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Why should consumers subsidize R&D by a company with no accountability to them what so ever? US is the leader in many tech areas due to free market competition

Why should consumers subsidize R&D by a company with no accountability to them what so ever? US is the leader in many tech areas due to free market competition as well as defense spending, not Google's R&D. Google is also happy to sell their R&D to China, but then somehow finds it uncomfortable to transact with the DoD. Hard to make case Google is a net positive for the US with a straight face.

actuator 6y ago
They shouldn't, the accountability should come with regulation ensuring fair competition and respect for user data, not just going ahead and reducing competitiveness of US companies by breaking them up. I will be really surprised if Google sold their R&D to China, as it makes no sense whatsoever, but my comment was in general about all US big tech companies.
- MiroF 6y ago
  > the accountability should come with regulation ensuring fair competition and respect for user data Yes, so what we're saying is there's clear evidence that they have failed at adhering to those regulation, so should be broken up. > not just going ahead and reducing competitiveness of US companies by breaking them up. Siri, define competition.
  - actuator 6y ago
    > there's clear evidence that they have failed at adhering to those regulation, so should be broken up. If there is clear evidence of them breaking existing regulation, then I am all for taking action. If the existing regulations are insufficient, I am all for introducing new ones as in the case of App Store debate. > Siri, define competition. I meant competitiveness in terms of R&D by cutting their cash flows.
    - MiroF 6y ago
      > If there is clear evidence of them breaking existing regulation, then I am all for taking action. Cool, so that is why they are taking Alphabet to court, because of alleged anti-trust violations. If the court determines there is clear evidence of them breaking existing regulation, then Alphabet might be broken up. Glad we agree that we ought to enforce our anti-trust laws.
    - andrewjl 6y ago
      Except in the case of a both legislation and enforcement, they spend tens of millions of dollars seeking to avoid it. Often successfully. The former is via lobbying and the latter is the good old "revolving door policy." Ex. Nick Clegg [FB], Jay Carney [Amazon]
- andrewjl 6y ago
  > They shouldn't, the accountability should come with regulation ensuring fair competition and respect for user data, not just going ahead and reducing competitiveness of US companies by breaking them up. Nothing about Google even approaches fair competition. It's impossible due to network effects. "Respect for user data" sounds great in theory, but ends up being a cudgel to reduce the ability of a startup to compete while shouldering high compliance costs. > I will be really surprised if Google sold their R&D to China, as it makes no sense whatsoever, but my comment was in general about all US big tech companies. They don't get a say in the matter, because they have an R&D facility within China's jurisdiction. China's national security laws compel full cooperation in security and intelligence matters, I'll add that what counts as "security" and "intelligence" has a very expansive legal definition as compared to for example in the US. This law has no process of appeal nor any sort of judicial review.
wonnage 6y ago
Apparently for Americans helping China surveil their population is insufficiently patriotic, they must help their own DoD and NSA as well
- andrewjl 6y ago
  It's hard to read this as anything but some form of what-aboutism. However, I'll bite, whatever you think of NSA and DoD, because of FISA, congressional oversight, and generally centuries of respect for rule of law, you can't compare them to PRCs surveillance apparatus.
  - Nasrudith 6y ago
    It is a shitty comparison game to get into in the first place with insane agendas. Akin yo complaining "Why does the gun shop owner sell to the one guy who shot his wife but not my abusive husband? That is totally unfair!".
    - andrewjl 6y ago
      The fact is, Google is a US company and they benefit from the security provided by those agencies. Your analogy, colorful as it may be, belies reality.
      - Nasrudith 6y ago
        Security theater really - what does their snooping give other than the ability to say "We technically knew about it! It was right here in the pile!" afterwards? Its true purposes are self serving and to be a rhetorical justification escape hatch of National Security to ensure impunity. Bad actions are bad regardless of the flag they drape themselves in or any fallacious affinity that assumes what is liked by an actor on behalf of us is good for us. Should we be grateful that a "lobbyist" "donated" a big pile of cocaine to our senators?
        andrewjl 6y ago
bleepblorp 6y ago
The US is the economic leader in tech because network effects in tech strongly favors monopolies, and the US does not do antitrust enforcement anymore. The US tech sector makes money hand over fist not because of its technology but because the various tech firms have been allowed to monopolize their respective market areas. See e.g.: https://www.hup.harvard.edu/catalog.php?isbn=9780674237544 https://www.hup.harvard.edu/catalog.php?isbn=9780674237544 https://johnquiggin.com/2020/08/03/intangibles-monopoly/ https://johnquiggin.com/2020/08/03/intangibles-monopoly/
- andrewjl 6y ago
