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That was my reaction as well. Also, a lot of the most interesting corporate research these days is done by quasi-monopolies like Facebook and Google.
by mrosett 6y ago
That was my reaction as well. Also, a lot of the most interesting corporate research these days is done by quasi-monopolies like Facebook and Google.
- chillacy 6y agoI believe Peter Thiel made a similar point when he said that monopolies (or at least, profit margins beyond sustenance) give companies breathing space to fund these types of things.
- Reimersholme 6y ago“Monopolists can afford to think about things other than making money; non-monopolists can’t. In perfect competition, a business is so focused on today’s margins that it can’t possibly plan for a long-term future. Only one thing can allow a business to transcend the daily brute struggle for survival: monopoly profits.”
- kkylin 6y agoAnd I've wondered if the blurring of the line between research and product development at the likes of Google and Facebook (MS Research seems to still be an exception) is because they feel they have less breathing space?
- usrusr 6y agoBreathing space can also be taken up by stock market expectations. Did that old guard of research lab owners ever reach a similar level of valuation? My spontaneous guess explanation is that back then, stock markets were far more reluctant to price in immaterial advantages like market dominance or tech leadership if it wasn't backed by tangible assets like mining rights or factories.
- mkoubaa 6y agoalso they have to signal some value to society to hedge against future breakup threats
- eru 6y agoPeter Thiel's ideas about monopolies are ill-conceived. In a competitive industry the life of corporations might be brutish, nasty and short. Yes. But the life of workers and customers can be quite nice---since companies are competing for them, too.
- chillacy 6y agoWhat are some examples of competitive industries with top-of-band comp? Based on what I've seen, when the going gets tough, companies would rather squeeze their workers than their investors (airline companies and pilots), since compensation falls within a range.
- eru 6y agoInvestors are squeezed all the time. Just look at how much stock prices drop whenever there's some bad news. What do you mean by top-of-band comp? In a competitive industry workers are paid according to their marginal productivity. https://www.idiosyncraticwhisk.com/2019/10/california-wants-more-monopsony-in.html https://www.idiosyncraticwhisk.com/2019/10/california-wants-... has some background to what I was talking about. Do keep in mind that industries can be (un-) competitive in different ways. Eg there's a good argument to be made that banks don't compete in competitive markets for many of their products, but they sure compete for labour.