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The hypocrisy in YC isn't this. It's that people argue the virtues of "free-markets" while simultaneously arguing the most valuable thing any business should b

The hypocrisy in YC isn't this. It's that people argue the virtues of "free-markets" while simultaneously arguing the most valuable thing any business should build is a "moat". It the utter acknowledgment that avoiding/prevent competition is the way to be successful, while arguing that free markets enforce competition. Its blatantly obvious that network effects, exclusivity contracts and monopolies exist. And well and market dominance leads to more dominance by purchasing any future competitive business. And yet claim most success comes from marker efficiency. Taking a non-tech example. Madden is getting closer to a 20 year exclusive license NFL on consoles. No game can compete with made up teams and rosters. The product is stagnant, innovation a dump and yet this continuous aspect of "free-market" is ignored.

KoftaBob 6y ago
I think you’re conflating a “free market” with a “perfectly competitive market”. By and large, the US is a free market with your obvious government regulations. However, it’s not a perfectly competitive market because of the things you mentioned. Because a true “perfectly competitive market” is almost impossible to achieve, no nation’s economy is, but some are closer to it than others. Perfect competition benefits the consumers most, while network effects, exclusivity contracts, and monopolies obviously benefit the companies more. One of the biggest goals of US government economic regulations (at least ideally) is to steer the market as close to a perfectly competitive market as possible. Companies optimize in the other direction, and try to make their market less competitive despite those regulations. This dynamic doesn’t mean it’s not a free market, it just means that we need regulations to counteract the forces of companies and keep it competitive. This is why I find it misguided when people want a totally libertarian system with no regulations, because that will inevitably lead to a less competitive/efficient market.
- BoiledCabbage 6y ago
  100% agreed. I"m using however somehow I feel most of HN doesn't see this. The issue is between how the term "free market" is defined and how it's used. My usage above is how it's commonly used - as meaning a "competitive market" - which as you mention is completely wrong. A truly competitive market benefits consumers and society overall. A completely free market on the other hand benefits rent seeking and is a drain on society. Free markets naturally tend towards anti-competetive rent-seeking behaviors. The best thing you can do for a market economy is to ensure it stays a competitive market. There will always be inefficiencies in markets which will accrue towards companies - but the amount of excess rent-seeking that flows to companies needs to be actively minimized.
  - KoftaBob 6y ago
    well said

KoftaBob 6y ago

I think you’re conflating a “free market” with a “perfectly competitive market”. By and large, the US is a free market with your obvious government regulations. However, it’s not a perfectly competitive market because of the things you mentioned. Because a true “perfectly competitive market” is almost impossible to achieve, no nation’s economy is, but some are closer to it than others. Perfect competition benefits the consumers most, while network effects, exclusivity contracts, and monopolies obviously benefit the companies more. One of the biggest goals of US government economic regulations (at least ideally) is to steer the market as close to a perfectly competitive market as possible. Companies optimize in the other direction, and try to make their market less competitive despite those regulations. This dynamic doesn’t mean it’s not a free market, it just means that we need regulations to counteract the forces of companies and keep it competitive. This is why I find it misguided when people want a totally libertarian system with no regulations, because that will inevitably lead to a less competitive/efficient market.

BoiledCabbage 6y ago
100% agreed. I"m using however somehow I feel most of HN doesn't see this. The issue is between how the term "free market" is defined and how it's used. My usage above is how it's commonly used - as meaning a "competitive market" - which as you mention is completely wrong. A truly competitive market benefits consumers and society overall. A completely free market on the other hand benefits rent seeking and is a drain on society. Free markets naturally tend towards anti-competetive rent-seeking behaviors. The best thing you can do for a market economy is to ensure it stays a competitive market. There will always be inefficiencies in markets which will accrue towards companies - but the amount of excess rent-seeking that flows to companies needs to be actively minimized.
- KoftaBob 6y ago
  well said