  You are absolutely correct in that antitrust enforcement in the US is broken. I think it's also clear that most big tech is monopolistic in nature. However that's not the cause of its leadership, if anything it's an obstacle. Most money earned by big tech is spent on share buybacks, and not R&D. Meanwhile many potential market entrants fail, and their often superior tech never sees the light of day. It's true that monopolies can do loss making R&D for a while, but the benefits tend to be front loaded. Eventually a form of organizational sclerosis sets in, and the supposedly beneficial R&D output disappears. See The Gervais Principle for a deeper look at this. It would be a tremendous boost to US competitiveness if these monopolies went away. However it would make a certain cross-section of society actually work for a living, so of course they will do all they can to prevent such a conversation from happening in the public sphere. Edit: The book you linked to discusses regulatory capture, a very subtle way that companies exercise monopolistic power, often under the guise of "safety", etc. I referenced that tactic elsewhere in the thread re privacy and user data laws. The correct solution to this, counter-intuitively, is to reduce regulation. And make operating a larger company more expensive, while doing the opposite for small businesses.
  - bleepblorp 6y ago
    I'm not convinced that reducing regulations is the way to get rid of monopolies. The first major experience with monopolies in America was before the great depression, when regulations on most businesses were virtually non-existent. Economic history is fairly clear that unregulated markets consolidate into monopolies without regulations to ensure ongoing competition. While there are certain cases where regulatory capture has created regulations that enforce monopolies, this isn't the case for the entire tech sector in general. Regulatory monopolies protect telephone, cable, and Internet providers. In some areas it is simply illegal to construct competing communications infrastructure. Under Trump, the national security process is also now being used to protect market incumbents; the TikTok confiscation--that Zuk----rg lobbied for--coming just as Facebook is planning to roll out a TikTok competitor likely isn't a coincidence. Removing these regulations would help competition in these areas, and should be done. However, outside of these cases, the tech sector in general exists to make a legal revenue stream from loopholes and lack of enforcement in the regulatory regime. Platforms like Uber are only viable businesses because they've been allowed to circumvent both minimum wage laws and regulations surrounding the taxi industry. AirBnB is, fundamentally, an unlicensed franchise hotel operator, and is only viable as long as regulators refuse to require it to abide by the same rules as the rest of the hotel industry. Much of the contemporary video gaming sector is based on evading regulations on gambling. Finally, adtech firms, like Facebook and Google, are only viable because the US has no consumer privacy laws. Taking away what little enforced regulations cover these firms would not benefit consumers or market competition. Quite frankly, so much of the tech sector was built on the monetization of socially destructive behavior, legal-but-predatory business practices, "regulatory arbitrage", and outright illegality, that large parts of it should be outlawed entirely.
Nasrudith 6y ago
If they are subsidizing it through consumer choices they do have accountability. A good test of this is a thought experiment of "leadership replaced by an edgelord troll with impunity". If they could sink the company by say replacing the homepage with shock site images randomly they have at least some accountability.
- andrewjl 6y ago
  > If they are subsidizing it through consumer choices they do have accountability. This cannot happen if the company is a monopoly, by definition. > A good test of this is a thought experiment of "leadership replaced by an edgelord troll with impunity". Given Google's systemic importance in the media ecosystem the result would be apocalyptic. Maybe not for Google, but certainly for everyone else.
  - Nasrudith 6y ago
    The point is essentially one of dependency and voluntaryness. An actual government collecting taxes or essential to life with no viable alternatives isn't an actual choice anymore than "your money or your life is". Even if the optimal outcome rests on choosing them that is still a choice. The point of the edgelord thought experiment is if they can exploit it without choking the goose who lays the golden eggs and losing it anyway. Competition is one means of it just like regulated monopolies for utilities. If people stop using Google in the apocalypse how can it not be apocalyptic for them? We have seen plenty of "invulnerable incumbents" fall once they are so stupid they lose the net advantage of scale and a good name.
    - andrewjl 6y ago
      > The point is essentially one of dependency and voluntaryness. False dichotomy. Gradations exist. Particularly in the ad business that is, in effect, a two-way market for intentional attention online. > An actual government collecting taxes or essential to life with no viable alternatives isn't an actual choice anymore than "your money or your life is". Even if the optimal outcome rests on choosing them that is still a choice. This is over-simplified. Consumers have no way to choose whether businesses buy Google ads, that choice is necessitated by market dynamics. So the only agency a consumer has is to stop using Google. Good luck with that. I suppose moving completely off-grid is possible, but a market that forces these types of choices is neither legitimate nor defensible, therefore it will eventually get dismantled one way or another. > If people stop using Google in the apocalypse how can it not be apocalyptic for them? You seem to be conflating the situation of a non-monopolist with a monopolist here. By definition a monopolist's services will continue to be used. > We have seen plenty of "invulnerable incumbents" fall once they are so stupid they lose the net advantage of scale and a good name. I strongly agree that this is the best outcome. I'd like it to happen sooner, and if antitrust intervention allows that, so much the better! Antitrust is inherently always pro-business, in the larger sense of the word.

actuator 6y ago

They shouldn't, the accountability should come with regulation ensuring fair competition and respect for user data, not just going ahead and reducing competitiveness of US companies by breaking them up. I will be really surprised if Google sold their R&D to China, as it makes no sense whatsoever, but my comment was in general about all US big tech companies.

