[HN Gopher] An Economy of Overfed Middlemen
___________________________________________________________________
An Economy of Overfed Middlemen
Author : connor11528
Score : 155 points
Date : 2022-07-25 15:04 UTC (7 hours ago)
(HTM) web link (mattstoller.substack.com)
(TXT) w3m dump (mattstoller.substack.com)
| fleddr wrote:
| "The text of the Sherman Act bars 'monopolization,' so to write
| that one is trying to build firms that can 'monopolize' is, well,
| remarkable."
|
| Perhaps remarkable to say it out loud, but other than that not
| remarkable at all and totally logical.
|
| Any company in a free market is incentivized to combat their
| number one threat: competition. You can combat competition with a
| good product, but also more hostile methods like outgrowing,
| acquisitions, patents, lobbying, cartels, etc. Competition is an
| existential threat so the incentives are very strong. Being the
| only one playing nicely means your business is dead.
|
| Monopolization in tech is even more incentivized as it's often
| trivial for competition to copy your approach/product. So "good
| product" just doesn't cut it.
|
| The only remarkable thing is an almost complete lack of
| regulation, Sherman act or not. The article is full of examples
| of monopolies that should not exist. But they do exist.
| Regulation is non-existing or 10 years late.
| powvans wrote:
| This article feels like a poor retread of what Ben Thompson has
| been writing [0] and podcasting [1] about for at least the last 5
| years. Even the rough sketch diagrams feel like a poor copy of
| what Ben does at Stratechery. The conclusion that "if we just...
| <do something>" is vague, reductionist, and hand wavy. These
| aren't simple problems and the old antitrust tools weren't
| designed for monopolists who focus on the demand side rather than
| the supply side.
|
| [0] https://stratechery.com/aggregation-theory/
|
| [1] https://exponent.fm/
| Centigonal wrote:
| Everyone from Sam Altman to Peter Thiel has been talking about
| this for years. Capitalists are very straightforward about this -
| if you want to capture value, find a way to plant your flag in
| some emerging market and get a monopoly on one or more parts of
| the value chain. Marketplace operators are especially attractive
| to investors, because the financials are really pretty - the
| marketplace provider doesn't own significant assets, only pays
| for marketplace development costs and sales/marketing, and yet it
| can levy a tax on a potentially very large market.
|
| Uber, Lyft, Etsy, Doordash, Postmates, Shopify, Spotify, Yelp,
| Datarade, G2, Capterra, Turo - all are marketplace providers.
| They don't _make a thing._ they make the thing that lets a much
| larger class of thing-makers get in touch with the thing-buyers.
|
| The fervor for marketplace providers has gotten so intense that
| we're seeing more and more niche businesses get funded, e.g.
| https://swimply.com/
|
| Edit: ... and don't get me started on how companies (ab)use the
| 1099 designation to turn traditionally asset-heavy businesses
| into marketplace providers, generating a lot of paper value while
| not really innovating in terms of how the service is actually
| rendered. Looking at you, Arise!
| vsareto wrote:
| They do some organizing of information via their apps, which
| has a tangible user experience (plus the apps themselves are
| definitely a thing they built). Building a good marketplace is
| also no small feat.
|
| In concept, they are all useful abstractions over the worst
| case scenario: individuals only finding and talking with other
| individuals to get goods or services. In practice, there are
| definitely abuses which come down to ineffective regulation.
| pydry wrote:
| >Building a good marketplace is also no small feat.
|
| Nope, but it's lavishly overcompensated and starved of
| competition for the markets who manage to get the network
| effect going.
|
| There is no really effective regulation to ameliorate this
| effect either.
|
| Wouldnt need much though. If, say, e.g. airbnb simply werent
| able to enforce parts of their ToS around scraping/contacting
| users then it would make the market vastly less
| dysfunctional.
| Centigonal wrote:
| Not saying what they're doing isn't challenging or valuable.
| Like pydry said, it's a business model with a cost/benefit
| asymmetry - if it succeeds, you get a nice little monopoly
| that's difficult to disrupt. That makes it attractive to
| investors and very sticky, which means we'll see more and
| more of them pop up unless something changes.
| akudha wrote:
| Capterra? Is that site really that useful practically?
| clairity wrote:
| > "Everyone...Peter Thiel..."
|
| no, not this fake thought leader. business school literally
| teaches cornering markets (in strategy, but also marketing),
| and has for decades before those guys were even born. they
| literally recycled this information and presented it as if they
| were geniuses who came up with this miraculous approach all by
| themselves.
| Centigonal wrote:
| He's just the guy I heard say it. Unfortunately, John
| Rockefeller's estate and HBS don't put as much effort into
| marketing to startuppy-minded millenials in software like
| myself.
|
| Not trying to endorse Peter Thiel's opinions or those of or
| anyone else in that mileau. I'm saying the folks funding all
| the tech companies have been using this playbook for decades.
| clairity wrote:
| and that's why i commented. thiel is an idle opportunist,
| not an innovator or thought leader, and should be
| disregarded in such confines.
