This is essentially the story of tech companies across nearly every industry where they have come to dominate.
This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale. I think that many of the growing problems in society today are fundamentally attributable to the extreme concentration of wealth and power that modern tech enables.
There's a George Carlin bit about politicians. The punchline is "the problem isn't the politicians, it's the people." His point is that nothing emerges from a vaccuum.
Politicians are people just like everyone else, they're just responding to incentives created by a majority vote. Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services. If Carlin were alive, he'd say that the problem isn't the tech companies, it's their customers.
I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing. Personally, I've accepted that it's always going to be messy and chaotic, but a lot of good things are going to come out of it as well.
> There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
I strongly disagree. On the contrary, I see the arch of many technological advancements in that, in the beginning, they solve a crucial need, but then once they solve that problem they attempt to hijack the positive feedback systems of humans (e.g. addiction systems) to stay in power.
Consider the food industry. Many people were under pretty constant threat of starvation through much of human history. So in the 19th and 20th centuries we essentially solved that problem in the Western world with the modern food industry. But we didn't stop there. Once people had all they needed to eat, food companies had to figure out how to get them to eat more, and they were highly successful. Saying that much of modern food science is a net negative for humanity doesn't mean I think we should go back to being hunter gatherers, but at this point every new "innovation" in the industry is really just an attempt to try to get people to eat/drink more.
I think much of the modern Internet/Web has been on that "net negative" slide for at least the past 10 years. Are people at large to blame for this? In one sense, sure. But I have no problem laying the blame at tech leaders who are essentially in the role of drug dealers for much of the industry. I mean, sure, drug users are ultimately at fault too, but we look down pretty harshly at drug dealers for their role in the process.
End state of market economics leads to cartel and monopoly.
In tech this is done by controlling people's information and collecting their personal data
Combine the centralization with control and privacy intrusion with authoritarianism in government and you have a worse than 1984 future
It's all RIGHT THERE. Turnkey. Ready to go. And all the cultural institutions in government, the popular those of the ultra rich, the populist desperation of the poor, disappearance of the middle class, is leading to authoritarianism.
Just because Americans have an obesity problem doesn't make every food vendor a drug dealer. Come on, get real. Basically everything that is being sold can be abused by the user. Does that mean every vendor of anything is potentially a bad actor? I believe you are exaggregating. BTW, I virtually never thought about Thiel when I ordered a Pizza. Is there a reason why you drag the owners into this? It basically sounds like you are antagonising everyone above your wage-class. I don't get it.
It’s by degrees right? You can make a business that treats people as well as you can manage while feeding yourself, but almost anybody will want more than that, and some people want way more than that for a variety of social and innate reasons. Eventually you cross some arbitrary threshold where you’re doing, or at least enabling, really awful mistreatment of people and you use the level of indirection you have or some ideology or some excuse to justify it, but that’s when it’s a problem. People above the parent commentor’s wage class just so happen to also be the people most susceptible to this process, which is why they’re in a high position in the first place. Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position. You don’t owe them kindness that they won’t return.
>Also, not that this is particularly important, but many or most of them (the extremely rich) dislike and look down on you because they need to in order to feel alright about their position
The rich don't give a shit. They're comfortable in their position. It's the uppity doctors, lawyers, techies, and everyone else with an office job that need to feel like they're better than the plumber, line cook and brick layer.
Every idiot who lives in a good school district with manicured lawns and reads the nutrition facts on the frozen dinner they're buying at Target thinks they're saving the world by telling the politicians to ban fireworks and menthols.
> The rich don't give a shit. They're comfortable in their position.
I don’t get why you say this. Almost everyone has a need to feel like a good person, justified, etc, and the easiest way for someone with a several hundred million plus net worth to feel that way is to believe that they earned it, are special and that normal people are too stupid to do the same thing. There’s lots of other options for justifications but none of them are particularly flattering to the have-nots.
I think OP's point wasn't so much about the fundamental services being bad or harmful to most of their users, but rather about the over-optimization of every single tech service toward finding ways to build on people's bad instincts and decision-making to squeeze just a penny more out of them.
When no ceiling is imposed, the natural state of business is to consume all oxygen.
It doesn’t matter that you don’t know who Peter Theil is when you buy a pizza. It matters that he somehow makes money from that pizza and if he can, he will extract more value than the pizza guy.
The pizza guy had 30 years to conquer the internet. They could have hired a coder to do their online order website. 12 years later, they could have hired a coder to create an ordering app. Most of them didn't, because they weren't willing to part with the money. Now, Lieferando takes a 10% cut from every order because they created infrastructure the customer actually wants to use. What is so bad about it? You can only cut out the middle man if the vendor is going with the times.
Or they can just make pizza. Meanwhile, I could get a $11 pie delivered with a phone call 20 years ago, and now I’m paying $35 for some stupid cloud app to do the same thing.
It's not black and white, but what you're saying sounds like "just because users have an attention problem doesn't make every social media app an attention grabber"
I mean, companies optimise for profits and at some point people fall for it in excess which is the point OP made.
It kinda makes sense, because the means the companies employ are psychologically advanced plays on people who don't know the spelling of psychology.
I'm probably manipulated into scrolling more than I wanted to or buying more than I wanted to on an everyday basis.
> Does that mean every vendor of anything is potentially a bad actor
Yes, of course they are. Left unregulated they will form cartels. As Adam Smith said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."
They will try to raise barriers to entry as well, to limit competition. They will try to increase sales by many means.
They may be ethical enough not to do all that, but the potential is definitely there.
Are cartels inherently unethical? The US government approves of and protects certain cartels (e.g. unions, hospital systems, defense contractors).
If anything, cartels thrive under heavily regulated and dirigiste economic systems, where as in an unregulated market a cartel would eventually lose to a competitor or succumb to infighting.
We don’t have to go back to hunter gatherer societies, just do some antitrust. I dislike the commentary that any pushback against tech companies means you’re a Luddite
Put a cap on company size. No organisation can be worth more than (say) a few hundred million. You can still make big and complex things but it'll have to be several small(er) companies working in concert, which is already kind of how massive companies work internally anyway. Less efficient, maybe, but I am not entirely convinced that huge companies hoovering up any attempt at competition leads to efficiencies in the long run. And the more value that can be extracted by smaller players, the more that ends up in the hands of humans rather than pooling R the top. Maybe have a credit for capital outlay so building and operating a factory is better than building a financial war chest, and a credit for non-executive salaries so paying your workers increases your company's headroom.
Capital gains tax that increases progressively with gains, and decreases progressively with duration i.e. incentivize significant investors to create long term value instead of chasing quick exits.
Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition.
Edit: I wasn't accusing everyone who is critical of tech of being a Luddite. The attitude that nearly every tech company is a net negative for society goes quite a bit beyond criticism.
Where does the article mention barriers to entry? My reading is that that the consolidation is due to venture capital moving investment to other areas. Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This is the definition of competition according to Wikipedia: "Competition is a scenario where different economic firms are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place."
Yes, sounds like competition to me. Network effects are not anti-competitive.
> Anyone who wants to start a new food delivery app is still free to do so, as long as they can find funding.