MiroF 6y ago
> the accountability should come with regulation ensuring fair competition and respect for user data Yes, so what we're saying is there's clear evidence that they have failed at adhering to those regulation, so should be broken up. > not just going ahead and reducing competitiveness of US companies by breaking them up. Siri, define competition.
- actuator 6y ago
  > there's clear evidence that they have failed at adhering to those regulation, so should be broken up. If there is clear evidence of them breaking existing regulation, then I am all for taking action. If the existing regulations are insufficient, I am all for introducing new ones as in the case of App Store debate. > Siri, define competition. I meant competitiveness in terms of R&D by cutting their cash flows.
  - MiroF 6y ago
    > If there is clear evidence of them breaking existing regulation, then I am all for taking action. Cool, so that is why they are taking Alphabet to court, because of alleged anti-trust violations. If the court determines there is clear evidence of them breaking existing regulation, then Alphabet might be broken up. Glad we agree that we ought to enforce our anti-trust laws.
  - andrewjl 6y ago
    Except in the case of a both legislation and enforcement, they spend tens of millions of dollars seeking to avoid it. Often successfully. The former is via lobbying and the latter is the good old "revolving door policy." Ex. Nick Clegg [FB], Jay Carney [Amazon]
andrewjl 6y ago
> They shouldn't, the accountability should come with regulation ensuring fair competition and respect for user data, not just going ahead and reducing competitiveness of US companies by breaking them up. Nothing about Google even approaches fair competition. It's impossible due to network effects. "Respect for user data" sounds great in theory, but ends up being a cudgel to reduce the ability of a startup to compete while shouldering high compliance costs. > I will be really surprised if Google sold their R&D to China, as it makes no sense whatsoever, but my comment was in general about all US big tech companies. They don't get a say in the matter, because they have an R&D facility within China's jurisdiction. China's national security laws compel full cooperation in security and intelligence matters, I'll add that what counts as "security" and "intelligence" has a very expansive legal definition as compared to for example in the US. This law has no process of appeal nor any sort of judicial review.

wonnage 6y ago

Apparently for Americans helping China surveil their population is insufficiently patriotic, they must help their own DoD and NSA as well

andrewjl 6y ago
It's hard to read this as anything but some form of what-aboutism. However, I'll bite, whatever you think of NSA and DoD, because of FISA, congressional oversight, and generally centuries of respect for rule of law, you can't compare them to PRCs surveillance apparatus.
- Nasrudith 6y ago
  It is a shitty comparison game to get into in the first place with insane agendas. Akin yo complaining "Why does the gun shop owner sell to the one guy who shot his wife but not my abusive husband? That is totally unfair!".
  - andrewjl 6y ago
    The fact is, Google is a US company and they benefit from the security provided by those agencies. Your analogy, colorful as it may be, belies reality.
    - Nasrudith 6y ago
      Security theater really - what does their snooping give other than the ability to say "We technically knew about it! It was right here in the pile!" afterwards? Its true purposes are self serving and to be a rhetorical justification escape hatch of National Security to ensure impunity. Bad actions are bad regardless of the flag they drape themselves in or any fallacious affinity that assumes what is liked by an actor on behalf of us is good for us. Should we be grateful that a "lobbyist" "donated" a big pile of cocaine to our senators?
      - andrewjl 6y ago

bleepblorp 6y ago

The US is the economic leader in tech because network effects in tech strongly favors monopolies, and the US does not do antitrust enforcement anymore. The US tech sector makes money hand over fist not because of its technology but because the various tech firms have been allowed to monopolize their respective market areas. See e.g.: https://www.hup.harvard.edu/catalog.php?isbn=9780674237544 https://www.hup.harvard.edu/catalog.php?isbn=9780674237544 https://johnquiggin.com/2020/08/03/intangibles-monopoly/ https://johnquiggin.com/2020/08/03/intangibles-monopoly/

