationalized, or have the best aspects of such, broken down into several smaller components.
Whenever, a particular company is treated by this governance as something so special as to be too big to fail, then essentially the governance of this nation has determined that it will not only play favorites, but correspondingly, there must be then a multitude of other companies that will not receive such special beneficence, in return. Further to the point, those that know that they are too big to fail, are now going to also know for a certainty, that since they cannot fail, that they can thus take as much risk as they so desire to take, without having to suffer any consequences for those risks so taken – since those that are its executives know that no matter what goes down, no matter how stupid or inane, their corporation will not ever fail, which serves then as the touchpoint of the end of capitalism.