This argument is meaningless because you can always make it. There's a quasi-monopoly? Yeah but you're still allowed to make a new company so it's not really a problem is it? You'll fail, unless you're backed by even more powerful venture capital, but I don't care about that because I get to keep making the argument that it's a free market.
The reality is that the only way you can compete in this market is to already be a billion dollar company, or have the backing of one. That's not a free market by any reasonable definition.
> Anti-trust for an industry where there are at least five companies doing well in any given space? That's not called a monopoly, it's called competition
You need to be completely out of touch with reality to read an article on 5 companies dominating a global market and your take from that info is that there are no anticompetitive practices because 5 is more than 1.
In the IO literature it would be expected that five companies of vaguely similar size in oligopolistic competition (say Cournot competition for simplicity) would be pretty close to the equilibrium of a perfectly competitive market.
I don't think that simply the ability to perform a task is sufficient for competition. It could still be impossible for a newcomer to compete with established corps' marketing budget and economies of scale.
The point is who cares. Getting a burrito delivered is a pointless luxury service that no one actually needs. Instead of complaining about competition, just stop wasting money on it.
You don't care. That's fine. It's not like there is a retirement to be informed before commenting. Sit this one out and let everyone who do express their concerns.
If five companies competing is anti-competitive, then how many competitors does it take to suddenly become competitive and why? What is the significance of this larger-than-five number? Is it the same across industries? How do you derive it?
This seems to rest on the mistaken belief that a corollary of monopolies being bad is that more competition is always better than less competition. If everyone was a competitor in the restaurant food delivery market we'd all starve to death as no one would be growing food. An efficient economy wouldn't waste resources competing over less important things like restaurant food delivery over something more beneficial.
Perhaps the issue isn't whether there is a specific number of companies. It seems to me that there is a competition problem when companies behave in a way that is harmful/disliked/bad but no one steps in to provide an alternative because they can't compete with established marketing, economies of scale, network effects, etc.
"completely out of touch" is definitely an exaggregationg. Besides, as if competition would really increase quality. Where I dwell, we have around 3 active delivery services. Only 1 of them has an app with useable UX, icnluding accessibility. Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
> "completely out of touch" is definitely an exaggregationg.
Is it, though? I mean, can you present a coherent argument supporting the idea that a global market being dominated by 5 multinational corporations does not flag a risk of anticompetitive practices?
> Competition? Meh. What for? So that I can watch the smaller guys blunder their way to the top?
Is this what you have to offer to refute the idea you're completely out of touch?
If by "coherent" you mean the Webster definition then yeah, anyone can.
If by coherent you mean "using only facts and opinions that I accept at face value within my world view" then no.
Personally, I think 5 is way too little. But there are probably some markets for various products and services where 5 is fine. I don't think the number matters so much as that there be potential for a long tail of upstarts who could potentially displace a big player quickly. Whether 95% of the market is captured 2 or 22 players doesn't matter, they gotta know that someone is waiting to take their place if they screw up.
Now imagine you live in one of the other 190 countries of the world who do not or no longer have significant players in the industry because they were crushed by those five foreign companies. It's not competition when the wealth and power is so disproportionately held by the same people in the same places.
China (basically) only has didi. Not much the USA can say here.
Southeast has Grab, and within each country there are at least 2 local competitors (Be, GoJek, Bolt, Line Man, Bluebird, etc). I believe Doordash just bought Deliveroo, making it the only American competitor in SEA.
In Europe, the main players are local food panda / Delivery hero and Just Eat.
India's winning food delivery is Swiggy.
What countries have both the talent to build a food delivery app and the USA is the dominant player?
Every country has the talent, software development isn't some esoteric knowledge. But even if you imagine that only people in developed countries are capable of writing software, there is Australia, New Zealand, Canada and Taiwan for starters.
I don't think it makes sense to focus on the US when three of the five companies in the article are from Germany, Netherlands and China. The problem is not America per se, it's the pattern of large and often (but not always) foreign companies extracting wealth from what used to be hyper-local operations.
> What countries have both the talent to build a food delivery app
It's not about "talent" these are utterly pedestrian apps that anyone mediocre team can fart out in a quick amount of time. It's about capital for massive scale, massive advertising, literal VC-subsidised dumping, takeovers of the competition, etc.
Sure, go to each country and check what food delivery companies operate in them, get a list of companies operating in the market that are not controlled by the big 5 mentioned in the article.
In Europe there were a few companies operating in the sector which were taken over by these global companies. I recall the Glovo takeover by Delivery Hero. You mention Foodpanda but you seem to be unaware this is a brand from Delivery Hero, and Just Eat is a Prosus company too.
> What countries have both the talent to build a food delivery app and the USA is the dominant player?
I'm baffled by your comment. Do you believe only the US has "the talent" to put together a food delivery business? Because even if you ignore the fact that 2 out of the 5 dominant players are not US companies, you need to be way out of touch with the reality of both the technology side and business side.
I work at Grab (and ex-Yelp). I am very familiar with FoodPanda and their owners as they are a direct competitor to my employer. I literally work for one of the non-American "local" food delivery services. But within out region, there are reasons we don't have technology offices in every country we operate in and we have tech offices in countries we don't operate in.
There are also reasons that we continue to exist while our competition pulls out of the region. There are also many reasons why hyper-local delivery services aren't able to compete with global or regional winners: Talent, access to capital, and TAM are big parts of that equation.
If someone that works for a non-american food delivery service provider is out of touch, I wonder what your credentials are that puts you in touch.
Also, in the blog, 2 of the 5 players ARE American (Doordash and Uber). The other 3 are European and Chinese.
As a software engineer in the US, I like that the US sucks up money from the rest of the world, that’s why my dollar goes so far when I travel and why I can retire in a non-reserve-currency country for cheap
Do you not feel as though that's incredibly anti-social? It's a very zero-sum "I'd prefer if things were better for me in direct proportion to how much worse they'll be for '_others_'"
There’s such a thing as collusion - convenient way to claim “we’re not a monopoly, there’s at least 4 more competitors” when behind the scenes they’re all talking and agreeing in price fixing, limiting offer, blocking other competitors.
That is known as a "cartel," which is also prosecutable under the Sherman Act. It applies to not just monopolies. But that doesn't seem to be the case here.
Carlin's actual view is a lot more nuanced than that. Big Tech (along with Walmart, Visa and more) have gotten to where they are by employing illegal business practices such as price discrimination and exclusive dealing. These tactics laid the groundwork for the mass mergers and rollups and the monopolies and oligopolies that dominate America today. The laws on the books which prohibit them, like Robinson-Patman and the Clayton Act, have gone largely unenforced since Reagan. Software sped up how quickly businesses can exploit these criminal tactics but this has become a problem across all sectors of the economy.
This shocking degree of negligence has required complicity from both political parties, but there's a deeper issue which is that this stuff is just too arcane to be linked meaningfully to a popular vote in today's democracy. We're talking about a nation where 1 in 5 people are now illiterate and that number is rising. There are two parties and a vanishingly small number of candidates presented to them every couple of years, meanwhile the media bombards them with a dozen supposed crises every day. This system is never going to produce a consensus that the most important priority is enforcing some law from 1914. Popular sentiment is more likely to be expressed through the rise of more guys like Luigi Mangione.
