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It's specifically in reference to tech firms. He postulates that competition causes human suffering since people work harder and harder for diminishing rewards

It's specifically in reference to tech firms. He postulates that competition causes human suffering since people work harder and harder for diminishing rewards as things get increasingly competitive. On the other side, monopolies are established because they invented some novel technology that other people couldn't easily reproduce, or did something so much better than the competition that everyone chooses to use them. Thus, he says monopolies are responsible for making society richer. Moreover, he says they reduce human suffering because 1. the great societal value produced by the monopoly, 2. the workers at the firms don't need to work as hard since they don't have competition, and 3. they can spend more on r&d, thus adding even more value to society. The statement is surprising on its face, but he plays a good devil's advocate. There are plenty of holes to poke in his arguments, so have at it.

eiaoa 8y ago
> There are plenty of holes to poke in his arguments, so have at it. 1. You're not going to truly release the social value of a monopoly unless you socialize it, either through social control or regulation. Without that, the monopoly will mainly serve to benefit its owners. 2. Monopoly R&D expenditure will likely be less than the excess profit captured by the monopoly's owners, and mainly motivated by potential regulation. IIRC, the main raison d'être for Bell Labs to exist as it did was to convince regulators to not break up AT&T. Without that threat it would have likely been more focused on AT&T's profit motive and less on generalized scientific advancement. 3. Monopolies (socialized or otherwise) will more likely end in stagnation.
- gnarcoregrizz 8y ago
  > 1. You're not going to truly release the social value of a monopoly unless you socialize it, either through social control or regulation. I somewhat disagree. There are some monopolies which become more valuable to society the larger they are due to network effects. One example is Google maps. I suspect the more people use maps, the more accurate their live traffic data will be, which gives every other user more accurate information. Marketplaces are another example of network effects benefitting users - the more buyers and sellers in one marketplace, the easier it becomes for them to find one another. > 2. IIRC, the main raison d'être for Bell Labs to exist as it did was to convince regulators to not break up AT&T Interesting, I was going to use Bell Labs as an argument in favor of monopolies producing r&d. It seems like they invented everything!
- dustingetz 8y ago
  i want to state in stronger words than my sibling that the entire value of networks emerges directly from their inherent monopoly
ashrk 8y ago
This is all stuff covered in my undergrad International Political Economy class in the early 2000s, and I'm pretty sure none of it was fresh then. The benefits of the market largely exist in the margins between awful centralized abuse on one side and the unsustainable misery of the econ 101 perfect competition market on the other. States can, to some degree, determine where on this field the economies they create and guide land.

eiaoa 8y ago

> There are plenty of holes to poke in his arguments, so have at it. 1. You're not going to truly release the social value of a monopoly unless you socialize it, either through social control or regulation. Without that, the monopoly will mainly serve to benefit its owners. 2. Monopoly R&D expenditure will likely be less than the excess profit captured by the monopoly's owners, and mainly motivated by potential regulation. IIRC, the main raison d'être for Bell Labs to exist as it did was to convince regulators to not break up AT&T. Without that threat it would have likely been more focused on AT&T's profit motive and less on generalized scientific advancement. 3. Monopolies (socialized or otherwise) will more likely end in stagnation.

gnarcoregrizz 8y ago
> 1. You're not going to truly release the social value of a monopoly unless you socialize it, either through social control or regulation. I somewhat disagree. There are some monopolies which become more valuable to society the larger they are due to network effects. One example is Google maps. I suspect the more people use maps, the more accurate their live traffic data will be, which gives every other user more accurate information. Marketplaces are another example of network effects benefitting users - the more buyers and sellers in one marketplace, the easier it becomes for them to find one another. > 2. IIRC, the main raison d'être for Bell Labs to exist as it did was to convince regulators to not break up AT&T Interesting, I was going to use Bell Labs as an argument in favor of monopolies producing r&d. It seems like they invented everything!
dustingetz 8y ago
i want to state in stronger words than my sibling that the entire value of networks emerges directly from their inherent monopoly

ashrk 8y ago

This is all stuff covered in my undergrad International Political Economy class in the early 2000s, and I'm pretty sure none of it was fresh then. The benefits of the market largely exist in the margins between awful centralized abuse on one side and the unsustainable misery of the econ 101 perfect competition market on the other. States can, to some degree, determine where on this field the economies they create and guide land.