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> Is it possible for a large and dominant system to innovate without competition? AT&T held a monopoly during the golden age of Bell Labs, which was one of the

by freyr 11y ago

> Is it possible for a large and dominant system to innovate without competition? AT&T held a monopoly during the golden age of Bell Labs, which was one of the most prolific centers of innovation in the 20th century. Google has a de-facto monopoly over search traffic today, and I think they're a genuine innovator — or at least trying to be. Peter Thiel writes: "Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and finance the ambitious research projects that firms locked in competition can't dream of." [1] [1] http://www.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536 http://www.wsj.com/articles/peter-thiel-competition-is-for-l...

chongli 11y ago
So the answer to the parent poster is a clear yes. How about the more difficult question: Do monopolies innovate more than competitive industries? Peter Thiel's argument brings to mind similar arguments about billionaire philanthropists such as Bill Gates. Would we be better off if it simply weren't possible to amass such a fortune?
agumonkey 11y ago
I just read that about PARC. So many people could realize the impossible because so many resources and talents devoted to solve each others issues. I understand market is as much of a benefit (competition) as a burden (competition). That said other monopolies ended up sour, Kodak for instance.
minimuffins 11y ago
Hah. "Show me a competitor and I'll show you a loser" [1] I like the idea that only anti-competitive (probably large) institutions can do stable long term projects (space exploration, say). I think it's hard to argue against that claim, really. Highly competitive firms do produce a lot of stuff, so they feel productive, but the pile of new apps that came out in 2015 will not propel us into a more livable world. But a lot of resources went into the competitive clusterfuck of building them all! Those resources should have been allocated better. I'd prefer a responsive democratic state to direct the flow of resources and guide long term innovation, instead of a monopoly that trades stewardship of innovation for an upward redistribution of wealth and has zero accountability to anyone outside of it. [1] Apparently Thiel used to say "Show me a good loser and I'll show you a loser" when he lost at chess. http://www.newyorker.com/magazine/2011/11/28/no-death-no-taxes http://www.newyorker.com/magazine/2011/11/28/no-death-no-tax.... The article doesn't say so but I think that quote originally comes from Vince Lombardi. http://www.vanityfair.com/hollywood/2010/03/why-the-vince-lombardi-biopic-will-be-the-best-sports-movie-of-all-time http://www.vanityfair.com/hollywood/2010/03/why-the-vince-lo...
SilasX 11y ago
Not to nitpick, but that basic dynamic -- the prospect of decades of monopoly profits driving innovation -- was long acknowledged even when the US constitution was written; it's not just Peter Thiel's thing. "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." https://en.wikipedia.org/wiki/Copyright_Clause https://en.wikipedia.org/wiki/Copyright_Clause
- ashark 11y ago
  Leveraging (especially pooling) the massive R&D resources of large, secure companies, while also ensuring that they stayed large and secure, was a big part of how Japan went from a poor, ruined post-war country to a tech powerhouse so quickly. It's my personal go-to example when faced with the assertion that low-intervention, high competition markets are always the best idea, without qualification.

by freyr 11y ago

chongli 11y ago

So the answer to the parent poster is a clear yes. How about the more difficult question: Do monopolies innovate more than competitive industries? Peter Thiel's argument brings to mind similar arguments about billionaire philanthropists such as Bill Gates. Would we be better off if it simply weren't possible to amass such a fortune?

agumonkey 11y ago

I just read that about PARC. So many people could realize the impossible because so many resources and talents devoted to solve each others issues. I understand market is as much of a benefit (competition) as a burden (competition). That said other monopolies ended up sour, Kodak for instance.

minimuffins 11y ago

Hah. "Show me a competitor and I'll show you a loser" [1] I like the idea that only anti-competitive (probably large) institutions can do stable long term projects (space exploration, say). I think it's hard to argue against that claim, really. Highly competitive firms do produce a lot of stuff, so they feel productive, but the pile of new apps that came out in 2015 will not propel us into a more livable world. But a lot of resources went into the competitive clusterfuck of building them all! Those resources should have been allocated better. I'd prefer a responsive democratic state to direct the flow of resources and guide long term innovation, instead of a monopoly that trades stewardship of innovation for an upward redistribution of wealth and has zero accountability to anyone outside of it. [1] Apparently Thiel used to say "Show me a good loser and I'll show you a loser" when he lost at chess. http://www.newyorker.com/magazine/2011/11/28/no-death-no-taxes http://www.newyorker.com/magazine/2011/11/28/no-death-no-tax.... The article doesn't say so but I think that quote originally comes from Vince Lombardi. http://www.vanityfair.com/hollywood/2010/03/why-the-vince-lombardi-biopic-will-be-the-best-sports-movie-of-all-time http://www.vanityfair.com/hollywood/2010/03/why-the-vince-lo...

SilasX 11y ago

Not to nitpick, but that basic dynamic -- the prospect of decades of monopoly profits driving innovation -- was long acknowledged even when the US constitution was written; it's not just Peter Thiel's thing. "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." https://en.wikipedia.org/wiki/Copyright_Clause https://en.wikipedia.org/wiki/Copyright_Clause

ashark 11y ago
Leveraging (especially pooling) the massive R&D resources of large, secure companies, while also ensuring that they stayed large and secure, was a big part of how Japan went from a poor, ruined post-war country to a tech powerhouse so quickly. It's my personal go-to example when faced with the assertion that low-intervention, high competition markets are always the best idea, without qualification.