The ever-increasing flood of information (crises, as you call them) will, I believe, eventually become the downfall of our political system. There is already so much to read in a single day that you probably couldn't consume it all in your remaining lifetime if you tried. LLMs will only make this worse. Eventually, super-powers—whether political or economic—will send out so much misinformation about everything that no one can really follow it or distinguish truth from falsehood. People will simply stop participating in the global conversation, and their votes will become obsolete and guided by the most intruiging stories.
I generally agree with your point, but would like to mention in my opinion Amazon (not AWS) makes billions because they've captured the market and prevent any meaningful competition from arising due to their "Fair Pricing" policy rules. I'll be happy when there are meaningful alternatives to Amazon that don't have inflated prices due to price parity which have an excessive return cost built in...
Lobbyists muddy the incentive waters a bit when it comes to politics.
But I agree with your conclusion. I don't think there are many truly net negative companies/sectors/ideas that aren't either dead or on their way out -- but I'm sure you'd agree we should still hold tech accountable and optimize for our own benefit.
Btw, as a lifelong Carlin fan, I find myself asking what he would think pretty often :)
Carlin was a true philosopher. I find myself disagreeing with him more these days than when I was younger and angrier, but I still find him endlessly entertaining.
Tech companies are not like other companies because they can trivially create vendor lock-in without any geographic constraints on where the customers are.
In fact, it's harder to avoid vendor-lock in in tech; it takes extra work to open things up, possibly a lot of extra work.
Even a well-intentioned open-source program can garner a user base which can't easily migrate off it.
Then let's use regulation to flip that around, and put the onus on the party that
a) is making money off it
b) has a vested interest in increasing lock-in
c) is a singular entity, not a dispersed set of individuals
d) is doing this as part of something specific and organized, rather than just trying to go about their daily lives, buying an orange here and a smartphone there
My theory is that is what is latent in the terrain of human psychology is a propensity to view misconceptions about which problem it is, as evidence there isn't one. When I stop to think about it, I realize that the misconceptions are evidence there is.
With that in mind: in what way should we terraform the latent terrain of human psychology to fix this problem? Because breaking up the tech companies seems like a way, but you seem to have a different one in mind.
I think there's a power dynamic that it seems like you are ignoring, that big companies take advantage of. Amazon gets cheap goods to your doorstep, and removes all competition while doing it. You think those goods are going to stay cheap,i don't. This is a playbook that wallmarts followed for years. Amazon also gets sellers, by selling amazon versions of their products. Google makes billions by showing you ads, they got you there with free services, but now they enshittify.
>There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing
I think my concern is not going back to the bad old gilded age days, where wealth inequality lead to most humans having a terrible life while a few had a great life.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions.
The main issue is that in tech and politics it is a small group of humans making collective decisions for all.
Carlin's comedy peaked during near the era that I think most consider the Golden Age of America. Times have immeasurably changed since then.
On the tech side of things Google has recently been hit by multiple anti-trust lawsuits, and lost them all. That's perhaps even less telling than the evidence presented. They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
Politics has become similar. Politicians have become way better at their jobs in modern times than in Carlin's era. Their "job" of course is just to get elected. It turns out that actually having a platform or popular ideas is far less useful than making people hate and fear 'the other guy' enough. When you rely on hate and fear, people will even actively vote for people they despise simply because 'it's the lesser evil.' With modern politicking even Reagan-Mondale would have still been a 50/50 coinflip and Regan would be an imminent threat to American democracy, and Mondale would want to turn your kids gay. Actually if we reached the modern era of divisiveness and stupidity in Carlin's time, there's a real chance America, certainly as we know it, wouldn't even exist today.
>They brazenly and actively conspired to kill or buy any and all competition, but they've become so large (and so important to the US intelligence agencies) that they'll get nothing more than the most gentle slap on the wrist, relative to their scale. The moral of the story seems to be don't cheat, but if you're going to cheat - cheat relentlessly, ruthlessly, and take it to an extreme - and it might just become worth it.
The moral of the story to me is that the government doesn't give a crap what you do so long as it's good for them. Google only got punished, and even then it was a big "show" with no results not because it did wrong, but because it so flagrantly violated the law the government got pissed that it was being made to look a fool. They didn't really want to "punish" google because it was their buddy and they found it useful, they just wanted the appearance.
"Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Plus the market is artificially defined to be small. It excluded companies that do their own delivery (pizza places and others), home food delivery that isn't from restaurants, and the old option of just driving yourself to a restaurant.
There's thriving competition in the industry of getting people food, and lots of options that didn't even exist a decade ago. Crazy that it's being spun as the exact opposite.
> "Monopoly" used to mean a single company controlling a market. Now folks are now hollering "monopoly" about five different companies competing and collectively capturing 90% of a market?
Five companies controlling 90% of the market is more than enough to form a cartel or spontaneously self-organise in ways that have the same effect even without explicitly coordinating. (I once read an economics paper that I wish I could find now that said this would happen when the top 4 companies in an industry controlled more than 60% of the market)
What are the primary problems with monopolies? Do you think those exact same problems could be seen by a small group of of companies who act in a monopolistic manner (much like a cartel)?
I think you are stuck on the definition of the word monopoly rather than the reason behind why we ban/rule against them.
Both things can be true. Amazon is great for consumers, Google is great for consumers, no doubt. But consolidation of economic power under tech juggernauts I would argue is a net negative for society over the long run. The tech giants are not at fault, neither are the consumers, the fault lies with the system in which they operate that allows one outcome while ignoring another (potentially bad) one. What we need to do is change the rules.
You're right in a sense. The thing is what people are "willing" to do or what they "want" is a somewhat amorphous concept and depends on how options are presented to people.
Human nature involves the ability to let different dimensions of our cognitive apparatus cover one another's weak spots. In my view, a lot of what many would consider wise decisions throughout human history have been instances of this, many of them in the form of law, from child-labor restrictions to drunk-driving laws to birth control to incest taboos.
There just seems to be a certain segment of society that for some reason insists that "what the consumer wants" has to be construed in this narrow way as what is in the person's mind at the instant of a decision, and that any attempt to broaden that person's decision-making is somehow unnatural. Well, no. It's good to make changes that create immediate costs if doing so can save us from future costs that we're not good at foreseeing at the moment. It's good for Ulysses to ask his men to tie him to the mast. It's good in many cases for people to deliberately, explicitly, not do things they feel like doing because they will regret those things later. I believe this is often true even from a perspective of self-interest (e.g., people will not like it if a monopoly emerges and raises prices later), but it's even more true if you incorporate a bit of consideration for the well-being of others, and I think plenty of people are willing to do that to some extent.
> Politicians are people just like everyone else, they're just responding to incentives created by a majority vote.
I don't think this is remotely true, and feels like victim blaming. No one is voting for monopolies and exploitation. At most you have people voting for tax cuts and the hopes of improved economies, which are then faced with a bait-and-switch of erosion of legal rights and protection and further anticompetitive practices.
These so-called "food delivery" companies are the worst example possible as they are renowned for the way they exploit employees with blatant violations of basic labor laws. No one voted for that.
> Tech companies are just like any other company, except a lot more people are willing to pay for their goods and services.
No. Their whole business model is based on exploitation to the point some countries had to force them to finally get their riders into actual employment contracts.