| int_19h wrote:
| Thiel didn't claim to have invented this strategy. The
| reason why people associate him with monopolies is
| because he claimed that they're better _for the
| consumers_. And he wasn 't the first to make that
| argument, either - it's straight from Bork's "The
| Antitrust Paradox" - Thiel just happened to be the most
| prominent "big tech" voice who openly embraced this
| notion.
| clairity wrote:
| he was one of the few because the idea that monopolies
| were good for consumers is about a 5th grader's level of
| thinking. in a perfect world where monopolies serve a
| single, narrow segment, don't overreach into adjacent
| markets or sociopolitics, and there's no general
| uncertainty or strife, you might argue they'd be a more
| efficient than multiple market participants, but we live
| in a dynamic and ever-changing world where that kind of
| thinking is laughably simplistic. monopolists can't
| resist distorting markets for their own benefit.
| softwaredoug wrote:
| The problem is users don't necessarily want a fractured market.
| It's convenient to have one vendor. In the short term, customers
| value the simplicity of having just one search engine or
| e-commerce experience. They don't think about the long term harms
| to them / the economy.
| clairity wrote:
| customers don't all want the same single vendor though, as we
| have varying needs (outside of true commodities).
| bediger4000 wrote:
| Yeah. Tell that to Microsoft
| asdff wrote:
| Specialized vendors usually deliver better products than
| generalist vendors though because its simply harder to have
| expertise in all domains than a fewer number.
| flappyeagle wrote:
| computers change that to a large degree - your youtube is
| different than my youtube... but it's all youtube.
| bediger4000 wrote:
| If we didn't da anything about Microsoft ca 2000, we absolutely
| can't do anything about what Stoller writes about.
|
| Do we even know what Stoller's funding is? Propa... Material like
| this appeared around 1996 and continued to surface all through
| the Microsoft trial
| babyshake wrote:
| It would be quite ironic if Microsoft was funding "Google is a
| monopoly" research.
| bediger4000 wrote:
| But not out of character, or out of the question.
| [deleted]
| semanticjudo wrote:
| Brokers (what the author calls "middlemen") have existed for ages
| and served all sorts of purposes in all sorts of economic
| activities. They serve a specific and valuable function in the
| economy.
|
| The author muddles the point by bringing this into the equation.
| The core, valid issue raised is monopoly power. Which will
| naturally be the end goal of any enterprise. It is governments
| job to bring reasonable power to bear to prevent monopolies. Ours
| is failing to do this due to crony capitalism - all of the
| benefits both sides of the political aisle reap by maintaining
| the status quo.
| effingwewt wrote:
| taffronaut wrote:
| I respectfully disagree. Brokers are a subset of middlemen. In
| many industries the role of a broker is well-defined and often
| regulated. A middleman can be a broker, an agent, a
| facilitator, price comparison site, wholesaler or any other
| intermediary mechanism. For organisations which seek to own all
| aspects of the intermediary space, and with a generally opaque
| representation of benefit to both suppliers and clients, the
| use of the term middleman seems more appropriate.
| AtlasBarfed wrote:
| Almost all markets are now monopoly, duopoly, or cartel. Has been
| for a while.
|
| It's gigantic detriment to innovation, unemployment, wage
| suppression, prices.
|
| The end state of unregulated real world free markets is monopoly,
| because of the ability to establish market barriers, extract
| subsidies, state-level actor manipulation, dumping.
|
| Antitrust is dead in the US. Cartel economics is part of the
| oligarchical political control and the formalized power base of
| the rich.
|
| And economists and economics were puppeted on TV, think tanks,
| parroting the free market religion to enable this.
|
| And as part of this, we couldn't do anything (and still can't)
| about global warming. This will possibly doom us as a
| civilization.
| edmcnulty101 wrote:
| One thing we have to ask is the monopolization the problem??
|
| Do we want to break monopoly up in favor of a bunch of possibly
| shittier products?
|
| The real problem It's not the monopoly it's the Monopoly tax.
| biorach wrote:
| There's a large body of economic literature arguing that
| competition breeds efficiency and better service. Granted it's
| only starting to grapple with the question of how to regulate
| the new economy - c.f. Lina Khan's paper on Amazon which made
| quite an impression [1]
|
| So it's not clear that breaking up a digital marketplace
| monopoly would result in shittier products, tho I agree that
| the theory is less clear cut than in the case of more
| traditional businesses.
|
| [1]
| https://web.archive.org/web/20170405144903/http://www.yalela...
| kqr wrote:
| This is one of those weird things where _in principle_ , a
| monopoly should be both interested in providing the best
| possible service (to keep their position indefinitely, even
| through technology shifts), and in a unique position to
| invest in research to make it so (under competition, it's
| harder to invest in research.)
|
| In practise, that's not what happens.
| arrosenberg wrote:
| That's not even true in principle. A monopoly's interest is
| in moatbuilding and maintaining their monopoly. If service
| and research achieve that, then fine, but if they don't
| that's also fine.
| igorkraw wrote:
| Why would a monopoly be interested in providing the near
| possible service? They can simply lobby to make upstarts
| impossible, or buy them, or bleed them dry with localised
| dumping prices, or steal all of their best ideas given they
| have more resources. All of these have much higher margins.
