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In that case you have more terrible scenario where you have certain companies who are not interested in becoming too large. The innovation happens outside the p

In that case you have more terrible scenario where you have certain companies who are not interested in becoming too large. The innovation happens outside the parent company as a separate entity. You end up having lego pieces that come together to build something bigger which becomes economically wasteful. You are imposing a cost on folks to think big. Tesla or SpaceX be vision are trying to be super large behemoths. Among all these calls for "regulation" what is lacking is the broader principle that we will use to regulate not just big tech but for anyone. Google is different than Exxon but I would like the principle that regulations them to be the same. When you look at Texas or Florida trying to pass regulations around tech, they seem pretty terrifying where as California's regulation appears to be a big time nothing-burger.

vlovich123 5y ago
Why is a uniform regulatory application across industries required? That seems to have an aesthetic principle but I can’t imagine why it matters. We already regulate every industry separately since the problems posed within each industry is unique. Tech has a disconnect of scale between size of the company and reach that we haven’t seen. Oil has pollution that tech mostly doesn’t. Nuclear power plants have to deal with nuclear waste. There’s certain overlaps but I think saying “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” is a weird and arbitrary line to draw. Same goes for your comment about inefficiencies. That seems to presuppose a particular truth without actually presenting any evidence. Sure there can be inefficiencies from having multiple companies involved. Conversely you also can have better innovation as ideas are allowed to be tested without having to get buy in within one large massive corporation. Think for example about Xerox where their Parc laboratory was regularly churning out ground breaking research that was dying on the vine within Xerox. For what it’s worth that’s potentially the case within big tech (eg Vine getting killed within Twitter and then TikTok showing success).
- KorematsuFredt 5y ago
  Let me respond to the second portion first. > That seems to presuppose a particular truth without actually presenting any evidence. What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. If the law makes it impossible to try certain things you are killing off innovation along that dimension. Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. Now, one may disagree with the markets as well and call it "superstitious belief in markets" but then I won't have any rebuttal to that claim. > “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” This is not what I said. The regulation can be whatever, ultimately they will be determined not by Stanford profs but lobbyist behind close doors bribing congress. Principles often are much simpler, easier to explain to people and much easier to judge regulations by looking at the principle. One simple principle could be that "pumping co2 in air is bad". We can agree to disagree but we understand the principle. We can understand if companies who produce more co2 are somehow asked to pay higher taxes. I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points.
  - vlovich123 5y ago
    > What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. That feels like a conclusion from flawed first principles. Google is in the game of getting maximum reward for minimum effort/cost, not innovating for innovation's sake. If the cheapest path to that reward is innovation, they'll do that (& they spend many $$ on that because of history lessons - don't get me wrong on that point). However, if the cheapest path is an alternative decision, they'll do that instead (e.g. spending many $$ paying people to work on tax loopholes). Your position ignores the fact that being the 1T gorilla in the room gives them significant advantages that, to them, are worth the disadvantage of slower innovation. Business is all about tradeoffs after all. For example, as the 1T gorilla in the room underpinning a good chunk of the US economy & employing many people, you can: * Throw your weight around more easily with regulatory bodies & lobby for laws/government business that you would have a harder time with as a smaller company * You have a stronger reputation as being a "reliable" business ("nobody got fired for buying IBM") * You can instill regulatory roadblocks for strategic industries you wish to defend * You can tackle ever bigger problems that only exist because you're trying to grow the company ever bigger (but that don't necessarily provide societal value) * You can stifle competition through acquisitions (Instagram, DoubleClick, etc) * You can slurp up all available talent that could pose a threat * You can engage in collusion with competitors to retain a market leadership position * You can engage in collusion to control the employee market wages (see Google, Apple & others colluding to suppress Web Browser developer salaries & other cases that have reappeared as the fines these companies have paid have not outweighed the benefits of engaging in these tactics). etc etc. These examples aren't hypothetical. They're easily observed by just passively observing business history over your own lifetime or reading up on it a little. For example, look at the widespread wage suppression and non-competes tech companies have engaged in over the years. > Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. I challenge this statement. To me your theory and my empirical evidence are in direct conflict. The scientific method encourages you to question your theory or to back it up with concrete evidence that the world works the way you are modelling it. Your argument is kind of like the high school physics problem of "let's ignore friction and wind resistance" except worse because to me it's more akin to arguing for Aristotle's bodies of motion when you already have a lot of experimental evidence showing the model is incomplete/wrong. > I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points. I agree with you there but I think you're not presenting the arguments in the best light (independent of whether or not these profs make them). Typically the stronger versions of the arguments go something like: * Big tech is acquiring companies before they can compete. This both hurts innovation & the US economy in the long term because these big tech companies are extremely efficient at their own growth, but that's not necessarily yielding the broader benefits needed by the economy for productivity/innovation. * Big tech media companies aren't responsible stewards for their platforms. They've grabbed the highly lucrative side of the business (ads) while pushing costs as negative externalities (misinformation, manipulate & malicious ads, scams, etc) through intentionally or incompetent policies and practices. Indeed, maybe less consolidation in the media space across the board would be better (not just in the Internet) so that issues are more diffuse rather than being hyper concentrated. * Big tech companies are colluding with each other in ways that are counterproductive to the industry and the broader economy, indirectly raising costs through their domination of the industries they compete in. There are numerous instances of such collusion and in the past we've punished other companies trying to do similar things in other industries. I think "too big" or "too much power" is used as short-hand for these (& many other) specific problems that can't be fully enumerated in interviews. If the professors fail to make a more cogent argument in the books as you've claimed, then that's a valid critique, but I wouldn't base that assumption just from excerpts.
paulryanrogers 5y ago
> You end up having lego pieces that come together to build something bigger which becomes economically wasteful. Isn't this offset somewhat by increased competition forcing those operations to be as efficient as practical? Large, vertically integrated companies can afford to comply with more stringent regulation.
- KorematsuFredt 5y ago
  No. Most efficient allocation of resources happens in a free market, not in an overly regulated market. (Of course exceptions exist due to externalities but we are not arguing those here.) There are many good examples here. First one that comes to mind is the auto dealers. Telsa without dealers offers far better experience where as car dealers are normally despised. Having more car dealers have not really improved dealership experience for us. Resources wise it is extremely wasteful. > Large, vertically integrated companies can afford to comply with more stringent regulation. While this is true, they do not tend to get large overnight. It is a slow process and a learning curve for many. With higher regulations you end up creating significant friction at certain key levels. Some companies that would have gotten large wont grow large if you apply higher regulation to some companies.
  - mLuby 5y ago
    > Most efficient allocation of resources happens in a free market, not in an overly regulated market. No, in a free market, it's winner take all in the race to become too big to fail, regulate, or compete against, so the mega-corp(s) can sit back and collect rents. We don't want free markets, we want competitive markets. Car dealerships aren't a good example because they're often franchises. That's like saying it's "competition" if McDonalds Corporate ship fries directly to consumers, bypassing its own (franchised) McDonalds locations. Competition is between McDonalds, Burger King, and your local hamburger stand.
  - jyounker 5y ago
    I've never seen anything to suggest that a "free-market" is a stable environment. Historically it seems that the natural end-point for a "free-market" is control by a few large coordinating monopolies and monopsonies, which is anything but a free market in the economic sense. The only way I've ever read of/seen for maintaining something approximating a free market is significant government regulation and intervention. Significant regulation of large economic entities is probably a very good thing for the overall economy in the long term.