> I'm actually far from convinced that tech companies are a net negative for society. Amazon makes billions because everyone wants competitively priced goods delivered to their doorsteps. Google makes billions because they provide free access to a large portion of humanity's information.
You have a far too naive and out of touch view on the problem, much like a few years ago people from colonial powers believed their presence was net positive for natives as that meant they could receive a salary for waiting on them hand and foot. Amazon's example is even more laughable as the company is notorious for exploitative and outright abusive labor practices. I understand you like to receive packages, but I seriously recommend you read something on the topic because their impact on society is far from net positive.
Inequality is built into our society’s structure - capitalism divides people into two classes - workers and owners. The level of wealth inequality in the current world is quite extreme. Even if you accept some degree of it because “it’s always going to be messy and chaotic” - the current level is truly poisonous for a healthy society. And it’s the result of neoliberal policy across the world since 1980 - the deregulation ideology of the rich filtered into governments. We have concentrated wealth; this wealth concentration has intensified itself as those benefiting from it in turn shape government policy in a vicious circle. The bleak world today is shaped by these forces - impending climate catastrophe (as fossil fuel interests can’t be reigned in), austerity (as the rich refuse taxes and control the governments who would tax them), authoritarianism (as the relationship between money and power can’t be bothered with pretense anymore), concentration camps (as the wealthy manufacture scapegoats for the mess they’ve made).
Turning around and blaming consumers for this while pretending it couldn’t be better both is truly a shallow take. Carlin wouldn’t let these people off the hook like you do:
> A person of good intelligence and of sensitivity cannot exist in this society very long without having some anger about the inequality - and it's not just a bleeding-heart, knee-jerk, liberal kind of a thing - it is just a normal human reaction to a nonsensical set of values where we have cinnamon flavored dental floss and there are people sleeping in the street
Is it really worse now than hundreds or thousands of years ago when there were kings and pharaohs and other rulers that had literal peasants and slaves and such all working for them?
I don't know, but it fees like people are more equal now than back then at least to me. Or more people have a much higher standard of living at least.
Realistically climate catastrophe seems worse to me yes than living as a peasant or ancient Egyptian. Our choices aren’t so limited however. But if you mean we should look at our standard of living today and appreciate them, let’s examine that with some nuance.
Since 1980 pay and productivity have been decoupled in the global north such that the wealthy have continued to grow richer while the median worker hasn’t seen their real wages rise, despite being more productive. In fact much of our rise in standard of living prior to 1980 is not due to the allowing concentrated wealth to run rampant but people fighting the wealthy for things like worker rights, democratic rights, social programs.
If we look at the global south on the other hand since 1980 we see a great rise out of poverty. This has happened primarily due to China’s socialist policies which have pulled 800 million people out of poverty.
Allowing a small wealthy minority to run one’s country is undemocratic as they are able to use their outsized money and power to control the government and further grow their own wealth. It’s precisely why we face problems like authoritarianism, climate change, and austerity - toxic transitions all funded by monied interests.
Does the world really seem like it’s continuing to progress to you? Is our choice really so limited as either ‘hand over the reigns of society to billionaires’ or ‘revert to medieval peasantry’? Consider the improvements in the quality of life we’ve seen in the past century. People came together and fought for those improvements. They didn’t trust and depend on their monied masters to drop crumbs their way. That never happens. They fought for better lives and achieved them.
To me it only seems like we are in a quite small scale decline in the otherwise long term upward trajectory of standard of living for the average human being. The overall upward trajectory that I think is mainly driven by technology, abundance, and prosperity.
I’m puzzled by your view but also curious. What’s short term about the climate crisis? And with intensifying authoritarianism what do you think is going to reverse our current trajectory? And what do you think determines whether standard of living rises or not? In our circumstances, which to me seem quite dire, I’m curious what motor you think powers human progress.
When did the discussion turn into climate crisis? I thought this was about quality of life. That's all I am talking about here.
Quality of life is determined by how well off the poor or average people can live. How "easy" their life is and what luxuries they can afford, how long they now can live etc.
I think the advent of technology and mass commercial farming food production and all that allows the general population to live easier lives than what you had to do to survive hundreds and thousands of years ago in like medieval times or ancient Egyptian times etc.
I think any little regression in quality of life in these last few decades is but a small downward blip in the greater and steady rise during all of human history.
I guess with the impending climate crisis quality of life will very likely go way down.
Climate catastrophe is expected to destabilize societies. A natural outcome from that could plausibly be the rise of extreme ideologies that advocate for nuclear conflict for example. It’s plausible human beings face an existential threat in the coming decades.
I think human progress is a chaotic process dependent on human choices, not a determined one. For example some hunter gatherer societies have lived lives of leisure working as little as 15-20 hours per week - quite a lot of ease compared to the modern work week most of us see. Human history is much more heterogenous and chaotic than what one might conclude from a perspective limited to today, medieval peasants, and ancient Egypt.
Luxuries I think should be viewed critically also. The effect of luxuries is unfortunately likely canceled by the hedonic treadmill. In our current society roughly 30% of people are suffering from mental illness like anxiety or depression. This is despite having iPhones instead of landlines.
You are right that longevity has increased over the long term. I think this is a stronger area of your argument. But is longevity alone a good measure for quality of life? I think we should include other factors, like happiness. Unfortunately we just don’t have those statistics over any meaningful horizon.
Overall I think measuring quality of life over the long history of our species isn’t quite as straightforward as you make it out to be. We must be wary of adopting just so stories. Quite a lot of heterogeneous human experience falls under this generalization, and most of it, at the very least, we just don’t have good data for.
In my view, progress that human beings experience is contingent, the result of our choices. Sadly I don’t think there is an arrow of history that guarantees a better future for our species. The risks we face in the upcoming years are immense. If there is a better future waiting for us, I believe it’s one we will have to fashion ourselves. Relying on an abstract concept like the arrow of progress can even be dangerous if it misleads us into forsaking our agency in fashioning our collective future.
> My theory is that if you're extremely pessimistic about technology or politics, you probably won't like anything that happens when large groups of humans make collective decisions. There's an air of let's go back to the good old days when we were hunter gatherers to the whole thing.
Hunter gatherer is the only alternative to a society under total dominance by mega-corps? This reminds me of individual stories from life under communism and brutal dictatorships where the dystopia is so omnipresent you don’t even remember what was before, nor could imagine anything meaningfully different. Instead, you take joy in the little things, like (today) the scraps left over after another market war – ”at least now we have a search engine”, ”I can order a taxi from an app”. I understand it, because it has been such a dominant force in the kind of second reincarnation of neoliberalism since ~80s in the US in particular. This apathy is the perfect wet blanket to prevent systemic change and perpetuate the status quo – no suppression of dissent is needed if there is no imagination or expectation of a better society. A lot of powerful interests are spending a lot of effort trying to convince us that any meaningful change would make things even worse, not better.
In my opinion, the best way to break these cycles is to study the past, other countries and many times smaller local communities. There are countless examples of well functioning systems if you pay attention. And new ones being established all the time. I’ve seen local markets completely flourish in just a decade, because of good policy. Once you see these things, and know in your heart it’s possible, there’s no going back.
