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Crunchyroll acquired by Sony, BD acquired by Hyundai, Slack acquired by Salesforce... Our economic system seems to have a natural tendency towards monopoly. Th

Crunchyroll acquired by Sony, BD acquired by Hyundai, Slack acquired by Salesforce... Our economic system seems to have a natural tendency towards monopoly. This is happening before our eyes and we don't even realise it.

throwbacktictac 6y ago
Can you expand upon you thought? How do each of these acquisition make a case for the acquirer tending towards a monopoly? It seems Boston Dyanmics is a solution looking for a problem. It can be a great company but it's going to take a long investment by Hyundai. It's been in the hands of some huge companies and none of them have been able to squeeze a profit out of it.
- postingpals 6y ago
  These are just 3 examples of thousands of acquisitions by big companies with dominance in their industry. The trend is very clear, a handful of companies buy out competition and own virtually every serious competitor in the market. There are ongoing lawsuits against tech companies for doing this, and unfortunately companies can lobby to keep the laws on their side. Also, businesses like BD are always going to tend to want to sell rather than compete, this is obvious. I don't see how one could argue there is no natural tendency towards monopoly capital given these key facts.
- blahblahblogger 6y ago
  This is a key point of Peter Thiel's in his talk at YC from some years ago. He expands on it to great effect in a few other videos too: https://www.youtube.com/watch?v=vtJ0C0UHFfE https://www.youtube.com/watch?v=vtJ0C0UHFfE.
JumpCrisscross 6y ago
> Our economic system seems to have a natural tendency towards monopoly We had this in post-War America. What broke it up? Activist investors. Corporate raiders. The stereotypical bad guys of 1990s media. (Also, antitrust action. The situation is a product of public and private sector failures combined.)
jandrese 6y ago
In market based economies there will always be a general movement of capital to the top, because simply having money allow you to earn more money. It's a positive feedback loop. That's why it is important for an external force, which pretty much has to be a government, to tax the wealth at the top and move it back to the bottom. Otherwise the system gradually turns into feudalism by its very nature. A government that stops taxing the richest companies and citizens is failing in its duty to protect the health of the market.
- saberdancer 6y ago
  This doesn't seem to be true, biggest companies today weren't biggest companies 50 years ago. Even in IT, IBM is not giant that it was and was succeeded by newer companies.
  - drew-y 6y ago
    I don't think the comment is referring to individual companies but the market as a whole. It's clear that wealth is and has always tended to accumulate to the richest when not checked. This article does a great job laying out some examples. https://www.brookings.edu/blog/up-front/2019/06/25/six-facts-about-wealth-in-the-united-states/ https://www.brookings.edu/blog/up-front/2019/06/25/six-facts... > In fact, the top one percent alone holds more wealth than the middle class. They owned 29 percent—or over $25 trillion—of household wealth in 2016, while the middle class owned just $18 trillion.[iii] > This has not always been the case. Before 2010, the middle class owned more wealth than the top one percent. Since 1995, the share of wealth held by the middle class has steadily declined, while the top one percent’s share has steadily increased.[iv]
- WanderPanda 6y ago
  Thats not at all correct. In the mid to long term money will move to the person allocating it most efficiently. This of course assuming a non corrupt government. And thats where I see the actual positive feedback loop: People like you want the government to have more power, with more power there is more room for corruption/lobbyism, people demand even more government power
ActorNightly 6y ago
Don't confuse monopoly with consolidation. When Salesforce goes out and gets a patent that says you can't have any client resembling Slack without paying them royalties , then you can consider that a monopoly. And for fringe companies like BD, its honestly better that they get acquired by someone that can dump IRAD money into it cause the research that comes out of these is arguably more valuable than the products they produce.
- postingpals 6y ago
  Contrary to what you might have learned on hackernews, monopoly doesn't mean there is no alternative and having no alternatives is not the primary downside to monopolies. > United States v. Grinnell Corp., 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.
  - ActorNightly 6y ago
    Sure, but none of the cases listed in the comment I replied to are close to having control like Grinnell+affiliates.
jl6 6y ago
Alternative take: consumer behaviour that demands complex integrated products incentivizes the formation of large corporate bodies that can marshall the many skills and resources required to make them, with the economies of scale that make them viable. Semi-facetious summary: there’s not a lot of demand for local, organic, artisan all-terrain robot packhorses.
- ZephyrBlu 6y ago
  That's true in the case of Boston Dynamics. Definitely seems less true in regards to a company like Crunchy Roll though.
  - jl6 6y ago
    It’s totally applicable. Crunchy Roll are a media aggregator - the more aggregated a service is, the better value. Consider consumer unwillingness to subscribe to 5-6 different streaming services, but toleration of having 2-3. In fact, consumers would prefer just to have one that does everything. In other words, a direct connection between consumer demand and monopoly creation.
- beyondcompute 6y ago
  Another take. I think that one of the forces that promote “monopolization” on the internet at least might be the issue of trust. It’s harder to trust “smaller” (or less known) businesses on the internet and vendors on platforms like Ebay, Etsy, Airbnb. Roughly speaking there’s quite a lot of scam and low quality products/services out there. Things work differently offline where physical location can in many situations create more sense of trustworthiness even for smaller businesses. Online – your brand is extremely important. And bigger companies tend to have better established brands. Just a speculation (and not very related to BD in particular but to a situation where internet got overtaken by corporations instead of becoming that decentralized paradise we once hoped for).
- andbberger 6y ago
  Do you actually believe that?
- 6y ago
somethoughts 6y ago
Low interest rates make M&A attractive. Its very similar to real estate investing and using existing property as collateral for new property purchases. There's a low barrier for the project to result in a decent IRR.
harperlee 6y ago
Money is historically cheap, it is time to leverage that and buy whenever it makes sense. That drives a lot of M&A.
Ecstatify 6y ago
When interest rates are low it makes sense for companies to acquire companies. COVID also exposed some companies, so the acquiring company can get a bargain.
lucian1900 6y ago
It's certainly the dominant trend, but it's not new. Lenin analysed it more than a century ago https://www.marxists.org/archive/lenin/works/1916/imp-hsc/ https://www.marxists.org/archive/lenin/works/1916/imp-hsc/
efficax 6y ago
Monopoly is inherently the tendency of capitalism because price competition forces profit margins down, meaning you can only match your earlier gains by expanding your market. The easiest way to do that is to acquire competitors
Ziggy_Zaggy 6y ago
Plenty of us are seeing it happen. Now we just have to figure out how to take action to redesign the system to stop and undo it or use the tools already avaiable to undo the damage.
jelliclesfarm 6y ago
BD is hardly the only one in the game. Even though they did sink in a lot of R&D that was likely done by Google..because remember BD was alphabet owned before SoftBank acquired it. Ghost Robotics...DARPA funded.. are actually a tad cheaper but will likely only for govt and military contracts first.