|
| It's not a "weird thing" it's the inherent reason why anti
| trust laws and regulations are required for _efficient_
| markets, and why rent seekers always argue for _free_
| markets
| pessimizer wrote:
| > One thing we have to ask is the monopolization the problem??
|
| It's a good point. My problem with monopolies is that they
| minimize risk and maximize reward, basically becoming a tax
| authority. Once you become a monopoly, you should graduate to
| nationalization.
| akira2501 wrote:
| What this viewpoint always misses is the labor market. That's a
| real market with real consequences, and when monopolies roll up
| entire industries, that's market power that gets used _against_
| workers and their wages.
|
| I don't think it's worth ignoring that or the loss in real
| innovations in the name of being deferential to established
| business and the imagined value of the quality products they
| create.
| danaris wrote:
| It doesn't matter how good at what they do a particular company
| is; we still don't let them take over everything.
|
| If we were to be organizing our economy based on what is
| maximally efficient, it would be much more effective to do so
| with the government in charge...but somehow, the people who
| talk about letting one efficient company take over everything
| never seem to think that letting the government do the same
| thing, but without taking massive profits, would be good.
| eli_gottlieb wrote:
| If a monopolist is efficient, then nationalization is
| efficient. Break them up or seize them.
| domador wrote:
| Not all monopolists are equally efficient at managing their
| monopolies. Especially monopolies that can bail themselves
| out by forcing people to subsidize their losses.
| eli_gottlieb wrote:
| I agree, but I'm also making a point: a truly _natural_
| monopoly, one created by circumstances or structural
| factors, doesn 't really require a monopolist, per se. This
| has been the traditional argument for state ownership or
| heavy regulation of utility companies, for instance.
| [deleted]
| AnimalMuppet wrote:
| That does not follow. "The monopolist can do this
| efficiently" != "the government can do this efficiently". In
| particular, the monopolist has given evidence of knowing how
| to run that operation well. The government has given no such
| evidence.
|
| I'm not a fan of monopolies, but your position is flawed.
| pessimizer wrote:
| The monopolist is just some asshole with advisors. If the
| government can't hire advisors, shut it down, it's
| pointless.
| anigbrowl wrote:
| The monopolist isn't a person per se, unless you imagine
| Jeff Bezos micromanaged every aspect of Amazon.
|
| 'Run well' like 'efficiently' is up for debate. Amazon is
| efficient because of its distribution model and allegedly
| because it exploits its workers to some degree. Many labor
| practices would be incompatible with standards of
| government employment, for the good reason that government
| should uphold the very labor standards it extols to the
| market. So if Amazon's retail distribution were
| nationalized, either it would run less efficiently or we'd
| have to admit that it's profitability depends on practices
| many consider unsavory or unethical.
|
| But let's take ethics out of the equation and suppose you
| have a highly efficient operation run entirely by robots,
| which is also a monopoly. In a competitive environment
| margins should fall within the range of normal profits, but
| if it's a monopoly then the owner can continue to extract
| economic rents and you're essentially back to landlordism.
| In that case there isn't a good argument against
| nationalization or jacking the marginal tax rate sky high.
| carschno wrote:
| How do you come to conclude that Organisation A
| (monopolist) will magically be less good than Organisation
| A (owned by the state)? If the same organisation is
| profitable while but state-owned, it could also be an
| indicator that it's just not operating in a legit way.
|
| Note: I think you've also been confusing government and
| state, but I assume that was not intentionally.
| AnimalMuppet wrote:
| > Note: I think you've also been confusing government and
| state, but I assume that was not intentionally.
|
| Not intentionally, no. Given that the context was
| nationalization, what in your view is the difference
| between government and state?
| carschno wrote:
| Ideally, a government (temporally) "steers" a state,
| which, again ideally, would be the property of its
| inhabitants.
| bryanrasmussen wrote:
| If we go from a generic concept of monopoly as
| consolidation of power instead of a specific instance of
| monopoly - this company has consolidated power - then it
| follows that if consolidation of power is more efficient we
| should just consolidate power.
|
| But sure, if it's specific instances of consolidation that
| are more efficient then you are correct, the specific
| company has shown it can do it efficiently and thus it does
| not follow that consolidation with the government would be
| efficient.
|
| but if you have a situation that what determines if a
| monopoly is efficient is that it is a monopoly and controls
| its industry then it seems we have just in a round about
| way gotten back to any consolidation of power is efficient
| and the government should do it. Unless you can show
| inefficient consolidation of power that is inefficient in
| some way other than by losing the power then it seems the
| argument for nationalization is back on.
|
| on edit: on the other hand if you can show an inefficient
| consolidation of power, like consolidation of majority of
| shopping through one portal that is yet unable to keep
| counterfeit products out, then it argues that inefficient
| consolidation of power should be broken up because it's
| inefficiencies will not be solved as long as the power is
| consolidated and competition will hopefully help.
| datavirtue wrote:
| Monopolists are non-representative governments.
| rahimnathwani wrote:
| Middlemen (e.g. wholesalers and retailers) serve a valuable
| function.
|
| Imagine each consumer having to maintain relationships with
| hundreds of factory owners and tens of farmers.