I’m intentionally a bit vague here, because what’s meaningful to one person can be inconsequential to another. Which is why it’s so important to discover these things on your own. That’s the way to turn complacency into hope, and hope into organized action.
"Local communities" existed for millennia and didn't manage to reduce the child mortality rate and extreme poverty rate to effectively zero. I know neoliberalism is a dirty word, and there are plenty of problems with the modern world, but I would rather live in a neoliberal global society than the "local" world of 200 years ago.
This is the right conclusion, and I love sharing that video for that reason.
As of 2025 everyone globally has everything they need to make the world a great place for everyone. Instead, people continue to take the lowest energy route for their personal actions, which means they do not even think about the externalities of that purchase from Amazon, the Latte from Starbucks, continuing living in (insert your broken system here), working for some billionaire etc...They just shrug and think "its out of my control, besides I don't have any impact and why should I suffer unnecessarily"
There are millions of examples of individual people who had no education, being actively oppressed and violently attacked changing their situation by either moving or overthrowing their oppressors. Harriet Tubman comes to mind.
It's never been easier to do that, but people would rather not.
The entire "illegal immigrant" concept proves it, people literally spending their entire life savings ($5000) to pay coyotes to smuggle them in horrific conditions so they can be slaves picking strawberries. I know a Houston restaurant owner who did that trek twice from Guatemala, getting deported the first time and he just saved up and did it again. While speaking no english. Tell me again about how it's not possible to do something. Meanwhile the citizens can't be bothered to learn about their own history or you know, do anything.
I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen. There are no organizations where that's true. No church, no government, no state, no charity, nothing, nowhere actually meets the test of holistic globally aligned "good."
I read the Medicins Sans Frotiers book long ago, even they were terrible and continue to fight internally [1]. Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots. All of this is because the members don't care and don't have any desire to have less, they all want more forever.
At this point in history, everyone has access to the information they need to make globally holistic decisions. It's not possible to claim ignorance, ignorance is strictly a choice and ultimately a existential personal limitation.
There are no organizations that exist for the benefit of society and they cannot exist because humans fundamentally lack the cognitive ability to think beyond Dunbar's number but their actions have global consequences.
Self elimination is the only possible arc for humanity.
The job of a union in the non-sectoral-bargaining structure of the US is to shove more money into the pockets of their members, period, end of story, and that is exactly what their members pay them to do
> Self elimination is the only possible arc for humanity.
Hey man, at least add a spoiler alert.
We eradicated smallpox and recovered the ozone layer through global coordination, not even a century after murdering each other by the tens of millions in two world wars. We're capable of both.
> recovered the ozone layer through global coordination
The ozone layer won't be "recovered" for about a century, assuming everyone plays nicely[1]. It is still diminished from CFCs, and we're still being bombarded with more UV than previously.
> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
I could have saved you the trouble if you'd just asked me!
Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
Free markets work because it harnesses the inherent selfishness of everybody, rather than trying to override selfishness.
> it harnesses the inherent selfishness of everybody
the biggest lie we're constantly being told: https://www.econlib.org/library/Enc/bios/Ostrom.html. this really annoys me, we're not inherently selfish. at least not most people. free markets don't work in any rate. how do you even come to this conclusion?
Spot on, it's so sad to see this kind of thinking so ingrained in people, when literally 3 seconds of critical thinking would lead to the opposite conclusion. Are kids just as selfish as adults, at every age? Does their selfishness change depending on what they're taught and how selfish their role models are? Is selfishness among adults at the exact same level across decades, eras, cultures, nations?
If the answer to any of these questions is "no" (and anyone capable of using HN should realistically be answering them as such), then it's abundantly clear you can't just hold up your hands and say "oh well, everybody is inherently selfish, 'ts just the way it is". Even the idea of everyone being somewhat selfish isn't really true when you consider the countless cases of people literally sacrificing their own lives through history - and not for some kind of post-mortem glory. One can argue semantics over that still being "selfish" as it's done to further a goal of themselves but that's just wasting everyone's time.
> when literally 3 seconds of critical thinking would lead to the opposite conclusion
Understanding why free markets work takes a lot longer than 3 seconds, as it is counter-intuitive.
> the countless cases of people literally sacrificing their own lives through history
Decades ago, the Scientific American ran an article about this, where a study showed that people self-sacrificing can mathematically be shown to ensure the survival of their genes. For an obvious case, parents sacrificing themselves for their children's sake. This makes it selfish. People are less willing to sacrifice themselves the genetically further away the people benefiting from such sacrifice.
Ostrom: "the ones that worked did have a kind of property rights system"
LOL. And the fact that she gets a Nobel Prize for this shows how unworkable it is in general.
> we're not inherently selfish
You're selfish, so am I, so is everyone you know.
> free markets don't work in any rate. how do you even come to this conclusion?
The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
Worker cooperatives: A worker cooperative is not a commune. In any case, there are what, a hundred examples listed? What that shows is they are so rare that a global list can be compiled on Wikipedia. Set that against the scores of millions of businesses.
> You're selfish, so am I, so is everyone you know.
you can ignore the evidence all you want. Doesn't make it correct. Google it for yourself then.
> The success of free markets in the US, Germany, Japan, Hong Kong, Taiwan, Vietnam, China, Singapore, etc.
how have they succeeded? enshittification and wealth accumulation is success? what's the metric here? decreased health? decreased lifespan? increased addiction? increased unhappiness?
> Worker cooperatives: A worker cooperative is not a commune.
Let me quote the discussion, which you obviously didn't even understand:
>> I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual. It just doesn't happen.
> I could have saved you the trouble if you'd just asked me!
> Over 20,000 communes have been started in the US. None have survived. What baffles me is why people keep believing they can work.
they talked about cooperatives, you answered with communes. I gave proof that cooperatives work.
That's not true. I just checked on it, and they used to be subsidized, these days not so much.
A lot of them are hybrid models with some capitalism, mixed with the socialism. So I guess it sort of confirms your opinion that these things don't work when pure?
But they do seem to have found a successful hybrid model.
The problem is that capitalism mathematically ensures inequality which subverts the concept of survival because it creates extreme imbalances in agency.
What results is that capitalism must always use as reference a forever unchanged “state of nature” mythology which never existed.
Capitalists view themselves as a different species than modern anatomical humans, more enlightened etc… but I have seen firsthand that millionaires billionaires and even “middle class” people have less consciousness than those who have very little capital.
Capital enables alienation by letting the capitalist offload “life” to people who do it for them, leaving them nothing but Vice. It always corrupts
>It's never been easier to do that, but people would rather not.
Never been harder with ubiquitous surveillance.
>As of 2025 everyone globally has everything they need to make the world a great place for everyone.
Disagree. Even if theres enough food being produced, its not produced evenly, and the extra labor and resources to distribute it evenly would screw a lot of this up. Then theres the idea that a bureaucracy large enough to distribute it worldwide would be efficient.
>I've tried to start multiple non-heirarchical anarchist cooperative organizations and the number one challenge is finding people who will put the group ahead of the individual.
The group is made of individuals. Ultimately eventually they will need some reward for their participation. Whenever I have involved myself in these groups theres ultimately some unsavoury character who has positioned himself as leader and siphon off the glory for themselves. Or in one case, it was just an avenue for the "leader" to gain access to vulnerable women. These groups dont work because they get hijacked, not because the people doing the work dont want to work.
