Please tell me about the ways to cheat the system that would become non-existent in LE-economy. Or greatly reduced. And I will probably be able to show you some new ones pretty soon.
Planned Obsolescence would be one of the most blatant- where products are designed to wear out sooner than they otherwise would so as to make you buy a new one. Pollution is another, where a business cuts it's expenses by externalizing costs- say, by dumping their waste in a river. Cutting their costs by hiring underpaid migrant labor is another, or by simply paying their workers as little as they can get away with. Anti competitive practices. Manipulation of government, as seen with our privatized prison industry.
Of course, many of these have solutions that could be implemented in a capitalist society. But due to the fact that that would run contrary to many vested interests, it's unlikely to see adoption. The big thing that my system does is prevent anyone from gaining too much power, whether that political power, economic power, whatever. There would be strict regulations on how large any individual enterprise could get.
Well, the huge thing is of course the fact that your argument about what prevents the adoption of countermeasures for all those problems is also to argument about what prevents implementation of your system; if there are interests in place manipulating government for profit (I don't really know much about the privatized prison industry, really, but in Poland there's like, half of all laws that are just bought by someone for some reason), there are the same interests stopping the adoption of system that would make it impossible to manipulate powers-that-are for the same profit.
That said, illegal practices like dumping waste and hiring illegal immigrants (who are pretty new concept, really) are not getting any more illegal in LE system; it's just that you are assuming that moving control divisions to LE and closer to actual companies allows for more efficient control. But I would say that's not obvious at all - corruption is a complicated thing, and it might turn out that corrupting people in your logistical enterprise is actually easier than doing the same with government officials. Especially with the LEs close to maximum size, which can not grow any bigger and thus lose the reason to actually keep fighting for the new markets.
What I mean is: people are running companies for some reasons. Being bored to death is not one of them, as far as I know; people may take it as hobby to run small firm writing computer games, but furniture factory is most likely being run by a person who wants something more tangible than satisfaction out of it. Some kind of profit must be actually delivered to company owners, or they will quit the business. And since there exists some kind of profit, it should be somewhat tied to the company results or size or something, otherwise most people will devolve to running tiny furniture workshop with two old many putting together tables from old wood; if there is no incentive to run major companies, there will be no major companies. And whatever the system, if there is incentive, there will be people trying to cut corners; this is the major problem. Whether there is money or some other form of incentive, it doesn't matter all that much in the long run.
@LoudWhispers - of course; I am really sleep-deprived, it seems, for such a mistake. ^^" Sorry!