| UweSchmidt wrote:
| The internet was supposed to clear out all the middlemen. The
| websites consumers and factories use should be completely
| commodified and under strong competition, and with lots of
| innovation, like in the early days.
|
| Very disappointing.
| rahimnathwani wrote:
| E-commerce isn't just about websites.
|
| If I buy a charging cord from a factory owner, how long
| before I have it in my hand? And how much will shipping cost?
|
| The fact that I can order a charging cord (or 10 different
| ones from 10 different manufacturers) and have them delivered
| tomorrow _is_ innovation.
| UweSchmidt wrote:
| Market forces on a commodified, non-monopolized playing
| field should come up with all that innovation and bring us
| that charging cord faster and cheaper, and/or through a
| wider variety of curated market places and organic charging
| cord communities.
| rahimnathwani wrote:
| "organic charging cord communities"
|
| I honestly cannot tell whether you're joking.
| jollyllama wrote:
| >Imagine each consumer having to maintain relationships with
| ... tens of farmers
|
| Farmers' markets are great.
| dominotw wrote:
| here in chicago most of them aren't even farmers. They are
| just middlemen.
| skippyboxedhero wrote:
| It turns out manufacturing and distribution aren't the same
| business (food is a perfect example, there are used to be
| multiple layers of wholesalers, supermarkets took that all
| away...if you take them away, you get the layers of
| wholesalers...I will also say, farmer's markets aren't as
| clean, no-one today knows how unclean food used to be
| before supermarkets but that is another major reason why
| they exist).
|
| You would have thought that a former policymaker/lobbyist
| would have known better than the market...he went to
| Harvard you known. But it turns out that there is a reason
| why businesses have been organized this way for the past
| three centuries.
| jeromegv wrote:
| Somehow people expect to buy straight from the farmers at
| the farmers market located in the downtown of a large city,
| ignoring the fact that the farmers do need to.. farm their
| land. Traveling with their goods back and forth within the
| city isn't really an efficient use of their time.
| dominotw wrote:
| well if its called 'farmers market' then that's the
| assumption. Should be called 'random market' otherwise.
| rahimnathwani wrote:
| I grew up near a 'random' fresh produce market called
| 'Balham market'. It's since been renamed 'Hildreth Street
| Market' and, according to Time Out, it's "blossoming into
| a foodie's paradise".
| [deleted]
| jasode wrote:
| _> Farmers' markets are great._
|
| Fyi if you didn't already know... the farmers' markets are
| themselves a type of middlemen. (At least every one I've
| shopped at in the USA.)
|
| The farmers' market rents out the booth spaces to vendors
| (farmers). It's a real-world "platform" to bring together
| buyers and sellers. The farmers' cost to rent the space is
| embedded into the prices the consumers pay.
|
| A true individual relationship with a farmer would be
| something like driving to Joel Salatin's Polyface Farms and
| buying broiler chickens directly from him. This bypasses the
| middlemen of farmers' markets.
| rcoder wrote:
| We get about 2/3rds of our produce from a CSA (community-
| supported agriculture) share each week. The farmer drops
| off a load of whatever's ready to eat that week, and the
| members show up and take home their portion of what's
| there.
|
| From a "commercial marketplace" POV, it's basically a
| farce. There's no security -- it's literally just a folding
| table full of food on someone's porch with a clipboard to
| mark that you've taken your share for the week -- and the
| supply varies with the weather, crop conditions, and even
| mundane things like "the delivery truck broke down this
| week; shares will be small and/or late."
|
| And yet: everyone gets fed, the farmer gets paid, and it
| all ends up being price-competitive with a grocery store
| (much less a farmer's market).
|
| We also patronize a farmer's market for the "showcase"
| products that succeed there: big pretty loaves of bread,
| flats of fruit, etc. It's still cheaper than any high-end
| grocery store, the shelf life is amazing b/c it hasn't
| traveled 1000 miles on a truck, and we get to interact
| directly with the folks who make the food.
|
| The catch -- and it's a big one, in terms of classic
| microeconomic indicators -- is that we can't get an
| arbitrary amount of any chosen good at a competitive price
| right on the spot. Want peaches, but the stall sold out or
| bugs got this week's share? Sorry; hope cherries are okay
| this week. Don't like turnips or beets? Well, you might
| need to trade with someone who does, or find a new way to
| prepare 'em.
|
| There's also no "economy of scale" to speak of; the largest
| vendors are probably a couple of bakers who make
| O(thousands) of loaves per day, or the ranchers and
| fishermen who show up with coolers full of frozen steaks
| and fillets (b/c one cow or fishing boat load actually
| feeds a lot of people).
|
| Oh, and basically every farmer's market is also a localized
| barter economy. If you watch you can see the vendors
| roaming between stalls, offering trades and samples with
| other purveyors. After-hours, there are a _lot_ of boxes of
| food moving from one stall to another just before the left-
| overs get loaded back into the truck.
|
| So yes, strictly speaking these are all "marketplaces".
| It's a far cry though from Amazon swooping in to undercut
| the successful products on their own platform, or any major
| store chain selling shelf space to the highest bidder to
| create -- rather than respond to -- consumer demand.