>Unions now make most of their money from capital investments [2], which is directly in opposition to their anticapitalist philosophical roots.
Unions are about protecting workers. They dont have to be socialist paragons as long as they meet that directive.
>At this point in history, everyone has access to the information they need to make globally holistic decisions.
Lmao, where to start with that doozy. Local knowledge still trumps the disinfo hose.
>lack the cognitive ability to think beyond Dunbar's number
People just dont trust beyond that number, and with good reason.
>Self elimination is the only possible arc for humanity.
Lmao, there's no reason why we cant keep going like this. An engine built on brutal exploitation. Predicting humanities doom seems greatly premature.
Yeah it’s Soylent green all the way down; just people hiding behind allowed legal obfuscation.
Physics is inviolable. Human tech will never succeed in the fancy things we imagine. No evidence it allows such things naturally. We’ll conjure a bunch of artistic representations, but never harness enough energy to break things.
Hunter gathering is a bit far back. Since none of the geniuses can guarantee 100 generations from now will still care about rockets to Mars, listening to them today about the far future is asinine.
Keep enough food and hardware stores around and give people time back.
I’m anti story mode and that means Sam Altman’s or some notion of future human greatness. Fellow US readers; yeah that’s right I don’t care you exist. You keep me off the hook for your healthcare, good luck. Why would I care when you keep yourself off the hook for my healthcare? Fuck you.
I’m fucking sick of Americans clearly being low skilled useless to themselves exploiters of others for zero in return but a made up story. In all my study of physical science I never come across evidence any of this wanky web tech is a fundamental force. Occam’s razor applied, it’s all just the hallucinations of arbitrary meat people.
Instead of citing an AI, why don't you cite an actual reputable source? Those facts it ingested and regurgitated no doubt came from somewhere, and you're clearly attempting to use the facts to prove a point. An authoritative source is more helpful than attributing it to [insert ai bot here].
the data is so fucking obvious (everyone knows there are massive OD and suicidality in this moment), of course people are going to be pedantic about the source and not debate the merits of the argument.
however you want to spin it, the source is always important. again, especially if it tends to fabricate things. don't be lazy and research a proper, first order source and not a parroted parody of a source.
you're intellectually lazy, so why would anyone want to discuss with you?
While Sysco is a monopoly, they apparently don't make anyone angry enough to get rid of them. My guess is that they are pretty even-handed across an entire industry and their customers are knowledgeable enough to not screw up a good thing when they see it.
No I think tech just gets obsessive media coverage these days (both from MSM and from influencers.) I know lots of event companies that hate Sysco, it just doesn't get as many clicks as a tech company does.
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale.
At least in the US we had national monopolies that took serious regulation to solve. That regulation, strangely enough, is still in place. Perhaps early on there's fear to regulate a nascent industry and by the time regulators realize the problem they're too afraid of the power wielded by the monopolists.
In any case, it's never too late to break up these monopolies. The problem is that the Robber Barons are too far in the past to serve as a lesson for current generations. And some folks might remember AT&T but not understand why it was such a big deal.
Weird timing to see this, as I have come to the same conclusion and was writing a blog post on it. I think we need to start figuring out how to modify our economic system to prevent this, because as you pointed out the tech world is much more “winner takes all” than the physical world, and watching industries consolidate globally under a handful of players is extremely concerning.
All mature markets eventually end up with 3-5 competitors dominating the market. I don't really see this as an issue.
I also disagree that it's a net negative. Technology adds convenience to these markets and as long as the government isn't price-fixing through strict regulations, we also end up with better prices.
We've seen some of the prices increase after the government decided to regulate the hotel markets. They forced many people to stop renting out their places through sites like Airbnb and now the hotels are free to increase prices accordingly.
If it weren't for Uber and Lyft, the Taxi cab unions would have gladly monopolized the industry charging workers $1,000,000+ for a medallion and not keeping up with technology (Taxis were still hailed in person or ordered on the phone before the tech companies decided to compete).
Market consolidation usually leads to higher prices, and it can certainly happen with 3 big players dominating a market. AirBnb is an interesting example. My gut feeling is that the service fees (and cleaning fees, bizarrely) are climbing as they gain market share. Unfortunately I'm finding it extremely difficult to get information about what their service fees were in (say) 2015. Would be interested if anyone else knows a good way to find out.
mature markets end up 3-5 competitors because further mergers end up blocked. capitalism would otherwise allow them to contract to a single player. So I'm sure that's one government control that you'd agree is worthwhile.
And even that blocking doesn't matter much anymore, because the owners of all those 3-5 companies are starting to be the same entities. Because the same people/organizations own all of the companies, they no longer care which one is currently winning and so won't push them to compete against each other as much as they would if the ownership didn't have any overlap. They'll push for policies that allow those players to exist together without stepping on each others toes.
Not at all, you see this pattern in markets that regulators ignore too. It's a human limit. You end up with 3-5 competitors because the incremental value of yet another competitor becomes nearly zero very fast. People have very strict limits on how much information about a specific market they care to remember. To even have 2-3 competitors they have to put a ton of work into differentiation and marketing, otherwise people forget they exist.
Sometimes you do see more, and it's indeed because regulators are stopping mergers. The airline market is like that. But it's a mistake and the regulators should back off. It's not helping people to have a gazillion undifferentiated brands, at some point it's just wasteful duplication.
The idea that every market would contract to a single player if not for the benign wisdom of the regulators is a trope. Regulators are tiny compared to the number of markets that exist, but competitive markets aren't the exception, they're the norm. You see it even in very sticky locked-in markets where regulators deliberately decided not to intervene, like operating systems and browsers (Justice Dept effort to break up MS was cancelled).
I think you have OP's comment the other way around. They were saying that markets will naturally tend to fewer than 3-5 competitors, and only prevented from getting there by antitrust.
I think I addressed both ways around: markets naturally tend to settle on 3-5 competitors, unless blocked by regulations.
There are very few markets that are both natural monopolies and stay that way for long periods of time. Outside of things that tend to be owned by governments anyway, like road networks, I'm having a hard time thinking of any.
You're right, I apologise for not reading your post carefully enough.
Whilst pure monopolies are rare, my impression is that surprisingly many markets consolidate to an oligopoly, and that this reduces competition and is generally pretty bad for the consumer.
Tech has also reached into EVERY aspect/detail of our lives 24/7 to try and extract value from it.
Tech originally preached that it's going to improve/simplify/enrich our lives. Instead tech is farming us like we have never been farmed before while giving us none of the original promise/deal. There is no peace. There is no escape. The improvements in our life are normally marginal and short term. There is no just existing, just constant, continuous farming of you for whatever value can be extracted. And because of how tech scales any extraction is never too small to not be worth going after. At least in the Matrix you weren’t expected to curate your own enslavement and smile and post about it daily.
>This is essentially the story of tech companies across nearly every industry where they have come to dominate.
It is the only possible result of consumptive transactional organizations.
Conquest in all forms is accretion and consumption based, until the organization gets to large to sustain a consistent direction, then it collapses and the people get pulled into many smaller companies.
Those companies get accreted into a new superset monopolist/duoploist etc... and the bubble grows again and then explodes.
