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Small cities and rural areas don't grow or wither by accident. They grow when the government enforces competition laws at every level, preventing markets from

Small cities and rural areas don't grow or wither by accident. They grow when the government enforces competition laws at every level, preventing markets from being captured. They wither when markets are captured and the network effects of oligopolized megacities become more valuable than genuine market experimentation. http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-bust/ http://washingtonmonthly.com/magazine/novdec-2015/bloom-and-...

eropple 10y ago
I agree with you in general, but there is also the specter of international competition that is a lot harder to meaningfully regulate (we've seen what protectionist policies do, to all of our detriment). Those network effects of big cities are not intrinsically tied to oligopolic structures. They're also just bigger and more attractive to a big chunk of the population, yeah?
- leereeves 10y ago
  How is China able to be so protectionist and so successful?
  - eropple 10y ago
    Because they can be an order of magnitude cheaper because the health of the workers they barely pay doesn't matter to them. This is starting, already, to change, if slowly, both due to external pressures (PR) and the rise, again slowly, of markets that are in turn cheaper and even less give-a-shit than they are. (EDIT: Also, it's important to realize that that "success" very much does not extend to rural China. They're not airlifting money out there the way that we effectively do for our rural populations and so industry is even more concentrated than in the United States, when you adjust for relative population size.) And this is the argument of the types who want to rail against OSHA and minimum wages and the like in America, but frankly, I like not living in a society with factory-crippled invalids and suicide nets on the windows so I am so very unsympathetic. It's an externality that I'm certainly not comfortable overall with, but the bright spot is that those dangerous, barely-paying jobs are a rear-guard action as we play out the clock towards ever-cheaper, more-pervasive automation; that said, the inevitably oppressive effects of modern capital owning that automation is why I am effectively, if not in name, a socialist in 2017.
  - scarface74 10y ago
    A lot of that "success" is not real. China is building infrastructure that no one is actually using. Temporarily propping up the economy but not tied to long term gains. https://www.google.com/amp/www.forbes.com/sites/kenrapoza/2016/12/19/china-bubble-economy-2017/amp/?client=safari https://www.google.com/amp/www.forbes.com/sites/kenrapoza/20...
    - leereeves 10y ago
      That's a minor quibble compared to how far they've come from where they started.
- eli_gottlieb 10y ago
  >Those network effects of big cities are not intrinsically tied to oligopolic structures. They're also just bigger and more attractive to a big chunk of the population, yeah? Well, they're certainly more attractive to young people nowadays, but at their core, they really offer a few things: * Lots of skilled workers, all in one place. * Lots of preexisting infrastructure, all in one place. * Low per-capita cost of additional infrastructure. On Hacker News there are occasional articles saying many programming jobs ought to offer remote-work as a fringe benefit. That sounds nice, but for a lot of areas of the country, it just wouldn't work. Hell, I remember living in a suburb of Boston, with commuter-rail access to the center city, which as late as 2003 did not have broadband internet in some parts of town. To this day, there are still rural, exurban, and outer-suburban areas without the network infrastructure to make telecommuting really viable. So while cultural attractions are nice, I think that they compete with extremely expensive housing, affordable transit, affordable network access, and job density as factors in where to live.
