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Outlawing monopolies and breaking them up if they do occur, which you mentioned in your previous comment, is a form regulation though. Enforcing those rules has

Outlawing monopolies and breaking them up if they do occur, which you mentioned in your previous comment, is a form regulation though. Enforcing those rules hasn't been perfect, but I'd say having them around has been a net positive for the market.

jjk166 6y ago
It is a regulation, but not a prescriptive one. Separating instagram from facebook doesn't, on its own, limit what either site can do, but it limits how much power is concentrated in a single executive board. More importantly, monopolies are incentivized to stay in the public's good graces to avoid being broken up if the threat has teeth. Consider AT&T in the mid 20th century: for fear of getting broken up they generated tons of research at bell labs and allowed others to pursue every technology that wasn't narrowly related to providing telephone service. This arrangement produced a slew of inventions such as the solid state transistor. This came to a halt when AT&T was broken up. Since anti-trust laws were gutted in the 80s and 90s, the telecom monopolies have reformed, but this "keep the people happy so they don't break us up" mentality has not returned with it because there's no serious chance that they will be. Such regulation, and the threat of regulation, does not promote competition, rather it mitigates the negative effects of the lack of competition. And frankly this whole thing is something of a sideshow. Yes Facebook and Google and these tech giants are monopolies, but if any of them actually go off the deepend its not too hard to switch to an alternative, and the services they provide are hardly life or death, and they don't even stifle innovation much. Indeed many of them have taken the AT&T route and started labs which produce useful opensource developments. If you look at pharmaceuticals, banking, insurance, retail, air-travel, telecommunications, and so forth you'll find gross anti-competitive behavior which holds society back and can cause terrible problems for people. I would argue that most of these issues are a direct result of regulatory capture, but even if you do believe regulation to do more good than harm it should be focused here first. It would be farcical if facebook were to be prescribed how they format their friend data while a pharmaceutical giant gets carte blanche to charge whatever they want for a coronavirus vaccine.

jjk166 6y ago

It is a regulation, but not a prescriptive one. Separating instagram from facebook doesn't, on its own, limit what either site can do, but it limits how much power is concentrated in a single executive board. More importantly, monopolies are incentivized to stay in the public's good graces to avoid being broken up if the threat has teeth. Consider AT&T in the mid 20th century: for fear of getting broken up they generated tons of research at bell labs and allowed others to pursue every technology that wasn't narrowly related to providing telephone service. This arrangement produced a slew of inventions such as the solid state transistor. This came to a halt when AT&T was broken up. Since anti-trust laws were gutted in the 80s and 90s, the telecom monopolies have reformed, but this "keep the people happy so they don't break us up" mentality has not returned with it because there's no serious chance that they will be. Such regulation, and the threat of regulation, does not promote competition, rather it mitigates the negative effects of the lack of competition. And frankly this whole thing is something of a sideshow. Yes Facebook and Google and these tech giants are monopolies, but if any of them actually go off the deepend its not too hard to switch to an alternative, and the services they provide are hardly life or death, and they don't even stifle innovation much. Indeed many of them have taken the AT&T route and started labs which produce useful opensource developments. If you look at pharmaceuticals, banking, insurance, retail, air-travel, telecommunications, and so forth you'll find gross anti-competitive behavior which holds society back and can cause terrible problems for people. I would argue that most of these issues are a direct result of regulatory capture, but even if you do believe regulation to do more good than harm it should be focused here first. It would be farcical if facebook were to be prescribed how they format their friend data while a pharmaceutical giant gets carte blanche to charge whatever they want for a coronavirus vaccine.