andrewjl 6y ago
You are absolutely correct in that antitrust enforcement in the US is broken. I think it's also clear that most big tech is monopolistic in nature. However that's not the cause of its leadership, if anything it's an obstacle. Most money earned by big tech is spent on share buybacks, and not R&D. Meanwhile many potential market entrants fail, and their often superior tech never sees the light of day. It's true that monopolies can do loss making R&D for a while, but the benefits tend to be front loaded. Eventually a form of organizational sclerosis sets in, and the supposedly beneficial R&D output disappears. See The Gervais Principle for a deeper look at this. It would be a tremendous boost to US competitiveness if these monopolies went away. However it would make a certain cross-section of society actually work for a living, so of course they will do all they can to prevent such a conversation from happening in the public sphere. Edit: The book you linked to discusses regulatory capture, a very subtle way that companies exercise monopolistic power, often under the guise of "safety", etc. I referenced that tactic elsewhere in the thread re privacy and user data laws. The correct solution to this, counter-intuitively, is to reduce regulation. And make operating a larger company more expensive, while doing the opposite for small businesses.
- bleepblorp 6y ago
  I'm not convinced that reducing regulations is the way to get rid of monopolies. The first major experience with monopolies in America was before the great depression, when regulations on most businesses were virtually non-existent. Economic history is fairly clear that unregulated markets consolidate into monopolies without regulations to ensure ongoing competition. While there are certain cases where regulatory capture has created regulations that enforce monopolies, this isn't the case for the entire tech sector in general. Regulatory monopolies protect telephone, cable, and Internet providers. In some areas it is simply illegal to construct competing communications infrastructure. Under Trump, the national security process is also now being used to protect market incumbents; the TikTok confiscation--that Zuk----rg lobbied for--coming just as Facebook is planning to roll out a TikTok competitor likely isn't a coincidence. Removing these regulations would help competition in these areas, and should be done. However, outside of these cases, the tech sector in general exists to make a legal revenue stream from loopholes and lack of enforcement in the regulatory regime. Platforms like Uber are only viable businesses because they've been allowed to circumvent both minimum wage laws and regulations surrounding the taxi industry. AirBnB is, fundamentally, an unlicensed franchise hotel operator, and is only viable as long as regulators refuse to require it to abide by the same rules as the rest of the hotel industry. Much of the contemporary video gaming sector is based on evading regulations on gambling. Finally, adtech firms, like Facebook and Google, are only viable because the US has no consumer privacy laws. Taking away what little enforced regulations cover these firms would not benefit consumers or market competition. Quite frankly, so much of the tech sector was built on the monetization of socially destructive behavior, legal-but-predatory business practices, "regulatory arbitrage", and outright illegality, that large parts of it should be outlawed entirely.

Nasrudith 6y ago

If they are subsidizing it through consumer choices they do have accountability. A good test of this is a thought experiment of "leadership replaced by an edgelord troll with impunity". If they could sink the company by say replacing the homepage with shock site images randomly they have at least some accountability.

andrewjl 6y ago
> If they are subsidizing it through consumer choices they do have accountability. This cannot happen if the company is a monopoly, by definition. > A good test of this is a thought experiment of "leadership replaced by an edgelord troll with impunity". Given Google's systemic importance in the media ecosystem the result would be apocalyptic. Maybe not for Google, but certainly for everyone else.
- Nasrudith 6y ago
  The point is essentially one of dependency and voluntaryness. An actual government collecting taxes or essential to life with no viable alternatives isn't an actual choice anymore than "your money or your life is". Even if the optimal outcome rests on choosing them that is still a choice. The point of the edgelord thought experiment is if they can exploit it without choking the goose who lays the golden eggs and losing it anyway. Competition is one means of it just like regulated monopolies for utilities. If people stop using Google in the apocalypse how can it not be apocalyptic for them? We have seen plenty of "invulnerable incumbents" fall once they are so stupid they lose the net advantage of scale and a good name.
  - andrewjl 6y ago
    > The point is essentially one of dependency and voluntaryness. False dichotomy. Gradations exist. Particularly in the ad business that is, in effect, a two-way market for intentional attention online. > An actual government collecting taxes or essential to life with no viable alternatives isn't an actual choice anymore than "your money or your life is". Even if the optimal outcome rests on choosing them that is still a choice. This is over-simplified. Consumers have no way to choose whether businesses buy Google ads, that choice is necessitated by market dynamics. So the only agency a consumer has is to stop using Google. Good luck with that. I suppose moving completely off-grid is possible, but a market that forces these types of choices is neither legitimate nor defensible, therefore it will eventually get dismantled one way or another. > If people stop using Google in the apocalypse how can it not be apocalyptic for them? You seem to be conflating the situation of a non-monopolist with a monopolist here. By definition a monopolist's services will continue to be used. > We have seen plenty of "invulnerable incumbents" fall once they are so stupid they lose the net advantage of scale and a good name. I strongly agree that this is the best outcome. I'd like it to happen sooner, and if antitrust intervention allows that, so much the better! Antitrust is inherently always pro-business, in the larger sense of the word.