3 ms·

Because you need to provide something different. "Pure" competition doesn't exists, all companies and products are different

fragmede 7y ago
Yes that's exactly the point. The fiction under which corporations are granted their strange and powerful place in society, is that the invisible hand of the free market results in the best, floating to the top. Unfortunately, that invisible free hand is more imaginary than real, giving incumbents far more power than intended - assuming that you view pure competition as the ideal state, rather than a malignant state.
- Mirioron 7y ago
  But they have to be different - that's how things improve. If they were exactly the same then what difference does it make for the consumer which product they buy? They're identical.
  - fragmede 7y ago
    better, yes. the issue is that it has to be monumentally better in order to complete. Say I came up with a new algorithm for search, and an angel funded me at the same level that Google started off at. In order for MyNewSearchCo to be able to competitive, my algorithm needs to be 1,000% better; 10 or 50 or 100 percent isn't enough. Considering that I'd also have to build my own ad-network and crawl all of the Internet, I'm not sure it's even possible to compete at this point. Especially once Google sees me as a threat, the sheer amount of resources (and not just technical) they could bring to bear against a small dozen person start-up is ludicrous. That is where the harm comes in - as a consumer, I'd love a 50% better search (insofar as thats readily quantifiable), but the current architecture of the market ends up preventing this from happening!
- solidsnack9000 7y ago
  Most corporations aren't big and don't have a lot of power -- laundromats, machine tool manufacturers, and so many other businesses are formed as corporations (and not as sole proprietorships). How fictive is the invisible hand on that scale? Lots of money confers lots of power, sure, though this is not anything peculiar to corporations. Corporations are a strange kind of ownership -- since shareholders "own" the corporation but have almost no control of it or any direct access to its assets -- but what is the "strange and powerful" place that corporations are granted?
dredmorbius 7y ago
Competing against price-cutting, product-dumping, employee-luring, FUD campaigns, bundling and tying, exclusive dealings arrangements, legislative lobbying, patent lawsuits, bribery, forced acquisitions (e.g., Luxottica & Oakley) and any of the numerous other tactics that are not "pure competition" but are and have been used against challengers, is exceedingly difficult. Sneaking up under the radar, making a lateral move, or finding a patron or sweetheart deal as an entry into a market is frequently required. Microsoft's break was its exclusive, per-CPU licensing deal with IBM, later extended to other OEMs, and followed by bundling (Office) and tying/dumping (Internet Explorer). Government contracts (national, state, or local) can be a path. Emerging during a period of general economic panic works for others -- both Google and Facebook effectively emerged during financial squeezes (and legal impairments) on incumbents or potential spoilers (2001, 2007-8). Bernhard J. Stern's "Resistances to the Adoption of Technological Innovations" (1935) details numerous instances and methods of such dirty tricks, and is rapidly becoming among my favourite references to these: https://archive.org/details/technologicaltre1937unitrich/page/39 https://archive.org/details/technologicaltre1937unitrich/pag... Markdown: https://pastebin.com/raw/Bapu75is https://pastebin.com/raw/Bapu75is

fragmede 7y ago

Yes that's exactly the point. The fiction under which corporations are granted their strange and powerful place in society, is that the invisible hand of the free market results in the best, floating to the top. Unfortunately, that invisible free hand is more imaginary than real, giving incumbents far more power than intended - assuming that you view pure competition as the ideal state, rather than a malignant state.

Mirioron 7y ago
But they have to be different - that's how things improve. If they were exactly the same then what difference does it make for the consumer which product they buy? They're identical.
- fragmede 7y ago
  better, yes. the issue is that it has to be monumentally better in order to complete. Say I came up with a new algorithm for search, and an angel funded me at the same level that Google started off at. In order for MyNewSearchCo to be able to competitive, my algorithm needs to be 1,000% better; 10 or 50 or 100 percent isn't enough. Considering that I'd also have to build my own ad-network and crawl all of the Internet, I'm not sure it's even possible to compete at this point. Especially once Google sees me as a threat, the sheer amount of resources (and not just technical) they could bring to bear against a small dozen person start-up is ludicrous. That is where the harm comes in - as a consumer, I'd love a 50% better search (insofar as thats readily quantifiable), but the current architecture of the market ends up preventing this from happening!
solidsnack9000 7y ago
Most corporations aren't big and don't have a lot of power -- laundromats, machine tool manufacturers, and so many other businesses are formed as corporations (and not as sole proprietorships). How fictive is the invisible hand on that scale? Lots of money confers lots of power, sure, though this is not anything peculiar to corporations. Corporations are a strange kind of ownership -- since shareholders "own" the corporation but have almost no control of it or any direct access to its assets -- but what is the "strange and powerful" place that corporations are granted?

dredmorbius 7y ago

Competing against price-cutting, product-dumping, employee-luring, FUD campaigns, bundling and tying, exclusive dealings arrangements, legislative lobbying, patent lawsuits, bribery, forced acquisitions (e.g., Luxottica & Oakley) and any of the numerous other tactics that are not "pure competition" but are and have been used against challengers, is exceedingly difficult. Sneaking up under the radar, making a lateral move, or finding a patron or sweetheart deal as an entry into a market is frequently required. Microsoft's break was its exclusive, per-CPU licensing deal with IBM, later extended to other OEMs, and followed by bundling (Office) and tying/dumping (Internet Explorer). Government contracts (national, state, or local) can be a path. Emerging during a period of general economic panic works for others -- both Google and Facebook effectively emerged during financial squeezes (and legal impairments) on incumbents or potential spoilers (2001, 2007-8). Bernhard J. Stern's "Resistances to the Adoption of Technological Innovations" (1935) details numerous instances and methods of such dirty tricks, and is rapidly becoming among my favourite references to these: https://archive.org/details/technologicaltre1937unitrich/page/39 https://archive.org/details/technologicaltre1937unitrich/pag... Markdown: https://pastebin.com/raw/Bapu75is https://pastebin.com/raw/Bapu75is