|
| Obviously it doesn't work for every product or service, but
| there's definitely a space to accept a little less
| efficiency in favor of community-level resilience.
| jollyllama wrote:
| That's true. The farmers' market also acts as a advertising
| for that kind of direct relationship. Most of the vendors
| have cards with links or phone numbers where you can
| arrange that kind of thing, or even deliveries. I'd say the
| difference is the farmers' market allows for that, whereas
| at a grocery store I'm usually buying products labelled
| states away, if they even are from a farmer you could ever
| buy direct from at all.
| clairity wrote:
| > "...like driving to Joel Salatin's Polyface Farms and
| buying broiler chickens directly from him."
|
| reading _omnivore 's dilemma_ when it came out impulsively
| made me want to do that, but of course the impracticality
| of that quickly dawned on me. it's similarly why reading a
| book is a better than going and getting first-hand accounts
| for all our information. we've created socioeconomic
| structures for very good reasons, so we shouldn't want to
| burn them down for the tradeoffs, but rather we should
| address the negatives directly.
| zwieback wrote:
| Farmers' markets are great, yes, as entertainment for wealthy
| consumers with spare time, me being one of those. As a sales
| channel they are extremely inefficient and all told probably
| bad for the environment.
| 8note wrote:
| As a sales mechanism for CSA boxes they aren't too bad
|
| The efficiency is dependent on what you're measuring - food
| per land area? Food per energy input? Energy output per
| energy input?
| zwieback wrote:
| I was thinking of total energy (and maybe something like
| CO2) per food on the customer's table, including the
| waste that's produced.
| Veen wrote:
| But a marketplace is a classic example of a middle man. They
| facilitate sales between one group (the farmers) and another
| group (the buyers). The alternative is every buyer visiting
| every farm they want to make a purchase from. Farmers markets
| are a useful example of why middlemen often have a valuable
| role.
| uoaei wrote:
| Your comment is phrased as if you disagree with a
| conclusion which I don't believe was posed in the GP.
| jollyllama wrote:
| I never said they weren't. The takeaway would be middlemen
| can add different value. In this case the middleman is
| adding value by opening the door to direct relationships.
| So it's a gateway. In the case of a supermarket, they're
| adding something like distribution or logistics.
| anigbrowl wrote:
| Up to a point, yes. Utility tends to follow a sigmoid curve.
| kqr wrote:
| Consumers and producers can form cooperatives. They are
| middlemen, but not overfed ones.
| lotsofpulp wrote:
| I would struggle to define sub 5% profit margin retailers and
| wholesalers as overfed.
| asdff wrote:
| Poor starving Target investors with their stock being up
| 180% from 5 years ago
| 8note wrote:
| Are they middle men though? The stocks are basically
| unrelated to the business being done, unless the value
| gets so low that the underlying assets are worth more.
| JonShartwell wrote:
| The only difference between a manufacturer's online store and a
| retailer's from customer point of view is that the retailer
| sells multiple brands. I guess maybe there's some value if you
| want to browse different brands, but if you already know what
| you want then the middleman is not providing you any benefit at
| all over the manufacturer's online store.
|
| Brick and mortar is different because they're actually
| maintaining a space to show the items and bringing them close
| to you which is a benefit to the buyer.
| rahimnathwani wrote:
| "Brick and mortar is different"
|
| Not in the ways you describe:
|
| "because they're actually maintaining a space to show the
| items"
|
| This is similar to Amazon's site browse/search experience.
|
| "and bringing them close to you"
|
| This is similar to Amazon's fulfilment network.
| cwmma wrote:
| Yeah the point of the article is if you can monopolize that
| layer you can extract enormous rent, especially if you get
| yourself exempted from the law against kickbacks which pharmacy
| middlemen did.
| rahimnathwani wrote:
| How does Walmart (cited early in the article) fit into this
| overall narrative?
|
| As a consumer, I feel like Walmart operates in a competitive
| market. I go to Walmart even less often than I go to Target.
| cwmma wrote:
| Target and Walmart have lots of control over sellers
| (technically as a Monopsony), if the don't carry your
| product, it doesn't get to consumers.
|
| Also you may be lucky to have a choice, there are plenty of
| places where it's just a Walmart or target.
| paulryanrogers wrote:
| Sometimes I wonder if 'monopoly' in the US has become a no true
| Scotsman fallacy. The threshold of direct consumer harm is either
| so high or evidence requirements so onerous it's as if there is
| no more Sherman Antitrust Act. The monopolizing doesn't even have
| to be in a computer or layers of shell companies anymore.
| fleddr wrote:
| Same for when you read about two large companies merging,
| pending regulatory approval.
|
| My immediate thought: it's going be allowed. Regulator after 6
| months: it's allowed.
| wrnr wrote:
| It is the opinion of the EU Comission that monopolies are ok as
| long as they do not abuse their power and if they do they get
| slapped with a fine.
| sylvain_kerkour wrote:
| The passivity against monopolies has more to do with
| international competition and the fear of losing world
| domination.