  - eropple 10y ago
    That's a fair cop, and I don't disagree as far as that goes. It's one of the reasons I really like your posts. =) I do think, however, that there are social issues driving it, too, that go beyond fairness of competition (at least as is generally understood). When you leach out the less privileged from your communities (be they gay, brown, black, trans, etc.), you're going to incur a competitive disadvantage. Bigger cities, for the most part, are a lot more welcoming, and present significant attractive forces that aren't really purely economic in nature, and by themselves can be a big counterweight to stuff like more expensive housing.
  - flukus 10y ago
    > * Lots of skilled workers, all in one place. A lot of software companies like to piss that advantage away by moving to some "technology hub" on the outskirts of major cities.
- komali2 10y ago
  Neal Stephenson put it something like: "The world had finally settled on an average comfort of living approximately equivalent to an Indian goat-farmer," in his book "Snow Crash." I guess a country would want to prevent that from happening, but on the other hand, wouldn't the human race strive to increase productivity and reduce scarcity to the point where the average lifestyle was a bit higher than an Indian goat-farmer? Because right now the average is I expect more along the lines of an untouchable.
  - barry-cotter 10y ago
    > the Invisible Hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani bricklayer would consider to be prosperity http://faculty2.ric.edu/rfeldstein/521_fall_08_files/excerptfromsnowcrash.pdf http://faculty2.ric.edu/rfeldstein/521_fall_08_files/excerpt...
mindcrime 10y ago
government enforces competition laws at every level, preventing markets from being captured. ROFLMFAO. It's government that causes markets to become captured. Ex: https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture It's extremely unlikely for a true monopoly to form in the absence of government regulation.
- eropple 10y ago
  Regulatory capture is by far not the only kind of capture, and a well-run government can avoid it. Just as a fair free market can avoid whatever you're goalpost-hauling at when you say "true monopoly". Of course, it's also much more likely that a market without regulation enables collusive behavior on the part of actors with the greater balance of power who don't have to answer to the society around them. Monopolies are not and have never been the only, or even the biggest, societal threat. Oligopolies and cartels exist because cooperating against the public is a better option for them than competing with one another and (as any game theorist will tell you) the first to be disloyal gains only a small edge at the cost of significantly reduced results for everybody. The only real threat to an entrenched oligopoly or a cartel in your sufficiently-free market is a necktie party on the streetcorner, and that in practice is rare 'cause paying for guns takes money.
  - mindcrime 10y ago
    and a well-run government can avoid it. Which is about as likely as the proverbial "sufficiently smart compiler". Oligopolies and cartels exist because cooperating against the public is a better option for them than competing with one another and (as any game theorist will tell you) the first to be disloyal gains only a small edge at the cost of significantly reduced results for everybody. But in reality, cartel members cheat all the time. Take OPEC, for example, where members are always producing more than their official limits.

