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I think most people recognize and understand that amazon neither has a relevant market share nor a monopoly in the traditional sense of the word. The author mak

I think most people recognize and understand that amazon neither has a relevant market share nor a monopoly in the traditional sense of the word. The author makes a good point that it is very much political as much economic. The latter is important because the traditional understanding of a monopoly is somewhat antiquated with tech and has led to many people arguing to change its definition. The most prominent example is Lina Kahn's wildy successful/read paper in the Yale Law Journal about amazon's antitrust paradox and how a company can operate in monopolistic ways without having a significant market share. https://www.yalelawjournal.org/note/amazons-antitrust-paradox https://www.yalelawjournal.org/note/amazons-antitrust-parado... A similar case is Apple and Spotify competing to grow their music streaming service. It will be interesting to see how the current political framework is adjusted for this new economy dominated by big tech.

nabla9 7y ago
The modern view is the traditional view in the back to normal sense. In the US Robert Bork's book "The Antitrust Paradox" started a period of time where the antitrust law was only about benefits to consumers and overall efficiency. The traditional and the modern viewpoint is that the role of antitrust laws plays role in controlling economic power in the public interests. Vertical agreements and price discrimination can be prohibited.
- crazypython 7y ago
  How monopolistic a company is its demand elasticity.
- NeedMoreTea 7y ago
  I've been reading The Economist's Hour by Binyamin Applebaum[1], which presents the dramatic changes of antitrust interpretation in some depth. Recommended read btw. Bork credited Aaron Director, one of the first generation of the Chicago School and Friedman's brother in law, as his main influence. So making the consumer and efficiency the focus can be considered an early casualty of the wave of neoliberal deregulation we've been living with for decades. Of course what is not considered is impact on workers, innovation, political power, market etc. Essentially it's hollowed out to benefit large business. [1] https://www.economist.com/books-and-arts/2019/08/31/when-economists-ruled-the-world https://www.economist.com/books-and-arts/2019/08/31/when-eco...
  - mooreds 7y ago
    You might enjoy this podcast interview with Applebaum: https://www.econtalk.org/binyamin-appelbaum-on-the-economists-hour/ https://www.econtalk.org/binyamin-appelbaum-on-the-economist...
    - NeedMoreTea 7y ago
      Thanks for that, a marvellous listen! Really refreshing to hear two knowledgeable people who disagree on so many of the conclusions having such an engaging and positive conversation. Then find shared common ground so easily with both good at staying on point. Nice to hear he had a high opinion of the book too -- outside those conclusions drawn. I'd have quite liked them to keep going... :)
belltaco 7y ago
>amazon's antitrust paradox Haven't read the paper but isn't it very similar if not the same as Walmart's monopolistic behavior with suppliers, which has been going on before Amazon became big?
clairity 7y ago
the easiest way to conceptualize monopoly is "the power to limit the possibilities and decisions of other companies" (other than via transparent buy/sell decisions in the marketplace of course). the size of a company relative to some industry is an indicator of monopoly power, but not a necessary nor sufficient condition of it. the idealization that markets only care about price signals (and particularly tries to ignore political concerns) doesn't represent any real market. antitrust (and similar laws) try to reconcile this discrepancy so that markets can function more closely to their idealized form in inherently political environments.
- kortilla 7y ago
  > the power to limit the possibilities and decisions of other companies This is a very naive view of the world. In many non-consumer industries, companies limit the possibilities and decisions of other companies via contracts as a matter of business every day.
  - clairity 7y ago
    that's not even clever. not every contract is intended to exert monopoly power, but contracts can be and are often used to enforce monopoly power.
    - solveit 7y ago
      Then your helpful conceptualisation isn't so helpful unless you already know what a monopoly is.
      - clairity 7y ago
        nothing helps if you make simple logic errors.
        kortilla 7y ago
        There are no simple logic errors. Your explanation is a joke based on the world view good companies exist in a vacuum and are incapable of influencing other companies. Look into an industry like smelting for ore. There usually aren’t monopolies but the few that exist are so far apart that the switching costs to a competitor are really painful. This gives them the ability to influence decisions. Here’s another one. A mine needs nash and the only reasonable price is when buying it from a supplier only 300 miles away with a direct rail connection vs trucking from 800 miles away. Buying from the 800 mile supplier causes shipping costs so large the mine might lose profitability. This does not make the nash supplier a monopoly despite its incredibly strong negotiating position that it can use to get the mine to agree to long-term volume lock-ins, exclusivity agreements, etc. Again, by your definition, tons of businesses would be considered monopolies that no economist would because it makes the meaning useless.