| CivBase wrote:
| I think international economic competition has less to do
| with "world domination" and more to do with
|
| 1) having real international influence without resorting to
| military action
|
| 2) being resilient against international influence from
| others
|
| The trillion dollar question is how to effectively keep
| private businesses in check without sacrificing on those
| points.
| danaris wrote:
| Does it? Or does it have more to do with the massive industry
| capture of politics? Not to mention the right-wing ideology
| of, effectively, if you can make money doing it, and hide the
| negative effects from the public at least a little, you're a
| Real American Hero.
| WalterBright wrote:
| > and hide the negative effects from the public at least a
| little, you're a Real American Hero.
|
| Has there ever been a socialist operation (or any other
| operation) that didn't also do this?
|
| Like, say, Chernobyl?
| pessimizer wrote:
| Chernobyl wasn't hiding the negative effects of making
| money.
|
| edit: I think Communism, or at least Soviet communism, is
| as bad or worse for the environment as capitalism. The
| difference is that the benefits of Soviet environmental
| disasters flowed to the nation in general. The benefits
| under capitalism generally go to fewer people than I
| could fit in my bathroom.
| WalterBright wrote:
| Chernobyl hid the fact that the reactor was highly
| unsafe, because it was too expensive to fix it. So yeah,
| it was about money. Socialism is not immune to having
| things require a positive return on investment, and is
| hardly immune from forces that cause them to hide costs
| and risks.
|
| As for the benefits of capitalism, it's the only system
| that has managed to lift millions of poor people into the
| middle class and beyond.
| 8note wrote:
| I don't think there's such an easy attribution to
| capitalism. If anything, it's ignoring property rights
| when people become richer.
|
| If you consider the settler colonial projects like the
| USA, the wealth comes from ignoring the property
| ownership of the indigenous people, and then also the
| slavery, and the ignoring or intellectual property for
| inventions and arts.
|
| If you look at Europe, there's the extreme wealth
| transfer of living and shifting the Indian economy into
| Europe, along with you know, stealing the world's gold,
| silver, and other valuables.
|
| For more modern times, you also need to contend with
| unions and government regulations(including socialist
| policies), along with more wealth redistribution from
| things like the GI Bill. The people(and descendents) who
| benefited from the GI Bill are significantly wealthier
| than the people who didnt.
|
| Wealth and land redistribution, especially at the expense
| of poorer people gives a clearer direction for what has
| lifted people out of poverty.
| WalterBright wrote:
| What you posted is certainly the prevailing modern
| opinion. Looking a bit deeper, though:
|
| 1. if wealth comes from owning property, why weren't the
| indigenous people wealthy?
|
| 2. In South America, the indigenous people were pushed
| off their land, too. Why did South America remain poor up
| to the present?
|
| 3. How did Japan become such an incredible economic power
| despite having little land and no natural resources?
|
| 4. The American slave states were never particularly
| wealthy, and what wealth there was was erased in the
| Civil War. Literally burned to the ground. Slavery did
| not build the wealth in the US.
|
| 5. The GIs _earned_ the benefits from the GI bill. It is
| not wealth redistribution. They risked everything for
| yours and my freedoms.
|
| 6. The Spanish indeed took tons of gold & silver from S.
| America. Do you know what happened? Inflation! The same
| thing that happened after every gold rush. The reason is
| simple - gold is not wealth. Gold _represents_ wealth.
| pessimizer wrote:
| > Chernobyl hid the fact that the reactor was highly
| unsafe, because it was too expensive to fix it.
|
| And that is bad. But it is different.
|
| > As for the benefits of capitalism, it's the only system
| that has managed to lift millions of poor people into the
| middle class and beyond.
|
| That's because capitalists take credit for China. Take
| China out of it, and capitalism is a no-op.
| jcranmer wrote:
| So who was responsible for poverty reduction in the
| nineteenth century?
| WalterBright wrote:
| > But it is different.
|
| Nope. Even socialism has to run at a net surplus (i.e.
| profit) because you cannot subsidize _everything_.
| alehlopeh wrote:
| Look at what the Soviets did to whale populations. I
| don't think you can argue those benefits flowed to
| anyone.
| 93po wrote:
| This is like saying someone choked to death on celery
| once, therefore celery is just as bad for you as pork fat
| jmeister wrote:
| There are many progressives who've come around to favouring
| mega businesses over "mom-and-pop" for: higher wages,
| stabler jobs, easier enforcement of regulations..
|
| For example: Matt Yglesias
| turns0ut wrote:
| Especially in the NFT era of rug pulls. Globalization
| cannot run on fly by night grifters.
|
| Anarcho-syndicalists that argue for workers councils run
| by experts basically got that but it comes coupled to
| outdated story of ownership.
|
| In real terms the logistics and infrastructure are
| determined by experts but with the extra steps of getting
| validation from financiers who have no experience with
| the engineering methods, but their name is on some
| paperwork somewhere saying "they own that".
|
| I am cool with centralization effort to minimize
| duplication of effort. Not the kowtowing to some
| financier who lucked into money in the past in unrelated
| business, picking and choosing what I work on today as an
| engineer with nearly 30 years experience ranging from
| hardware design to kernel hacking, onto web app stacks
| with everyone else.
