5 ms·

MIT Professor says powerful elites set up monopolies so they can abuse consumers

71 points by teslacar 10y ago

bediger4000 10y ago
Amusing who argues against the idea that elites set up monopolies to accrue money and power.
- deleted 10y ago
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M_Grey 10y ago
I imagine that it would be intolerable to have a huge amount of money and power, and also accept that you're part of the root cause of the worst the world has to offer. When you can convince yourself that you're a "thought leader" instead, and that you would be more responsible with those riches anyway... well... of coursed you believe that. Most people with very little personal impact and responsibility struggle to accept their small role in things. I suppose it would be too much to expect more from people just because they managed to get money. It's not too much to demand though.
- xiphias 10y ago
  What's interesting is Peter Thiel is one of the few rich people who accepts and says it openly that creating monopoly is the only way to get extremely rich. Although I don't like the deals he does to get government contracts, I can't deny that he's quite successful in creating monopoly.
  - M_Grey 10y ago
    I don't know the man, only what any of us can have heard, but my impression is that he's untroubled by the moral dimension of things. I suspect that a combination of intelligence, self-control, and a substantial lack of empathy can probably allow one to both acquire and enjoy immense wealth.
    - ed_balls 10y ago
      I don't think he approves or condemns. He says that monopoly of craftsmanship(product so good that you don't want to switch) like Google is not that bad. It seems the antitrust action is inevitable. May first happen in EU.
      - xiphias 10y ago
        I can't comment on Google, as I work there, but I started reading the book, and it looks interesting..I wish history was taught like this.
  - whack 10y ago
    To be fair to him, the argument he's making is in essence the same argument behind the patent system. That in a world of perfect economic competition, all economic profits will be competed away. In such a world, no one has an incentive to create or fund startups, because even if they are successful, their economy profits will vanish due to competition. Hence, if you want to be successful as a startup, you need to find a business model that grants you at least a temporarily Monopoly. This also happens to benefit society for the same reasons that a patent system benefits society. You may not buy the intellectual argument above, but at least he isn't saying it with malevolent intent.
    - kem 10y ago
      Is it really true that in a world of perfect competition profits would be competed away? It depends on what you mean by "perfect," but I always assumed there would still be differences in skills, access to certain resources, and whatnot, so that profits might be decreased, but not eliminated. The point you're making, though, is why patents are so important to get right and not overextend. I'm personally opposed to them completely, although I respect arguments for limited patents.
      - slavik81 10y ago
        'Perfect competition' is a technical term, like 'ideal gas'. https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
        whack 10y ago
        To add on, my previous post was referring to "economic profits", which is different from nominal profits. A sublink from above clarifies this further. https://en.wikipedia.org/wiki/Perfect_competition#Normal_profit https://en.wikipedia.org/wiki/Perfect_competition#Normal_pro...
      - Nomentatus 10y ago
        It's probably worse than that. It's probably a "dollar auction." Worse than perfect competition, a species of prisoner's dilemma.
cypherpunks01 10y ago
I'm pretty sure you don't need a PhD to figure that one out!
- eli_gottlieb 10y ago
  Indeed. And worse, we have antitrust laws on the books already. All that remains is to actually enforce them.
dang 10y ago
It breaks the HN guidelines to rewrite titles like this, so please don't. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
coldtea 10y ago
>MIT Professor says powerful elites set up monopolies so they can abuse consumers It takes a MIT processor to know that?
- jhoechtl 10y ago
  No, the majority wouldn't listen to others
jeffbush 10y ago
I read the book "Why Nations Fail." I found it to be poorly organized and repetitive. But the biggest problem I had with it was that it suffered from the fallacy of the single cause. The authors tried to attack every other theory about the prosperity of nations in favor of their one thesis. Their arguments against other theories seemed weak and poorly supported. While I think there is truth to their hypothesis that economic prosperity is related to inclusiveness of a society, and they presented some sound arguments for it, trying to say it is the only cause is a bridge too far in my opinion.