mytailorisrich 7y ago
It seems fashionable these days to redefine terms to suit an agenda. I think that this should be pushed back against. The term 'monopoly' is clear and well-defined. If Amazon is not a monopoly "in the traditional sense of the word" then the correct term should be used to qualify what Amazon is instead of trying to redefine the word in order to be able to label Amazon with it.
- nicoburns 7y ago
  Indeed. And what is weirder is that there seems to be an attitude that if it's not a monopoly then it must be fine and should be allowed.
- nabla9 7y ago
  Monopoly is used as a generic term to discuss everything under antitrust and competition law with layman, because people don't know what monopoly power, market power, barriers to entry or exit, restraint of trade, price discrimination, market failures etc. mean. Everyone knows what pure monopoly is. This creates problems if people take it too literally.
  - dahfizz 7y ago
    Yeah, that's the whole problem. "Monopoly" has become a generic and unspecific term, but it's still very politically significant. So laypeople cry for X company to be regulated "because they're a monopoly" without having to have any sort of actual objective backing. The point OP is making, and you seem to agree with him, is that we shouldn't overload the terms. "Monopoly" is a very specific enconomic term, a political term, and a subjective layterm used to portray large companies negatively. Bundling all those meanings together creates miscommunications.
    - nabla9 7y ago
      My point is that just because word "monopoly" is used as a shorthand for more accurate term "monopoly power" it don't make calls for regulation any less important.
  - deleted 7y ago
Iv 7y ago
I don't think that's the definition of a monopoly that is problematic here, more the definition of a market, which is a more abstract group, composed of competitors and that companies are supposed to be able to enter somehow easily. The debate there is whether online shops and physical shops are in the same market, and what geographical divisions make sense for online shops. It is also in the definition of tech markets, which are starting to clear up. We know for instance that it is not necessarily easy for a tech giant in ads/search (Google) to enter the social media arena, so these two things are separate. Hosting and cloud computing seem to be very similar markets, most players there having offers in both. I think the market of online banking is being defined right now with many unconventional players showing that ecommerce may actually belong to the same market as paypal. Defining monopolies is much easier, if you start from the (rather political) use of the concept : deciding when a company has to be broken up to preserve competition. MArkets are just a tool to create definitions of monopolies. That debate is too often obscured by various ideologies on the wisdom of the crowds and invisible hands imbued with various mystical properties.
jdkee 7y ago
When one person is worth 100,000,000,000 plus and thousands of delivery drivers have to pee in bottles while making slightly above minimum wage is the time when the guillotines need to come out.
- echelon 7y ago
  > When one person is worth 100,000,000,000 plus On paper. If Bezos were to liquidate everything he'd have lots of trouble getting that amount. Maybe a slow divestment, though people would also question that move... > [...] and thousands of delivery drivers have to pee in bottles while making slightly above minimum wage One solution is certainly legislative. I'm not so sure that will fix the problem though as prices and inflation will increase due to more money flooding the system. Better access to high-quality education is something we should be providing. But that typically only helps the youngest. I don't know what the appropriate fix is. > [...] is the time when the guillotines need to come out. Violence isn't the answer. Have all other avenues even been exhausted -- why is violence the one to jump to? Are you willing to go to jail or be executed for killing Bezos? I don't think so. At the end of the day, people still aren't uncomfortable enough to want blood. This is just armchair anger. There are better, more productive ways. If the situation were truly to deteriorate to the point where people were dying of starvation, then maybe we'll see violence. I don't think we're anywhere close to that.
  - dzhiurgis 7y ago
    > On paper. But isn't that everyone who's a least a little rich or has common sense in finance? I was trying to find a list of billionaires by cash in bank, but truth is no one really keeps cash - because it's stupid. That said I am not against being wealthy at all. Distributing Amazon's shares away to random public would just destroy company.
jellicle 7y ago
I often find people first assume something that isn't in US anti-trust law - that one must have a "monopoly" in order to be problematic - and then use a narrow definition of monopoly to conclude that no legal problem exists. US law talks a lot about "market power", not monopoly. And... > economy dominated by big tech we both seem to think it is clear that there is market power.