Wash rinse repeat forever at different abstraction levels.
Yup. I would 100% support aggressive localism here, given that the actual service is very easy to replicate. I'd absolutely support an absurdly high tax on any "out-of-town" food delivery service in order to -- maybe "artificially" -- prop up a local one. There is now NO good reason anyone in California deserves a cent for e.g. a local Florida driver delivering local Florida food to a local Florida customer.
I’m realizing more and more that it’s rarely technological advances that make any particular company successful and impactful. It’s more often the business acumen.
Were “nerds” with coding skills really ever the best ones to be starting companies? How many successful ones were founded without leadership being handed over to “suits” pretty early on?
You need nerds to build something at a baseline competency that you can sell it, then you need to be the greasiest salesman ever to sell it harder once you've gotten a foothold.
People genuinely do not care about product quality, doubly so in the world of software (see: Crowdstrike is still in business).
It would be interesting to see the success rates of startups based on how early on leadership includes MBAs. Or based on how early on they have people with corporate experience at the top.
Does baseline competency stop being the differentiator after seed? Series A? B?
Surely we're understanding that VCs are playing a stronger game in the software industry.
Cost of goods is lower, overhead is lower in software than in all the items you mentioned and VCs starve out other players by reducing their costs, capturing the market and increasing cost once captured.
Have an app is doing a lot of work there. Uber eats at least is fairly sophisticated back and front end and certainly not a weekend project or something say Domino's Pizza can outsource to a team to get it to that quality.
Capitalism does facilitate monopolies or industries with razor thin margins like airlines. However, the space of competition is a revolving door with constant opportunity to create something better (that people want) than the established players or to enter a new arena entirely. Ultimately, since consumers are the choosers, it works in their favor. It was the consumers that wanted these companies to exist, and the profits are a proof of that.
However, sometimes there are unpriced externalities like the competitive advantage of removing your own manufacturing waste by dumping it into a stream. That is where governance (whether self or the state) comes in.
The problem with this line of thought is that everyone just uses it to hate on people they already hated on. You go after rich tech monopolies, progressives generally go after big business, conservatives use it to go after the biggest business of all, the government.
We all just need to focus on monopoly in all its forms, instead of letting the politicians continue to separate us using division without difference.
> Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale
There's been plenty of national and global monopolies (I mean, that's literally why we had Antitrust laws made in the 1890's) as well as industries with only a couple players in a market.
In fact, if you name any industry, it's probably led by just 3-5 corporations. Mobile service? Verizon, T-Mobile, AT&T. Television news? Disney, Paramount, Comcast, Fox, Warner Bros. Liquor? AB InBev, Diageo, Pernod, Suntory, Bacardi. Wine? E&J Gallo, The Wine Group, Constellation. Beer? Ab InBev, Heineken, Snow Breweries. Cars? Toyota, Volkswagen, Hyundai, GM, Ford, Stellantis. Airlines? Delta, American, United, Southwest, Lufthansa. Oil and gas? Aramco, Exxon, Chevron, PetroChina, Shell. Music? Universal, Sony, Warner. Coke, Pepsi, Keurig.
This is what capitalism does. By definition it grows as large as it possibly can, shutting out competitors.
this is essentially the story of capitalism as it always results in monopoly concentration and the development of industry cartels. before tech it was oil, before oil it was rubber and tobbaco.
Modern capitalist liberal democracies have theoretically strong frameworks and powers for regulating and dismantling cartels though. The real story is that politicians and bureaucrats in government become corrupted by them and fail to act for the good of the people.
And that is the story of humanity, not any particular classification of society and governance.
And why is a large monopoly a net negative? I read his book and he says that monopolies are 10x better products, and if monopolies are 10x better then why are they bad? Are you arguing that it would be better to keep using 10x worse products, for the sake of there not being any monopolies?
Monopolies are anti-competitive. Without competition there is no incentive for innovation, lowering prices, not price-gouging etc. Is a 10x better product really 10x better if it is also 10x more expensive and there is no alternative?
Depends a lot on what the monopoly in question is.
1. How much room for innovation is there?
2. How hard is it to substitute the good / service provided by the monopoly?
In the case of food delivery apps there isn't much room for service improvement. A monopoly here probably isn't preventing much innovation. How much better can you get at delivering food from a restaurant?
And there is an easy substitute in terms of driving to the restaurant yourself, so if the monopoly tries to jack up prices too much they will steadily lose customers. The prices now are so high that they have already lost me. I use those apps < 5 times a year.
Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly, as in it would open up a void for effective competition. The real anti-competitive actions is that it becomes cost effective to do regulatory capture / pay bribes to politicians. A monopoly can pay to play in a way that fledging competitors cannot. Once the industry has been captured then they can do rent seeking behaviors without worrying about competition.
If allowed, an incumbent monopoly will do the minimum innovation or tactical pricing necessary to keep out competitors - even if it means they suffer a temporary loss.
This can effectively create a barrier to entry high enough that no small company has a chance to beat them. Since insolvency before overcoming the barrier is foreseeable, no one even tries, and the monopoly gets to keep high prices (compared to a competitive market if they weren't there).
How many desktop OSes can you choose from walking into BestBuy? And this is decades after MS was convicted of being a monopoly and illegally paying computer manufacturers money to keep competitors off.
> Not innovating, maintaining high prices, and price-gouging are unstable activities for a monopoly
Depends how good their moat is. Or how deep their pockets are, because they can often bribe to keep their competitors out (Intel vs AMD). Or just buy their competitor outright.
How? Do these 5 companies even operate in the same places? Around here we have DoorDash, Uber Eats, and that’s pretty much it. We have SkipTheDishes, which was present before the other two outside urban areas, but I don’t even bother talking about them, most restaurants in the area have switched away from them. The other alternatives just never existed outside highly urban areas or have simply been pushed out by the bigger players. Where are the effects of this highly competitive market, exactly?
Without more context this is silly to say. It isn’t as if we know the natural or correct construction of this market a priori and that 5 is clearly a distortion from that. Consolidation can sound bad in the abstract but in this relatively immature market you could still expect major shifts to get to a steady state. Just a little bit ago people were remarking on VC-subsidized delivery; as that goes away, consolidation is not unreasonable.
Edit: ‘this’ in the original parent comment was along the lines of ‘five out of potential thousands of actors’
Split the world us/china/other and ignore minor players and there are 1/3/1.
In a given are there is competition but the local competition is likely to be pushed out by Uber Eats who could undercut them out of business for a while. Or just have better tech / customer experience due to scale (looking at you Menulog)
Large and dominant companies can be a net good, at least in theory. In practice they become corrupted because of incentives to maximize profit by any means possible, with few who can oppose them.
When well regulated one can have most of the benefits without many of the downsides. Sadly, even the regulators become captured.
We have to distinguish between monopolies that keep their status by being great versus monopolies that have something else going on.
Google (search) is an example of the former. Search is a very expensive business to be in, but most of the costs are in scraping, indexing and software development, not actual query execution. The more users you have, the more you can spend while still keeping margins constant, and the more you spend, the better your engine is, which gives you more users.
This leads to the situation where you only have two competing search engines[1], one of which sucks and only exists because it's propped up by Microsoft. However, this is only true as long as Google keeps their quality up. If Bing suddenly became significantly better than Google, people would gradually start switching.
