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> Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone", No, no it is not. One party making lots of money is not the s

by IanCal 10y ago

> Making a billion dollars a year revenue is pretty much the definition of "benefiting everyone", No, no it is not. One party making lots of money is not the same as something benefitting everyone. Companies ignoring environmental regulations could make more money, but it wouldn't benefit everyone, as an example.

fauigerzigerk 10y ago
Before even talking about externalities like the environment it's worth noting that revenue isn't profit. So who benefits from revenue depends on profit margins. If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit. If a startup disrupts an industry by finding loopholes in government regulations, the question of who benefits is much more complicated. I do believe that finding loopholes or even breaking the law to some degree is a necessary part of the democratic process. It's also unavoidable given the global nature of some businesses. But whether or not regulatory arbitrage benefits anyone other than founders and investors very much depends on the specific business model and local circumstances. It's extremely complicated and varied. Finding out what all the effects are will probably produce a couple of nobel laureates in economics.
- coldtea 10y ago
  >If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit. If before you had independent smaller businesses or individuals, and now all that has been captured by a single company, then a job has just gone down the drain, and the road is open for monopoly.
  - fauigerzigerk 10y ago
    That is always a danger. But I think history has shown that monopolies or oligopolies are often less stable than they appear. The assumption, beginning with Marx I think, was that monopolies have a self reinforcing element. That's true, but there is also a self defeating element. The more a monopoly absuses its power, the more complacent it becomes and the greater the incentive to disrupt it. The problem is that governments sometimes collude with monopolists instead of making sure that markets are actually functioning as they should.

by IanCal 10y ago

fauigerzigerk 10y ago

Before even talking about externalities like the environment it's worth noting that revenue isn't profit. So who benefits from revenue depends on profit margins. If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit. If a startup disrupts an industry by finding loopholes in government regulations, the question of who benefits is much more complicated. I do believe that finding loopholes or even breaking the law to some degree is a necessary part of the democratic process. It's also unavoidable given the global nature of some businesses. But whether or not regulatory arbitrage benefits anyone other than founders and investors very much depends on the specific business model and local circumstances. It's extremely complicated and varied. Finding out what all the effects are will probably produce a couple of nobel laureates in economics.

coldtea 10y ago
>If a startup disrupts a high margin industry, especially if that industry is also inefficient (which often goes together) and replaces it with a more efficient lower margin business model, then consumers will benefit. If before you had independent smaller businesses or individuals, and now all that has been captured by a single company, then a job has just gone down the drain, and the road is open for monopoly.
- fauigerzigerk 10y ago
  That is always a danger. But I think history has shown that monopolies or oligopolies are often less stable than they appear. The assumption, beginning with Marx I think, was that monopolies have a self reinforcing element. That's true, but there is also a self defeating element. The more a monopoly absuses its power, the more complacent it becomes and the greater the incentive to disrupt it. The problem is that governments sometimes collude with monopolists instead of making sure that markets are actually functioning as they should.