throwbacktictac 6y ago

Can you expand upon you thought? How do each of these acquisition make a case for the acquirer tending towards a monopoly? It seems Boston Dyanmics is a solution looking for a problem. It can be a great company but it's going to take a long investment by Hyundai. It's been in the hands of some huge companies and none of them have been able to squeeze a profit out of it.

postingpals 6y ago
These are just 3 examples of thousands of acquisitions by big companies with dominance in their industry. The trend is very clear, a handful of companies buy out competition and own virtually every serious competitor in the market. There are ongoing lawsuits against tech companies for doing this, and unfortunately companies can lobby to keep the laws on their side. Also, businesses like BD are always going to tend to want to sell rather than compete, this is obvious. I don't see how one could argue there is no natural tendency towards monopoly capital given these key facts.
blahblahblogger 6y ago
This is a key point of Peter Thiel's in his talk at YC from some years ago. He expands on it to great effect in a few other videos too: https://www.youtube.com/watch?v=vtJ0C0UHFfE https://www.youtube.com/watch?v=vtJ0C0UHFfE.

JumpCrisscross 6y ago

> Our economic system seems to have a natural tendency towards monopoly We had this in post-War America. What broke it up? Activist investors. Corporate raiders. The stereotypical bad guys of 1990s media. (Also, antitrust action. The situation is a product of public and private sector failures combined.)

jandrese 6y ago

In market based economies there will always be a general movement of capital to the top, because simply having money allow you to earn more money. It's a positive feedback loop. That's why it is important for an external force, which pretty much has to be a government, to tax the wealth at the top and move it back to the bottom. Otherwise the system gradually turns into feudalism by its very nature. A government that stops taxing the richest companies and citizens is failing in its duty to protect the health of the market.