20th century AT&T is an example of the latter phenomenon. It was a monopoly because of US regulations, which made the barriers to entry insanely high. This meant AT&T could set almost whatever prices they wanted, as consumers didn't have a choice anyway.
[1] Engines like Kagi or DDG don't count, as they still fundamentally rely on Google's or Bing's indexes.
> monopolies that keep their status by being great
What I am asking is what incentive those monopolies have to continue being great. Even if Google did not use Chrome to steer people to Google Search, Google Search is an established habit for most people, and it would have to become significantly worse than any competitor in order for people to consider switching.
You pointing out that a competitor to Google can only exist because Microsoft is pumping huge amounts of money into it, is not the great argument you seem to think it is. If Microsoft does not have a good chance of making money with Bing, what chances does a startup search company have?
By improving the consumer experience. Better optimizations of which couriers go where and by what routes, faster delivery times (and hence warmer food), menus and restaurant directories optimized to show you what you actually want, better delivery time estimation, no need to talk to a human or re-enter your details for each new restaurant, that sort of thing.
At Uber scale, you have people working on improving metrics, and those improvements translate across all the restaurants that exist across the world. "John's Chicken" won't hire their own guys to do A/B testing on which pictures of their food generate more sales.
he didn't produce any proof of that statement and I figure neither can you. so let's assume this as false, shall we?
we see lot's of examples of how monopolies (or similar) tend to do rent extraction. that's why we're talking about enshittification so much. it's because they only care about profit (and on a small time frame as well), not the product, not the customers, nor the planet.
Big business is the engine that drives the economy. Small businesses are the future big businesses. Economies where big business is discouraged don't do very well. Small business doesn't have economy of scale, nor can it raise the capital to do big projects.
> extreme concentration of wealth
Big business does not concentrate wealth. What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
They absolutely do. If for no other reason than each of their revenue goes to fewer entities.
> What you're seeing is the creation of wealth. This created wealth then flows out into the rest of the economy, via paying the workers and buying plant&equipment, etc.
This is the flawed reasoning behind "trickle-down economics"[0], which was called "horse and sparrow" in the 19th century. It didn't work in the 19th century when labelled as the latter nor in the 20th when reframed as the former.
Any company which has earnings beyond those of operating costs is a concentration of wealth by definition. Whether that wealth is distributed to shareholders, kept as retained earnings, or otherwise transferred to specific entities is irrelevant.
> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition
Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Now, if you decide to use my painting as compost (sob!), you are dissipating the million dollar value. That's not me concentrating wealth, it's you destroying your wealth.
If you stole the painting from me, then you concentrated wealth. But we're not talking about theft here.
Your art supplies and time didn't create wealth in the economic sense ("the annual produce and labour of the nation" as Smith defines it, <https://en.wikisource.org/wiki/The_Wealth_of_Nations/Book_II...>), but a financial asset, in the form of a (presumably) uniquely identifiable durable store of financial value.
This is contrasted with economic wealth in which some inputs (capital, labour, raw materials (themselves generally considered as capital) are transformed into some immediately useful consumable product (say, food or fuel), a durable good (clothing, furniture), a service ("immediately extinguished" in the terms of some economists, but still having potential lasting positive value), or capital which can itself be used in future economic activities (machining equipment used in the manufacture of widebody aircraft, or the aircraft themselves).
All else equal ("ceteris paribus"), the result of creating a novel but valued painting would be the same as that of inflating any other durable store of value: the relative prices of competing assets would fall proportionate to the price of the artwork. Ordinarily the drop is small and the bucket large such that this isn't noticed, but it is the net effect.
David Ricardo is amongst the first economists to deal with the economics of collectibles and durable assets of which I'm aware, e.g.,
Ricardo’s value theory applies only to those commodities that ‘can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint’; it is thus not applicable to ‘rare statues and pictures, scarce books and coins, wines of a peculiar quality [...]’ (Works, I, 12)
From The Anthem Companion to David Ricardo, Edited by John E. King, p. 169.
>> Any company which has earnings beyond those of operating costs is a concentration of wealth by definition.
For context, here is the second sentence related to the above:
Whether that wealth is distributed to shareholders, kept as
retained earnings, or otherwise transferred to specific
entities is irrelevant.
I believe this relevant to the below.
> Let's say I buy $20 worth of art supplies, and I paint a landscape and sign it with my moniker, "bright". Since "bright" paintings are very rare and go for a million bucks each, I now have created a million bucks of value. Who did I transfer the wealth from? Nobody. I took nuttin from nobody. Yet I have become wealthy.
This scenario is not relevant to "big business", but instead describes a sole proprietorship with an assumption of a known fungible value. It also does not account for consumable goods and/or transient services. In any event, by your own definition below:
> Let's say I sell it to you for a million bucks. Did I take your wealth? Nope. I traded a million dollar painting for a million bucks. You are exactly as wealthy as you were before.
Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
Back to my statement of corporate earnings beyond operational costs being a concentration of wealth. I believe we can agree on the following:
- Any for-profit company has as its purpose the goal of accounts receivable (AR) exceeding accounts payable (AP) over time.
- There are a limited number of recipients regarding profit distribution for any given company.
- Those having no direct or indirect ownership of a given company do not receive profit distributions.
If we agree on the above, then the larger the profits, the larger the distributions. Since the set of people qualifying for profit distributions are less than the set of all people having no investment relation to the company, it follows that said profits are enjoyed by fewer entities than those strictly involved in the AR side of the ledger.
Hence a concentration of wealth into the organization.
> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
>> Either you have not "become wealthy", as you "traded a million dollar painting for a million bucks" or the effectual value of money exceeds the purchase value of the "million dollar painting". Both cannot be true.
> I became wealthy by creating wealth, not concentrating it. Concentrating it requires it be taken from somewhere else. There is no taking going on, there is creation and exchange.
The scenario you have described is logically consistent while being representative of a tiny subset of commerce. Revisiting the original use-case:
Let's say I buy $20 worth of art supplies, and I paint a
landscape and sign it with my moniker, "bright". Since
"bright" paintings are very rare and go for a million bucks
each, I now have created a million bucks of value.
Assuming all of the above, this business model does not account for at least the following:
A - Businesses having more than one employee.
B - Asset deprecation, such as when purchasing a new automobile.
C - Consumable goods, such as food, petrol, etc.
D - Services such as commercial/residential rent and physical security.
E - Taxes.
F - Stock dividends and/or performance bonuses.
A and E involve direct wealth transfer from the business to relevant parties.
B is a second order effect only realized when the buyer attempts to sell the asset to a third party.
C and D are direct wealth transfers as the seller retains the remuneration for as long as they desire (excluding applicable cases identified above) and the buyer eventually does not have a physical equivalent. Note that this often remains a valuable exchange for both parties.
This is one reason that I see most tech companies as essentially a net negative for society at large, as the goal is nearly always to control a large monopoly (and this is fully admitted by many tech leaders, e.g. Thiel) which the Internet makes possible. Pre-Internet you would see the same dynamics, but usually on a much smaller regional scale. I think that many of the growing problems in society today are fundamentally attributable to the extreme concentration of wealth and power that modern tech enables.