5 ms·

Not really... I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory. IRL, the business mode

by netcan 6y ago

Not really... I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory. IRL, the business models of most major tech companies are pretty impervious to most inefficiency. Most of their leadership is beyond the reach of shareholder discipline too. Monopoly makes a good moat. Banks aren't accountable for their own losses. How many more examples do we need? Large company bankruptcies are a rarity, and when they do happen (eg american airlines) the resulting mess just enforces the bailouts mentality. Dealing with them is an exercise in kafkaesque patience and it is impossible to work out where their mindless bureaucracy starts and regulation begins. In 2020, an anti-bureaucracy worldview that sees the dividing line as public/private is foolishly anachronistic. Sure "some" mechanism exists for them to go out of business. That's about as useful as the ballot for creating efficiency.

bhupy 6y ago
> I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory. It's not just replacing inefficient leaders that's an important mechanism for "efficiency", it's also restructuring organizations. Democracy, at best, just means that you have different leaders, but the mostly the same set of bureaucrats operating the same programs. Private enterprises, on the other hand, allow us to whole-sale replace entire purveyors of goods & services with entirely different structures of organization in a manner that's difficult to reproduce for a monolithic public monopoly. Imagine what retail would have been like if, instead of Sears being essentially replaced, we just elected a different set of leaders to run the same organization. > IRL, the business models of most major tech companies are pretty impervious to most inefficiency. When a business is unable to collect enough money to continue operating, it goes out of business. Almost no major tech company has been able to continue operating without either sustaining themselves, or collecting investment. > Most of their leadership is beyond the reach of shareholder discipline too. Monopoly makes a good moat. Sure, and monopolies are bad for the same reason. But most industries aren't run by monopolies. You only hear about the ones that are, because they're so noteworthy. > Sure "some" mechanism exists for them to go out of business. That's about as useful as the ballot for creating efficiency. I don't think that's true at all. You can count on one hand the government programs that have gone defunct in the last 60 years. The number of private enterprises that have gone bankrupt, defunct, or M&A’d out of existence over the same timespan is almost countless. You're 100% right about the banks and bailouts, though. That's not a private enterprise problem, though — that's a "our government is doing a stupid thing" problem.
- netcan 6y ago
  >>most industries aren't run by monopolies Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these? Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy, but good. Pretty unbureaucratic and efficient. Well functioning markets are great when you have them, they just aren't most of the economy. Some industries (eg FMCGs, shipping) are concentrated, but a degree of market discipline still operates. Not like hairdressing, but there is at least price competition within a limited frame. Some private industries are just impossible to pick apart from government: Health and pharmaceuticals, all government contracting, real estate, etc. Most market mechanisms don't apply here either. They certainly don't apply in "systemic" situations. It is a fact that a lot (arguably most) of the economy is very far from the market ideal that restaurants operate within. It's not totally black and white, but thinking of these issues in a 1970s frame is silly. That doesn't mean private and public are identical, but a Smithian pin factory is as bad a model for most of the economy as a local fire department.
  - bhupy 6y ago
    > Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these? Mineral exploration: https://www.manta.com/mb_35_E31F37VC_000/mineral_exploration https://www.manta.com/mb_35_E31F37VC_000/mineral_exploration Refining: https://www.mckinseyenergyinsights.com/resources/refinery-reference-desk/refining-companies/ https://www.mckinseyenergyinsights.com/resources/refinery-re... Technology: https://medium.com/@progressivepolicyinstitute/10-things-you-need-to-know-about-tech-and-antitrust-6c077bf71dc5 https://medium.com/@progressivepolicyinstitute/10-things-you... Military industry: https://en.wikipedia.org/wiki/List_of_defense_contractors https://en.wikipedia.org/wiki/List_of_defense_contractors Finance & Banking: https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... Online retail: https://www.ben-evans.com/benedictevans/2019/12/amazons-market-share19 https://www.ben-evans.com/benedictevans/2019/12/amazons-mark... None of these are monopolies. These are all concentrated, but not monopolized. To your later point, market discipline still functions in concentrated industries. > Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy. The vast majority of industries are either operated by many small players, or a few large players (concentration). Actual monopolies are extraordinarily rare. > Health and pharmaceuticals, all government contracting, Real Estate, etc. No market mechanism here either This is also untrue. Health & pharmaceuticals: Same story. concentration? Perhaps. Monopoly? Not by a long shot. You have major players like Johnson & Johnson, Pfizer, Merck, GSK, Amgen BV, Abbott, McKesson, etc etc. Ditto real estate: https://www.propertymanagerinsider.com/the-biggest-u-s-based-real-estate-companies/ https://www.propertymanagerinsider.com/the-biggest-u-s-based... The private sector isn't a silver bullet, and there's always a place for democracy and governments. But we have to be real about what works where, and what doesn't.

