The Instigator
Pro (for)
5 Points
The Contender
Con (against)
4 Points

Are some corporations too big to fail?

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Voting Style: Open Point System: 7 Point
Started: 6/8/2013 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 1,845 times Debate No: 34607
Debate Rounds (2)
Comments (1)
Votes (2)




Big corporations are always interconnected with other companies and banks. For example, AIG was too global and too interconnected to let fail. AIG owns a share of companies in over five different countries. In China AIG owns 20% of PICC (people"s insurance company of china), which is China"s largest insurer of causality insurance. It also owns a controlling share of Beijing Panam International Aviation Academy. Which is the largest privately owned flight training school in China. AIG owns more companies in Japan, Indonesia, Pakistan, United Kingdom, and also USA. With over 15 different companies in USA alone, AIG was too big to be left to fail. Thus the government had to step in 2008 and give a $85 billion Federal Reserve loan to AIG.

With the ongoing world of technology, a lot of major companies rely on other companies in the world of technology. Many people may not know that such companies like Microsoft, Amazon, Disney, Apple, Facebook, Google, AOL, Twitter, EBay, and PayPal are all interconnected and if one gets affected even in the slightest way, the partnering companies will be affected in a small if not massive way. The reason why all these companies are connected is because they were either acquired by, or founded by another corporation. Thus if one company is about to fail, the other partnering companies will step in to defend them in order to protect their own company.


There is no size of corporation which could make the company fail-proof.

Additionally, since there was no direct definition of failure then failure could be considered to be something as simple as lowering overall profits over a given stretch of time.

If you mean complete bankruptcy then there is always the argument that any and all corporation will eventually, one day, go bankrupt or be bought by another one in some way because this is the cycle of a corporation. At the end of the day, no one's going to want to buy McDonald's when a new corporation comes along that can make saturated-fat-free burgers. In the same way, no one will bother with any computer-related company, mentioned in the proposition's opening round, when the new hologram machines come along to utterly thwart and replace computing world and the world-wide web as we know them today.

There is no single corporation which cannot, and will not, potentially be replaced and driven out by new and more efficient competition one day. No matter how big they are in size nor how many important contacts they may have, any and all corporations can be utterly torn to shreds if a competitor comes with a far better, and perhaps cheaper, alternative to whatever good or service the big corporation specialises in.
Debate Round No. 1


The government has series of benefits for bailing companies out, and helping them from failing. Many bailouts are done with the aim of stopping not just the company from failing, but also saving the economy as well. For example, U.S. President W. Bush and Henry Paulson who is the Treasury Secretary planned a bailout of Citigroup and bear sterns, which initiated the Troubled Asset Relief Program (TARP). TARP was when money was loaned to financial institutions, this was done with fear that if these institutions failed they could deal huge damage to the entire sector of finance and plunder the entire economy. A lot of bailouts affect vital industries, which help a country function. For example, after the attack of 9/11, the government gave loans to airlines whose business had undergone problems by the attack, which threatened them with bankruptcy. Offering the bailout to this industry, the government accomplished its duty by providing critical services back to its citizens. Another benefit is that they can be the impetus of legislative reforms by giving attention to complications in regulation. For instance, the website ProPublica, the bailout in 1989 for the savings and loan industry forced President Bush to sign the Financial Institutions Reform Recovery and Enforcement Act. This put additional laws on these institutions, preventing any more institutions to fail. But not all bailouts cost money, according to MarketWatch, if a bailout is put forward with interest, such as the US government did with the banks in 2008; it may eventually make a small profit when the companies pay back its loan. So far, the government have profited approximately 13.5billion dollars.


It is not lacking in my knowledge bank that bailouts and corruption of governments by huge corporations can occur. What is, however, lacking in my knowledge is how on Earth that ensures that a corporation can potentially become too big to fail.

As mentioned in round one, an and all corporations, of any kind, have the potential to go bankrupt when their good, or service, is out-competed by a modern, more convenient, alternative of some kind. This has been seen with CDs replacing records and then being replaced by mp3 players, which then were replaced by iPods and then iPhones (and possibly a newer technology may come out one day).
If you grew up in the Walkman era you may well have thought that Walkman were a corporation becoming too big to fail but, as we have seen, they have been thwarted and are very close to failing indeed (they now converted to selling mp3 and mp4 players to save themselves:

There is no size of company that makes it fail-proof because actually nothing in life is fail-proof at all, other than God but even the existence of God is questionable.

In conclusion, there is no way that a corporation can become too large to fail because, quite simply, there is always room for failure in a corporation of any size.
Debate Round No. 2
1 comment has been posted on this debate.
Posted by wrichcirw 4 years ago
This was an iffy debate. The resolution and PRO's round #1 was not completely clear in exactly what the position was to be - interconnectivity was not stressed as any company being "too big to fail", merely that the network of the companies was quite fragile. In round #2, PRO clearly stated how some companies are providing "providing critical services back to its citizens," (key word, critical) and that such companies, if large enough like the oligopolistic airline industry, then yes, they become too big to fail.

CON argued that any company will eventually fail, but it could be that a company that was once too big to fail shrank in size and became obsolete, thus fulfilling the corporate cycle he seems to advocate and still upholding PRO's case.

In the end, CON's arguments were irrelevant to the resolution. Arguments PRO.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by 4567TME 4 years ago
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Total points awarded:24 
Reasons for voting decision: While I agree with Pro on the issue, I feel that Con gave the best debate, with convincing arguments. Pro spewed facts and figures, with no real life behind them, and some formatting errors.
Vote Placed by wrichcirw 4 years ago
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Total points awarded:30 
Reasons for voting decision: see comments. Short yet somehow still informative. Not bad for a first attempt, PRO.