nabla9 7y ago

The modern view is the traditional view in the back to normal sense. In the US Robert Bork's book "The Antitrust Paradox" started a period of time where the antitrust law was only about benefits to consumers and overall efficiency. The traditional and the modern viewpoint is that the role of antitrust laws plays role in controlling economic power in the public interests. Vertical agreements and price discrimination can be prohibited.

crazypython 7y ago
How monopolistic a company is its demand elasticity.
NeedMoreTea 7y ago
I've been reading The Economist's Hour by Binyamin Applebaum[1], which presents the dramatic changes of antitrust interpretation in some depth. Recommended read btw. Bork credited Aaron Director, one of the first generation of the Chicago School and Friedman's brother in law, as his main influence. So making the consumer and efficiency the focus can be considered an early casualty of the wave of neoliberal deregulation we've been living with for decades. Of course what is not considered is impact on workers, innovation, political power, market etc. Essentially it's hollowed out to benefit large business. [1] https://www.economist.com/books-and-arts/2019/08/31/when-economists-ruled-the-world https://www.economist.com/books-and-arts/2019/08/31/when-eco...
- mooreds 7y ago
  You might enjoy this podcast interview with Applebaum: https://www.econtalk.org/binyamin-appelbaum-on-the-economists-hour/ https://www.econtalk.org/binyamin-appelbaum-on-the-economist...
  - NeedMoreTea 7y ago
    Thanks for that, a marvellous listen! Really refreshing to hear two knowledgeable people who disagree on so many of the conclusions having such an engaging and positive conversation. Then find shared common ground so easily with both good at staying on point. Nice to hear he had a high opinion of the book too -- outside those conclusions drawn. I'd have quite liked them to keep going... :)

belltaco 7y ago

>amazon's antitrust paradox Haven't read the paper but isn't it very similar if not the same as Walmart's monopolistic behavior with suppliers, which has been going on before Amazon became big?

clairity 7y ago

the easiest way to conceptualize monopoly is "the power to limit the possibilities and decisions of other companies" (other than via transparent buy/sell decisions in the marketplace of course). the size of a company relative to some industry is an indicator of monopoly power, but not a necessary nor sufficient condition of it. the idealization that markets only care about price signals (and particularly tries to ignore political concerns) doesn't represent any real market. antitrust (and similar laws) try to reconcile this discrepancy so that markets can function more closely to their idealized form in inherently political environments.

kortilla 7y ago
> the power to limit the possibilities and decisions of other companies This is a very naive view of the world. In many non-consumer industries, companies limit the possibilities and decisions of other companies via contracts as a matter of business every day.
- clairity 7y ago
  that's not even clever. not every contract is intended to exert monopoly power, but contracts can be and are often used to enforce monopoly power.
  - solveit 7y ago
    Then your helpful conceptualisation isn't so helpful unless you already know what a monopoly is.
    - clairity 7y ago
      nothing helps if you make simple logic errors.
      - kortilla 7y ago
        There are no simple logic errors. Your explanation is a joke based on the world view good companies exist in a vacuum and are incapable of influencing other companies. Look into an industry like smelting for ore. There usually aren’t monopolies but the few that exist are so far apart that the switching costs to a competitor are really painful. This gives them the ability to influence decisions. Here’s another one. A mine needs nash and the only reasonable price is when buying it from a supplier only 300 miles away with a direct rail connection vs trucking from 800 miles away. Buying from the 800 mile supplier causes shipping costs so large the mine might lose profitability. This does not make the nash supplier a monopoly despite its incredibly strong negotiating position that it can use to get the mine to agree to long-term volume lock-ins, exclusivity agreements, etc. Again, by your definition, tons of businesses would be considered monopolies that no economist would because it makes the meaning useless.

mytailorisrich 7y ago

It seems fashionable these days to redefine terms to suit an agenda. I think that this should be pushed back against. The term 'monopoly' is clear and well-defined. If Amazon is not a monopoly "in the traditional sense of the word" then the correct term should be used to qualify what Amazon is instead of trying to redefine the word in order to be able to label Amazon with it.

nicoburns 7y ago
Indeed. And what is weirder is that there seems to be an attitude that if it's not a monopoly then it must be fine and should be allowed.
nabla9 7y ago
Monopoly is used as a generic term to discuss everything under antitrust and competition law with layman, because people don't know what monopoly power, market power, barriers to entry or exit, restraint of trade, price discrimination, market failures etc. mean. Everyone knows what pure monopoly is. This creates problems if people take it too literally.
- dahfizz 7y ago
  Yeah, that's the whole problem. "Monopoly" has become a generic and unspecific term, but it's still very politically significant. So laypeople cry for X company to be regulated "because they're a monopoly" without having to have any sort of actual objective backing. The point OP is making, and you seem to agree with him, is that we shouldn't overload the terms. "Monopoly" is a very specific enconomic term, a political term, and a subjective layterm used to portray large companies negatively. Bundling all those meanings together creates miscommunications.
  - nabla9 7y ago
    My point is that just because word "monopoly" is used as a shorthand for more accurate term "monopoly power" it don't make calls for regulation any less important.
- deleted 7y ago

Iv 7y ago

I don't think that's the definition of a monopoly that is problematic here, more the definition of a market, which is a more abstract group, composed of competitors and that companies are supposed to be able to enter somehow easily. The debate there is whether online shops and physical shops are in the same market, and what geographical divisions make sense for online shops. It is also in the definition of tech markets, which are starting to clear up. We know for instance that it is not necessarily easy for a tech giant in ads/search (Google) to enter the social media arena, so these two things are separate. Hosting and cloud computing seem to be very similar markets, most players there having offers in both. I think the market of online banking is being defined right now with many unconventional players showing that ecommerce may actually belong to the same market as paypal. Defining monopolies is much easier, if you start from the (rather political) use of the concept : deciding when a company has to be broken up to preserve competition. MArkets are just a tool to create definitions of monopolies. That debate is too often obscured by various ideologies on the wisdom of the crowds and invisible hands imbued with various mystical properties.

jdkee 7y ago

When one person is worth 100,000,000,000 plus and thousands of delivery drivers have to pee in bottles while making slightly above minimum wage is the time when the guillotines need to come out.

echelon 7y ago
> When one person is worth 100,000,000,000 plus On paper. If Bezos were to liquidate everything he'd have lots of trouble getting that amount. Maybe a slow divestment, though people would also question that move... > [...] and thousands of delivery drivers have to pee in bottles while making slightly above minimum wage One solution is certainly legislative. I'm not so sure that will fix the problem though as prices and inflation will increase due to more money flooding the system. Better access to high-quality education is something we should be providing. But that typically only helps the youngest. I don't know what the appropriate fix is. > [...] is the time when the guillotines need to come out. Violence isn't the answer. Have all other avenues even been exhausted -- why is violence the one to jump to? Are you willing to go to jail or be executed for killing Bezos? I don't think so. At the end of the day, people still aren't uncomfortable enough to want blood. This is just armchair anger. There are better, more productive ways. If the situation were truly to deteriorate to the point where people were dying of starvation, then maybe we'll see violence. I don't think we're anywhere close to that.
- dzhiurgis 7y ago
  > On paper. But isn't that everyone who's a least a little rich or has common sense in finance? I was trying to find a list of billionaires by cash in bank, but truth is no one really keeps cash - because it's stupid. That said I am not against being wealthy at all. Distributing Amazon's shares away to random public would just destroy company.

jellicle 7y ago

I often find people first assume something that isn't in US anti-trust law - that one must have a "monopoly" in order to be problematic - and then use a narrow definition of monopoly to conclude that no legal problem exists. US law talks a lot about "market power", not monopoly. And... > economy dominated by big tech we both seem to think it is clear that there is market power.