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"But what I think a lot of this misses is that the more a financial system is prone to cash extraction, the less good it becomes at value generation. As an exam

"But what I think a lot of this misses is that the more a financial system is prone to cash extraction, the less good it becomes at value generation. As an example, we can look in software at the era of Microsoft's dominance. Microsoft was a great cash generator, but its dominance (and misuse of its market power) discouraged a lot of startups). Then antitrust enforcement and the rise of the browser unleashed a whole wave of innovation. " Pretty much all big companies are good at making cash while killing innovation. Compared to their size the innovation output of the big tech companies is pretty low. Since 2008 it has become clear that the financial sector is viewed as an industry that needs to be protected no matter what the cost so you should expect them to keep doing crooked stuff while making boatloads of money. This comes at the expense of other sectors in the economy.

wpietri 6y ago
I agree totally, but want to draw one distinction. I think big companies are fine in big, competitive markets. They're generally terrible at innovation, of course (although not always; 3M is a counterexample, as is Apple). But as long as there is room for upstarts to make a good living, that doesn't worry me.
- Ididntdothis 6y ago
  I still would argue that compare to its size Apple’s innovation is lacking. They did a lot between 2000 and maybe 2010 but now they are just iterating on the same things with only a few innovative things sprinkled in. Like all big companies their main strength is efficient execution and optimization of systems.
  - wpietri 6y ago
    Yeah, they're definitely lacking in innovative products lately. But they're still spending a fair bit on incremental innovation. The iPhone is still the phone to beat in terms of camera quality, and they're making other improvements like whatever their face-radar thing is. This means that the other phone players have to keep innovating too, and can't just settle down and hoover up cash, so I'm ok with it.

wpietri 6y ago

I agree totally, but want to draw one distinction. I think big companies are fine in big, competitive markets. They're generally terrible at innovation, of course (although not always; 3M is a counterexample, as is Apple). But as long as there is room for upstarts to make a good living, that doesn't worry me.

Ididntdothis 6y ago
I still would argue that compare to its size Apple’s innovation is lacking. They did a lot between 2000 and maybe 2010 but now they are just iterating on the same things with only a few innovative things sprinkled in. Like all big companies their main strength is efficient execution and optimization of systems.
- wpietri 6y ago
  Yeah, they're definitely lacking in innovative products lately. But they're still spending a fair bit on incremental innovation. The iPhone is still the phone to beat in terms of camera quality, and they're making other improvements like whatever their face-radar thing is. This means that the other phone players have to keep innovating too, and can't just settle down and hoover up cash, so I'm ok with it.