eropple 10y ago

I agree with you in general, but there is also the specter of international competition that is a lot harder to meaningfully regulate (we've seen what protectionist policies do, to all of our detriment). Those network effects of big cities are not intrinsically tied to oligopolic structures. They're also just bigger and more attractive to a big chunk of the population, yeah?

leereeves 10y ago
How is China able to be so protectionist and so successful?
- eropple 10y ago
  Because they can be an order of magnitude cheaper because the health of the workers they barely pay doesn't matter to them. This is starting, already, to change, if slowly, both due to external pressures (PR) and the rise, again slowly, of markets that are in turn cheaper and even less give-a-shit than they are. (EDIT: Also, it's important to realize that that "success" very much does not extend to rural China. They're not airlifting money out there the way that we effectively do for our rural populations and so industry is even more concentrated than in the United States, when you adjust for relative population size.) And this is the argument of the types who want to rail against OSHA and minimum wages and the like in America, but frankly, I like not living in a society with factory-crippled invalids and suicide nets on the windows so I am so very unsympathetic. It's an externality that I'm certainly not comfortable overall with, but the bright spot is that those dangerous, barely-paying jobs are a rear-guard action as we play out the clock towards ever-cheaper, more-pervasive automation; that said, the inevitably oppressive effects of modern capital owning that automation is why I am effectively, if not in name, a socialist in 2017.
- scarface74 10y ago
  A lot of that "success" is not real. China is building infrastructure that no one is actually using. Temporarily propping up the economy but not tied to long term gains. https://www.google.com/amp/www.forbes.com/sites/kenrapoza/2016/12/19/china-bubble-economy-2017/amp/?client=safari https://www.google.com/amp/www.forbes.com/sites/kenrapoza/20...
  - leereeves 10y ago
    That's a minor quibble compared to how far they've come from where they started.
eli_gottlieb 10y ago
>Those network effects of big cities are not intrinsically tied to oligopolic structures. They're also just bigger and more attractive to a big chunk of the population, yeah? Well, they're certainly more attractive to young people nowadays, but at their core, they really offer a few things: * Lots of skilled workers, all in one place. * Lots of preexisting infrastructure, all in one place. * Low per-capita cost of additional infrastructure. On Hacker News there are occasional articles saying many programming jobs ought to offer remote-work as a fringe benefit. That sounds nice, but for a lot of areas of the country, it just wouldn't work. Hell, I remember living in a suburb of Boston, with commuter-rail access to the center city, which as late as 2003 did not have broadband internet in some parts of town. To this day, there are still rural, exurban, and outer-suburban areas without the network infrastructure to make telecommuting really viable. So while cultural attractions are nice, I think that they compete with extremely expensive housing, affordable transit, affordable network access, and job density as factors in where to live.
- eropple 10y ago
  That's a fair cop, and I don't disagree as far as that goes. It's one of the reasons I really like your posts. =) I do think, however, that there are social issues driving it, too, that go beyond fairness of competition (at least as is generally understood). When you leach out the less privileged from your communities (be they gay, brown, black, trans, etc.), you're going to incur a competitive disadvantage. Bigger cities, for the most part, are a lot more welcoming, and present significant attractive forces that aren't really purely economic in nature, and by themselves can be a big counterweight to stuff like more expensive housing.
- flukus 10y ago
  > * Lots of skilled workers, all in one place. A lot of software companies like to piss that advantage away by moving to some "technology hub" on the outskirts of major cities.
komali2 10y ago
Neal Stephenson put it something like: "The world had finally settled on an average comfort of living approximately equivalent to an Indian goat-farmer," in his book "Snow Crash." I guess a country would want to prevent that from happening, but on the other hand, wouldn't the human race strive to increase productivity and reduce scarcity to the point where the average lifestyle was a bit higher than an Indian goat-farmer? Because right now the average is I expect more along the lines of an untouchable.
- barry-cotter 10y ago
  > the Invisible Hand has taken all those historical inequities and smeared them out into a broad global layer of what a Pakistani bricklayer would consider to be prosperity http://faculty2.ric.edu/rfeldstein/521_fall_08_files/excerptfromsnowcrash.pdf http://faculty2.ric.edu/rfeldstein/521_fall_08_files/excerpt...

mindcrime 10y ago

government enforces competition laws at every level, preventing markets from being captured. ROFLMFAO. It's government that causes markets to become captured. Ex: https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture It's extremely unlikely for a true monopoly to form in the absence of government regulation.

eropple 10y ago
Regulatory capture is by far not the only kind of capture, and a well-run government can avoid it. Just as a fair free market can avoid whatever you're goalpost-hauling at when you say "true monopoly". Of course, it's also much more likely that a market without regulation enables collusive behavior on the part of actors with the greater balance of power who don't have to answer to the society around them. Monopolies are not and have never been the only, or even the biggest, societal threat. Oligopolies and cartels exist because cooperating against the public is a better option for them than competing with one another and (as any game theorist will tell you) the first to be disloyal gains only a small edge at the cost of significantly reduced results for everybody. The only real threat to an entrenched oligopoly or a cartel in your sufficiently-free market is a necktie party on the streetcorner, and that in practice is rare 'cause paying for guns takes money.
- mindcrime 10y ago
  and a well-run government can avoid it. Which is about as likely as the proverbial "sufficiently smart compiler". Oligopolies and cartels exist because cooperating against the public is a better option for them than competing with one another and (as any game theorist will tell you) the first to be disloyal gains only a small edge at the cost of significantly reduced results for everybody. But in reality, cartel members cheat all the time. Take OPEC, for example, where members are always producing more than their official limits.