The Companies Are on the Same Team
Also ESG, GPT-2 VCs and some crypto.
Why not. Here is an argument from Danielle Chaim that, when public companies are all owned by the same small group of big institutional shareholders, they evade taxes more. “A few recent empirical studies have ... found a significant positive correlation between tax avoidance and institutional ownership.” Chaim’s theory is basically that if one company evades taxes, it will get in trouble, because the tax authorities will notice. But if every company evades taxes, none of them will get in trouble, because the tax authorities will be so overwhelmed by all the evasion that they won’t be able to do anything about it:
This has the same sort of solving-the-prisoners’-dilemma form as the more usual, antitrust-related worries about index funds that we talk about around here: