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Thiel is challenging you to consider that the government's antitrust actions were unnecessary and counterproductive: Unnecessary because eventually upstarts fi

Thiel is challenging you to consider that the government's antitrust actions were unnecessary and counterproductive: Unnecessary because eventually upstarts find a way to leverage new technology to open new markets where monopolists' advantages no longer apply. Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition. You may disagree, but to refute his argument effectively you'll have to do better than merely reassert conventional wisdom about monopolies.

eggie 10y ago
> Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition. If you have enough resources, it's often it's cheaper to quash-and-copy the competition than innovate. You may start labs to grab up smart minds, but this practice seems to be as much about suppressing competition as culturing innovation. And it seems to more to support the former than the latter. I would love some good examples of how this isn't the case.
dragonwriter 10y ago
> Thiel is challenging you to consider that the government's antitrust actions were unnecessary and counterproductive: Unnecessary because eventually upstarts find a way to leverage new technology to open new markets where the monopolists advantages no longer apply. But none of the examples he gives demonstrates that, because they are not examples where the monoplist was displaced independently of antitrust actions. > Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition. Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly, either to prevent being displaced or to monoplize another market. So, even if benevolent monopolies are eventually displaced and good for the research they can produce, the US antitrust system isn't directed at them.
- smitherfield 10y ago
  > But none of the examples he gives demonstrates that, because they are not examples where the moboplist was displaced independently of antitrust actions. IBM and Microsoft weren't dethroned until roughly a decade later, so it's a real stretch to claim any kind of causal relationship. Especially because they maintained — to this day — their monopolies in mainframes and PC operating systems. It's just that technological change made their monopolies less relevant. There was certainly a causal relationship WRT AT&T, but the conclusion to that tale does not go "and then, American telecommunications companies became well-known for their low prices and excellent customer service." > Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly That's rather begging the question. The DoJ's cases against IBM and Microsoft, in particular, may have been financial bonanzas for the legal industry, but the central legal claims were Kafkaesque: the supposed "unfair competition" was that IBM bundled support services with its computers and Microsoft bundled software with its operating system. Essentially, the DoJ's claim was that their products offered too good a value to consumers, and ought to have been made worse so their competitors' products would have a better chance. IBM and Microsoft may well have engaged in genuine anti-competitive practices (ironically, MS' sabotage of OS/2 would be a good example), but those weren't. And maybe the DoJ could have brought cases against them that actually served to the benefit of consumers, but again, those didn't.
  - dragonwriter 10y ago
    > IBM and Microsoft weren't dethroned until roughly a decade later, so it's a real stretch to claim any kind of causal relationship. Microsoft, strictly speaking, still hasn't been dethroned, it's just the market in which it has its monopoly has itself become less important in the grand scheme of things. OTOH, it became less important because of other markets to which the government action prevented it from extending it's monopoly, which pretty clearly shows the relevance of the government action. Likewise, the IBM antitrust action is what created the boom in independent comouter software and services businesses, which directly led to IBM being dethroned because software commoditized the computers running it.
TheRealDunkirk 10y ago
And yet, every time someone tries "a way to leverage new technology to open new markets where monopolists' advantages no longer apply" in the form of a new municipal fiber or wireless internet service, they're shut down by lawsuits on the basis of legislation the monopolists had written, which protect the likes of Comcast and TW from competition.

eggie 10y ago

> Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition. If you have enough resources, it's often it's cheaper to quash-and-copy the competition than innovate. You may start labs to grab up smart minds, but this practice seems to be as much about suppressing competition as culturing innovation. And it seems to more to support the former than the latter. I would love some good examples of how this isn't the case.

dragonwriter 10y ago

> Thiel is challenging you to consider that the government's antitrust actions were unnecessary and counterproductive: Unnecessary because eventually upstarts find a way to leverage new technology to open new markets where the monopolists advantages no longer apply. But none of the examples he gives demonstrates that, because they are not examples where the monoplist was displaced independently of antitrust actions. > Counterproductive because monopolists have scale that allows programs and research that cannot develop in companies engaged in perfect competition. Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly, either to prevent being displaced or to monoplize another market. So, even if benevolent monopolies are eventually displaced and good for the research they can produce, the US antitrust system isn't directed at them.

smitherfield 10y ago
> But none of the examples he gives demonstrates that, because they are not examples where the moboplist was displaced independently of antitrust actions. IBM and Microsoft weren't dethroned until roughly a decade later, so it's a real stretch to claim any kind of causal relationship. Especially because they maintained — to this day — their monopolies in mainframes and PC operating systems. It's just that technological change made their monopolies less relevant. There was certainly a causal relationship WRT AT&T, but the conclusion to that tale does not go "and then, American telecommunications companies became well-known for their low prices and excellent customer service." > Antitrust action does not occur against benevolent monopolies in the US system, it only occurs when a monopolist illegally leveraged their monopoly That's rather begging the question. The DoJ's cases against IBM and Microsoft, in particular, may have been financial bonanzas for the legal industry, but the central legal claims were Kafkaesque: the supposed "unfair competition" was that IBM bundled support services with its computers and Microsoft bundled software with its operating system. Essentially, the DoJ's claim was that their products offered too good a value to consumers, and ought to have been made worse so their competitors' products would have a better chance. IBM and Microsoft may well have engaged in genuine anti-competitive practices (ironically, MS' sabotage of OS/2 would be a good example), but those weren't. And maybe the DoJ could have brought cases against them that actually served to the benefit of consumers, but again, those didn't.
- dragonwriter 10y ago
  > IBM and Microsoft weren't dethroned until roughly a decade later, so it's a real stretch to claim any kind of causal relationship. Microsoft, strictly speaking, still hasn't been dethroned, it's just the market in which it has its monopoly has itself become less important in the grand scheme of things. OTOH, it became less important because of other markets to which the government action prevented it from extending it's monopoly, which pretty clearly shows the relevance of the government action. Likewise, the IBM antitrust action is what created the boom in independent comouter software and services businesses, which directly led to IBM being dethroned because software commoditized the computers running it.

TheRealDunkirk 10y ago

And yet, every time someone tries "a way to leverage new technology to open new markets where monopolists' advantages no longer apply" in the form of a new municipal fiber or wireless internet service, they're shut down by lawsuits on the basis of legislation the monopolists had written, which protect the likes of Comcast and TW from competition.