saberdancer 6y ago
This doesn't seem to be true, biggest companies today weren't biggest companies 50 years ago. Even in IT, IBM is not giant that it was and was succeeded by newer companies.
- drew-y 6y ago
  I don't think the comment is referring to individual companies but the market as a whole. It's clear that wealth is and has always tended to accumulate to the richest when not checked. This article does a great job laying out some examples. https://www.brookings.edu/blog/up-front/2019/06/25/six-facts-about-wealth-in-the-united-states/ https://www.brookings.edu/blog/up-front/2019/06/25/six-facts... > In fact, the top one percent alone holds more wealth than the middle class. They owned 29 percent—or over $25 trillion—of household wealth in 2016, while the middle class owned just $18 trillion.[iii] > This has not always been the case. Before 2010, the middle class owned more wealth than the top one percent. Since 1995, the share of wealth held by the middle class has steadily declined, while the top one percent’s share has steadily increased.[iv]
WanderPanda 6y ago
Thats not at all correct. In the mid to long term money will move to the person allocating it most efficiently. This of course assuming a non corrupt government. And thats where I see the actual positive feedback loop: People like you want the government to have more power, with more power there is more room for corruption/lobbyism, people demand even more government power

ActorNightly 6y ago

Don't confuse monopoly with consolidation. When Salesforce goes out and gets a patent that says you can't have any client resembling Slack without paying them royalties , then you can consider that a monopoly. And for fringe companies like BD, its honestly better that they get acquired by someone that can dump IRAD money into it cause the research that comes out of these is arguably more valuable than the products they produce.

postingpals 6y ago
Contrary to what you might have learned on hackernews, monopoly doesn't mean there is no alternative and having no alternatives is not the primary downside to monopolies. > United States v. Grinnell Corp., 384 U.S. 563 (1966) Grinnell made plumbing supplies and fire sprinklers, and with affiliates had 87% of the central station protective service market. From this predominant share there was no doubt of monopoly power.
- ActorNightly 6y ago
  Sure, but none of the cases listed in the comment I replied to are close to having control like Grinnell+affiliates.

jl6 6y ago

Alternative take: consumer behaviour that demands complex integrated products incentivizes the formation of large corporate bodies that can marshall the many skills and resources required to make them, with the economies of scale that make them viable. Semi-facetious summary: there’s not a lot of demand for local, organic, artisan all-terrain robot packhorses.

ZephyrBlu 6y ago
That's true in the case of Boston Dynamics. Definitely seems less true in regards to a company like Crunchy Roll though.
- jl6 6y ago
  It’s totally applicable. Crunchy Roll are a media aggregator - the more aggregated a service is, the better value. Consider consumer unwillingness to subscribe to 5-6 different streaming services, but toleration of having 2-3. In fact, consumers would prefer just to have one that does everything. In other words, a direct connection between consumer demand and monopoly creation.
beyondcompute 6y ago
Another take. I think that one of the forces that promote “monopolization” on the internet at least might be the issue of trust. It’s harder to trust “smaller” (or less known) businesses on the internet and vendors on platforms like Ebay, Etsy, Airbnb. Roughly speaking there’s quite a lot of scam and low quality products/services out there. Things work differently offline where physical location can in many situations create more sense of trustworthiness even for smaller businesses. Online – your brand is extremely important. And bigger companies tend to have better established brands. Just a speculation (and not very related to BD in particular but to a situation where internet got overtaken by corporations instead of becoming that decentralized paradise we once hoped for).
andbberger 6y ago
Do you actually believe that?
6y ago

somethoughts 6y ago

Low interest rates make M&A attractive. Its very similar to real estate investing and using existing property as collateral for new property purchases. There's a low barrier for the project to result in a decent IRR.

harperlee 6y ago

Money is historically cheap, it is time to leverage that and buy whenever it makes sense. That drives a lot of M&A.

Ecstatify 6y ago

When interest rates are low it makes sense for companies to acquire companies. COVID also exposed some companies, so the acquiring company can get a bargain.

lucian1900 6y ago

It's certainly the dominant trend, but it's not new. Lenin analysed it more than a century ago https://www.marxists.org/archive/lenin/works/1916/imp-hsc/ https://www.marxists.org/archive/lenin/works/1916/imp-hsc/

efficax 6y ago

Monopoly is inherently the tendency of capitalism because price competition forces profit margins down, meaning you can only match your earlier gains by expanding your market. The easiest way to do that is to acquire competitors

Ziggy_Zaggy 6y ago

Plenty of us are seeing it happen. Now we just have to figure out how to take action to redesign the system to stop and undo it or use the tools already avaiable to undo the damage.

jelliclesfarm 6y ago

BD is hardly the only one in the game. Even though they did sink in a lot of R&D that was likely done by Google..because remember BD was alphabet owned before SoftBank acquired it. Ghost Robotics...DARPA funded.. are actually a tad cheaper but will likely only for govt and military contracts first.