|
| The ownership story is political double speak and corrupt
| expropriation of agency; replacing pols has improved
| economic gains for public and flushed corruption:
| https://www.nber.org/papers/w29766
| fleddr wrote:
| True, the most progressive people (largely just optical)
| work for the largest neoliberal monopolists.
| danaris wrote:
| I guarantee you, there are plenty of totally real (not
| just optical), actually-progressive progressives who do
| not work for neoliberal monopolists.
|
| If the people you have seen spouting what seems like the
| most progressive rhetoric _do_ work at such places, that
| doesn 't mean they're representative of all people who
| believe in progressive ideology.
| specialist wrote:
| Then it becomes unclear where the state begins and the
| (mega) corporation(s) begins.
|
| I'm neither for or against this strategy. I only wish,
| quixotically, the misc belligerents in policy debates
| would be intellectually honest.
|
| It's ridiculous to use liberation theology terms, eg
| "freedom markets", when referring to Fortune 500
| corporations.
| danaris wrote:
| There are many people who have been steeped in our
| hypercapitalist society for decades and have simply
| accepted its premises as valid, regardless of their
| stated politics as a whole.
|
| It doesn't mean that the source of this ultimately deeply
| destructive ideology isn't the political right.
| pessimizer wrote:
| You must not have heard of "Walmart socialism" or have
| worked for a small-business tyrant.
|
| Scale and logistics are good. I think they should be
| managed by federation (and through regulation), but I'm
| sick of having bosses who see my salary (rationally) as
| something directly coming out of their bank account. I
| prefer a little indirection and mediation in the
| relationship.
|
| Efficiency is good for everyone. The more time and effort
| you save, the more time and effort you have to waste.
| There are scales that are ideal for particular
| businesses, and that scale doesn't always coincidentally
| coincide with the scale a small-business owner can
| handle. Business should be as big as real (not paper or
| regulatory) efficiencies can be found at, and against
| those efficiencies we should maximize the flexibility and
| ability to innovate of individual businesses and workers.
|
| Instead we just subsidize the biggest businesses most,
| and through legislation create false efficiencies to
| subsidize them even more (and guard them from any
| externalities.)
| danaris wrote:
| Efficiency is good.
|
| _Maximizing_ for efficiency is not. It leads to a
| variety of problems, including (but not limited to) a
| strong tendency toward consolidation of power in too few
| hands (thus leading to abuses), and fragile systems that
| break down when a shock comes (like we saw with the
| supply chain issues during the height of COVID
| lockdowns).
| WalterBright wrote:
| > our hypercapitalist society for decades
|
| The US has been turning away from free markets for at
| least a century now.
| corrral wrote:
| It is perhaps a relevant observation that "free market"
| and "capitalism" don't share a Wikipedia page.
| zeruch wrote:
| "Massive industry" is the applicable term. The scale of
| both the capture, and the middle man loss to a more
| parochial/regional model is terrifying to 'captains of
| industry' and their political minions.
| int_19h wrote:
| The passivity against monopolies in US is a well-documented
| consequence of a drastic reinterpretation of the historical
| justification for anti-trust legislation in 1980s, driven
| primarily by right-wing "free market" proponents (I'm putting
| that in quotes because any monopoly is the opposite of free
| market by its classic definition).
|
| https://en.wikipedia.org/wiki/The_Antitrust_Paradox
|
| Before then, things were very different. Here's an example of
| an anti-trust court case against a company selling shoes -
| read the court's rationale for applicability of regulation,
| and consider how many of them would apply to _any_ of the
| large tech companies today:
|
| https://supreme.justia.com/cases/federal/us/370/294/
| [deleted]
| pessimizer wrote:
| Nations aren't a real unit to anyone except for rubes. The
| reasons interests and nations roughly correlate is because
| the individuals who make a nation's laws and direct its
| spending are more likely to be financially entangled with the
| people who those laws affect and the people to which that
| spending is directed.
|
| They will also be financially entangled with elites in former
| colonies, and the operators of extractive industries in weak
| countries that depend on outside investments, and with
| everyone in the financial industry globally. They're also
| financially entangled with family members and friends.
|
| The only people anti-monopoly legislation helps are people
| who are less connected and less influential. The only place
| it will be supported (by the well-connected and influential)
| is in countries who are trying to protect domestic
| industries. Once the protectionism (or the nationalized
| industries) are destroyed, then monopoly becomes ok in time
| to get control over entire sectors of the economy and raise
| prices to maximize profit extraction.
|
| Any concern about whether the US is dominating the world or
| not is only practical. It's useless to sic the US against a
| country that is being protectionist or refuses to
| denationalize if the US doesn't have the strength to properly
| make the people who reside in those countries miserable
| enough to support the opposition.
| robertlagrant wrote:
| Are most monopolies not of government creation? Anything that
| has increasingly onerous regulations or other government
| requirements are the sorts of monopolies that need breaking.
|
| Any natural monopolies formed by just being really good at
| something and offering it at a low price are a waste of
| taxpayer money to try and disrupt.
| a-user-you-like wrote:
| Precisely. The regulatory environment in the US is
| astounding.