by netcan 6y ago

bhupy 6y ago

> I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory. It's not just replacing inefficient leaders that's an important mechanism for "efficiency", it's also restructuring organizations. Democracy, at best, just means that you have different leaders, but the mostly the same set of bureaucrats operating the same programs. Private enterprises, on the other hand, allow us to whole-sale replace entire purveyors of goods & services with entirely different structures of organization in a manner that's difficult to reproduce for a monolithic public monopoly. Imagine what retail would have been like if, instead of Sears being essentially replaced, we just elected a different set of leaders to run the same organization. > IRL, the business models of most major tech companies are pretty impervious to most inefficiency. When a business is unable to collect enough money to continue operating, it goes out of business. Almost no major tech company has been able to continue operating without either sustaining themselves, or collecting investment. > Most of their leadership is beyond the reach of shareholder discipline too. Monopoly makes a good moat. Sure, and monopolies are bad for the same reason. But most industries aren't run by monopolies. You only hear about the ones that are, because they're so noteworthy. > Sure "some" mechanism exists for them to go out of business. That's about as useful as the ballot for creating efficiency. I don't think that's true at all. You can count on one hand the government programs that have gone defunct in the last 60 years. The number of private enterprises that have gone bankrupt, defunct, or M&A’d out of existence over the same timespan is almost countless. You're 100% right about the banks and bailouts, though. That's not a private enterprise problem, though — that's a "our government is doing a stupid thing" problem.

netcan 6y ago
>>most industries aren't run by monopolies Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these? Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy, but good. Pretty unbureaucratic and efficient. Well functioning markets are great when you have them, they just aren't most of the economy. Some industries (eg FMCGs, shipping) are concentrated, but a degree of market discipline still operates. Not like hairdressing, but there is at least price competition within a limited frame. Some private industries are just impossible to pick apart from government: Health and pharmaceuticals, all government contracting, real estate, etc. Most market mechanisms don't apply here either. They certainly don't apply in "systemic" situations. It is a fact that a lot (arguably most) of the economy is very far from the market ideal that restaurants operate within. It's not totally black and white, but thinking of these issues in a 1970s frame is silly. That doesn't mean private and public are identical, but a Smithian pin factory is as bad a model for most of the economy as a local fire department.
- bhupy 6y ago
  > Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these? Mineral exploration: https://www.manta.com/mb_35_E31F37VC_000/mineral_exploration https://www.manta.com/mb_35_E31F37VC_000/mineral_exploration Refining: https://www.mckinseyenergyinsights.com/resources/refinery-reference-desk/refining-companies/ https://www.mckinseyenergyinsights.com/resources/refinery-re... Technology: https://medium.com/@progressivepolicyinstitute/10-things-you-need-to-know-about-tech-and-antitrust-6c077bf71dc5 https://medium.com/@progressivepolicyinstitute/10-things-you... Military industry: https://en.wikipedia.org/wiki/List_of_defense_contractors https://en.wikipedia.org/wiki/List_of_defense_contractors Finance & Banking: https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_United_States https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_U... Online retail: https://www.ben-evans.com/benedictevans/2019/12/amazons-market-share19 https://www.ben-evans.com/benedictevans/2019/12/amazons-mark... None of these are monopolies. These are all concentrated, but not monopolized. To your later point, market discipline still functions in concentrated industries. > Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy. The vast majority of industries are either operated by many small players, or a few large players (concentration). Actual monopolies are extraordinarily rare. > Health and pharmaceuticals, all government contracting, Real Estate, etc. No market mechanism here either This is also untrue. Health & pharmaceuticals: Same story. concentration? Perhaps. Monopoly? Not by a long shot. You have major players like Johnson & Johnson, Pfizer, Merck, GSK, Amgen BV, Abbott, McKesson, etc etc. Ditto real estate: https://www.propertymanagerinsider.com/the-biggest-u-s-based-real-estate-companies/ https://www.propertymanagerinsider.com/the-biggest-u-s-based... The private sector isn't a silver bullet, and there's always a place for democracy and governments. But we have to be real about what works where, and what doesn't.