But then, most small businesses fail pretty quickly.
And that's precisely the advantage. It's an environment that is quick to cull out those that are managed poorly. TBTF businesses obviously aren't subject to the same kind of pressure, so incredibly bad habits can remain, especially if the government backs them when they fail. Centralization of wealth leads to the "all of your eggs in one basket" problem, which is obviously a very unsound strategy.
And we benefit greatly if wealth is hoarded by people who are great at making investment decisions.
Well there's your problem. Nobody is great at making investment decisions. White noise is a better and more stable investor than any strategy, and a large number of small businesses would bear a stronger resemblance to white noise than a concentrated power structure.
Software production is assumed to be a line function, but it is run like a staff function. -- Paul Licker