|
| People yell at Apple for being a monopoly but android exists
| and the consumers just don't care.
|
| Amazon tried to launch a line of phones and no one cared.
|
| If things were really so oppressive the consumers would
| demand something else but they just don't care.
| paulryanrogers wrote:
| Not all monopolies are natural. Those powerful enough to
| capture regulators are now a defacto government. The answer
| is not less regulation, it's a different kind to stop and
| reverse the consolidation of power.
|
| And benevolent monopolies can and do change over time.
| maerF0x0 wrote:
| I think that's why it's good that antitrust is more than just
| monopoly but also and other anticompetitive practices.
|
| I would like to see law begin to start with an implicit bias
| for the underdog, but unfortunately Citizens united and the
| general principle of money in politics means that larger
| entities will have disproportionate sway (due to Pareto
| principle of accrual).
| nickff wrote:
| The volume of law and regulation is a huge implicit subsidy
| to large corporations. The cost of compliance is challenging,
| and can be devastating to small-medium companies (which
| actually try to comply with the law). I think that getting
| rid of rules like the reporting on conflict minerals, (which
| don't seem to affect the ferocity or devastation in conflict
| regions,) which are numerous and surprisingly burdensome,
| would be very helpful.
| anamax wrote:
| Citizens United said that you and I have the same right to
| band together to engage in political speech as the New York
| Times.
| maerF0x0 wrote:
| Sure, and it should have said New York Times is not a
| person and therefore gets no say in any matter. The Pareto
| bit I mentioned means even if we band together they
| ultimately have disproportionate resources.
|
| It's employees / shareholders et al can vote how they like,
| but that's different than the New York Times (or Russia for
| that matter), swaying an election.
| anamax wrote:
| Zuckerberg has more resources than me.
|
| Not letting me get together with other people helps
| Zuckerberg.
|
| As far as the NYT goes, feel free to argue against the
| 1st Amendment. CU just says that the NYT isn't special,
| that the 1st applies to using tools, not organizations
| who have named themselves after said tools.
|
| Govt regulation always favors the well-heeled.
| maerF0x0 wrote:
| > Zuckerberg has more resources than me.
|
| Yes but there is are rules & caps for political
| contributions: https://www.fec.gov/help-candidates-and-
| committees/candidate...
|
| I'm not arguing against 1st, I'm arguing that a business
| (not a person) has speech or a 1st right (which people
| absolutely do), and that the net result of acting like
| they do is really hurting the citizens of America.
| arrosenberg wrote:
| That was the entire point of the Borkist/Chicago school
| movement. The capitalists knew they'd never be able to repeal
| those laws legislatively, so instead they changed its
| enforcement by winning the minds and wallets of the judiciary.
| Now they can consolidate as much as they want to, no judge will
| stop them and most lawyers won't even try.
| tomohawk wrote:
| Academic institutions are the most overfed middlemen. They've
| insinuated themselves into the ability to have a job in many
| fields.
|
| Has there ever been a winter that affects academic institutions?
| Ever been a need to cut back? Tighten the belt? They are like an
| overgrown jungle.
|
| They often peddle shoddy goods (degrees that will never pay off),
| to unsophisticated consumers (18 year olds and their parents).
| Any other industry would have laws and regulations attempting to
| protect the unwary, but somehow, only angels work in adademic
| institutions.
|
| They have choruses of shills (guidance councilers and others)
| telling anyone who will listen that if you don't go to college,
| your life will be ruined. See how indispensible they are?
|
| Can't afford it? Get a subsidized loan for which the institution
| has no skin in the game. Can't pay it off after? Not their fault!
|
| Institution needs more money? Just raise the rent.
| darth_avocado wrote:
| Without reading the article and just the headline, I thought this
| was going to be an article on economy that has a bloated amount
| of over paid middle management. Was very disappointed.
| skybrian wrote:
| I wonder about the "Google extracts enormous rents" bit. Yes, in
| the aggregate, Google is earning lots of money from advertisers,
| but for the average advertiser, how big is this cost, and
| compared to what? (Genuine question - I don't know a lot about
| advertising.)
|
| Also, given the anti-advertising mindset on Hacker News, it seems
| weird to get all that upset about advertisers paying too much?
| "Who will think of the advertisers," say people who have probably
| installed ad blockers.
| manmal wrote:
| I know a surgeon who invested EUR10k/month in Google ads for a
| while just to get a few patients per month. CPC was EUR10 or
| so. Absolutely nuts, you'd think. But one procedure nets him
| EUR8k, and he said that those ads are absolutely vital to him -
| without Google ads, his revenue suffered greatly. His campaign
| was setup wrong for a while and he immediately noticed because
| people stopped booking surgery with him.
| count wrote:
| This feels like he's copying Stratechery, down to the stick
| figure MS Paint diagrams (e.g. https://stratechery.com/2018/the-
| bill-gates-line/)
| adamrezich wrote:
| lots of blogs are like this though, using quick-and-dirty
| visually-accessible illustrations to convey ideas.
| carom wrote:
| Ah, that is a distinct style. Do you think they commissioned an
| artist to perform such an exact copy?
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