71 points by teslacar 10y ago

bediger4000 10y ago

Amusing who argues against the idea that elites set up monopolies to accrue money and power.

deleted 10y ago
[deleted]
deleted 10y ago
[deleted]

M_Grey 10y ago

I imagine that it would be intolerable to have a huge amount of money and power, and also accept that you're part of the root cause of the worst the world has to offer. When you can convince yourself that you're a "thought leader" instead, and that you would be more responsible with those riches anyway... well... of coursed you believe that. Most people with very little personal impact and responsibility struggle to accept their small role in things. I suppose it would be too much to expect more from people just because they managed to get money. It's not too much to demand though.

xiphias 10y ago
What's interesting is Peter Thiel is one of the few rich people who accepts and says it openly that creating monopoly is the only way to get extremely rich. Although I don't like the deals he does to get government contracts, I can't deny that he's quite successful in creating monopoly.
- M_Grey 10y ago
  I don't know the man, only what any of us can have heard, but my impression is that he's untroubled by the moral dimension of things. I suspect that a combination of intelligence, self-control, and a substantial lack of empathy can probably allow one to both acquire and enjoy immense wealth.
  - ed_balls 10y ago
    I don't think he approves or condemns. He says that monopoly of craftsmanship(product so good that you don't want to switch) like Google is not that bad. It seems the antitrust action is inevitable. May first happen in EU.
    - xiphias 10y ago
      I can't comment on Google, as I work there, but I started reading the book, and it looks interesting..I wish history was taught like this.
- whack 10y ago
  To be fair to him, the argument he's making is in essence the same argument behind the patent system. That in a world of perfect economic competition, all economic profits will be competed away. In such a world, no one has an incentive to create or fund startups, because even if they are successful, their economy profits will vanish due to competition. Hence, if you want to be successful as a startup, you need to find a business model that grants you at least a temporarily Monopoly. This also happens to benefit society for the same reasons that a patent system benefits society. You may not buy the intellectual argument above, but at least he isn't saying it with malevolent intent.
  - kem 10y ago
    Is it really true that in a world of perfect competition profits would be competed away? It depends on what you mean by "perfect," but I always assumed there would still be differences in skills, access to certain resources, and whatnot, so that profits might be decreased, but not eliminated. The point you're making, though, is why patents are so important to get right and not overextend. I'm personally opposed to them completely, although I respect arguments for limited patents.
    - slavik81 10y ago
      'Perfect competition' is a technical term, like 'ideal gas'. https://en.wikipedia.org/wiki/Perfect_competition https://en.wikipedia.org/wiki/Perfect_competition
      - whack 10y ago
        To add on, my previous post was referring to "economic profits", which is different from nominal profits. A sublink from above clarifies this further. https://en.wikipedia.org/wiki/Perfect_competition#Normal_profit https://en.wikipedia.org/wiki/Perfect_competition#Normal_pro...
    - Nomentatus 10y ago
      It's probably worse than that. It's probably a "dollar auction." Worse than perfect competition, a species of prisoner's dilemma.

cypherpunks01 10y ago

I'm pretty sure you don't need a PhD to figure that one out!

eli_gottlieb 10y ago
Indeed. And worse, we have antitrust laws on the books already. All that remains is to actually enforce them.

dang 10y ago

It breaks the HN guidelines to rewrite titles like this, so please don't. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

coldtea 10y ago

>MIT Professor says powerful elites set up monopolies so they can abuse consumers It takes a MIT processor to know that?

jhoechtl 10y ago
No, the majority wouldn't listen to others

jeffbush 10y ago

I read the book "Why Nations Fail." I found it to be poorly organized and repetitive. But the biggest problem I had with it was that it suffered from the fallacy of the single cause. The authors tried to attack every other theory about the prosperity of nations in favor of their one thesis. Their arguments against other theories seemed weak and poorly supported. While I think there is truth to their hypothesis that economic prosperity is related to inclusiveness of a society, and they presented some sound arguments for it, trying to say it is the only cause is a bridge too far in my opinion.