vlovich123 5y ago

Why is a uniform regulatory application across industries required? That seems to have an aesthetic principle but I can’t imagine why it matters. We already regulate every industry separately since the problems posed within each industry is unique. Tech has a disconnect of scale between size of the company and reach that we haven’t seen. Oil has pollution that tech mostly doesn’t. Nuclear power plants have to deal with nuclear waste. There’s certain overlaps but I think saying “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” is a weird and arbitrary line to draw. Same goes for your comment about inefficiencies. That seems to presuppose a particular truth without actually presenting any evidence. Sure there can be inefficiencies from having multiple companies involved. Conversely you also can have better innovation as ideas are allowed to be tested without having to get buy in within one large massive corporation. Think for example about Xerox where their Parc laboratory was regularly churning out ground breaking research that was dying on the vine within Xerox. For what it’s worth that’s potentially the case within big tech (eg Vine getting killed within Twitter and then TikTok showing success).

KorematsuFredt 5y ago
Let me respond to the second portion first. > That seems to presuppose a particular truth without actually presenting any evidence. What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. If the law makes it impossible to try certain things you are killing off innovation along that dimension. Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. Now, one may disagree with the markets as well and call it "superstitious belief in markets" but then I won't have any rebuttal to that claim. > “all the regulations that apply to big company X in industry Y have to apply to big company A in industry B” This is not what I said. The regulation can be whatever, ultimately they will be determined not by Stanford profs but lobbyist behind close doors bribing congress. Principles often are much simpler, easier to explain to people and much easier to judge regulations by looking at the principle. One simple principle could be that "pumping co2 in air is bad". We can agree to disagree but we understand the principle. We can understand if companies who produce more co2 are somehow asked to pay higher taxes. I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points.
- vlovich123 5y ago
  > What I have said is mostly classical economics 101. If the point is Google could innovate faster if it is split into 10 companies, Google has all the incentive to do it today or alternatively for a Google competitor to split itself into smaller companies in order to beat Google. In either case, when people are free to chose, they will over time make the most efficient choices. This is part of the reason why markets tend to allocate resources better than government folks. That feels like a conclusion from flawed first principles. Google is in the game of getting maximum reward for minimum effort/cost, not innovating for innovation's sake. If the cheapest path to that reward is innovation, they'll do that (& they spend many $$ on that because of history lessons - don't get me wrong on that point). However, if the cheapest path is an alternative decision, they'll do that instead (e.g. spending many $$ paying people to work on tax loopholes). Your position ignores the fact that being the 1T gorilla in the room gives them significant advantages that, to them, are worth the disadvantage of slower innovation. Business is all about tradeoffs after all. For example, as the 1T gorilla in the room underpinning a good chunk of the US economy & employing many people, you can: * Throw your weight around more easily with regulatory bodies & lobby for laws/government business that you would have a harder time with as a smaller company * You have a stronger reputation as being a "reliable" business ("nobody got fired for buying IBM") * You can instill regulatory roadblocks for strategic industries you wish to defend * You can tackle ever bigger problems that only exist because you're trying to grow the company ever bigger (but that don't necessarily provide societal value) * You can stifle competition through acquisitions (Instagram, DoubleClick, etc) * You can slurp up all available talent that could pose a threat * You can engage in collusion with competitors to retain a market leadership position * You can engage in collusion to control the employee market wages (see Google, Apple & others colluding to suppress Web Browser developer salaries & other cases that have reappeared as the fines these companies have paid have not outweighed the benefits of engaging in these tactics). etc etc. These examples aren't hypothetical. They're easily observed by just passively observing business history over your own lifetime or reading up on it a little. For example, look at the widespread wage suppression and non-competes tech companies have engaged in over the years. > Again, this does not need empirical evidence (even though there is plenty) but mostly basics of classical economics. I challenge this statement. To me your theory and my empirical evidence are in direct conflict. The scientific method encourages you to question your theory or to back it up with concrete evidence that the world works the way you are modelling it. Your argument is kind of like the high school physics problem of "let's ignore friction and wind resistance" except worse because to me it's more akin to arguing for Aristotle's bodies of motion when you already have a lot of experimental evidence showing the model is incomplete/wrong. > I tried to read book excerpts from the Stanford professors and it appeared to be complete BS vending. Arguments like "Big Tech is too big" ,"Big tech has too much power" etc. simply does not make sensible principles as much as they make excellent rhetorical points. I agree with you there but I think you're not presenting the arguments in the best light (independent of whether or not these profs make them). Typically the stronger versions of the arguments go something like: * Big tech is acquiring companies before they can compete. This both hurts innovation & the US economy in the long term because these big tech companies are extremely efficient at their own growth, but that's not necessarily yielding the broader benefits needed by the economy for productivity/innovation. * Big tech media companies aren't responsible stewards for their platforms. They've grabbed the highly lucrative side of the business (ads) while pushing costs as negative externalities (misinformation, manipulate & malicious ads, scams, etc) through intentionally or incompetent policies and practices. Indeed, maybe less consolidation in the media space across the board would be better (not just in the Internet) so that issues are more diffuse rather than being hyper concentrated. * Big tech companies are colluding with each other in ways that are counterproductive to the industry and the broader economy, indirectly raising costs through their domination of the industries they compete in. There are numerous instances of such collusion and in the past we've punished other companies trying to do similar things in other industries. I think "too big" or "too much power" is used as short-hand for these (& many other) specific problems that can't be fully enumerated in interviews. If the professors fail to make a more cogent argument in the books as you've claimed, then that's a valid critique, but I wouldn't base that assumption just from excerpts.

paulryanrogers 5y ago

> You end up having lego pieces that come together to build something bigger which becomes economically wasteful. Isn't this offset somewhat by increased competition forcing those operations to be as efficient as practical? Large, vertically integrated companies can afford to comply with more stringent regulation.

KorematsuFredt 5y ago
No. Most efficient allocation of resources happens in a free market, not in an overly regulated market. (Of course exceptions exist due to externalities but we are not arguing those here.) There are many good examples here. First one that comes to mind is the auto dealers. Telsa without dealers offers far better experience where as car dealers are normally despised. Having more car dealers have not really improved dealership experience for us. Resources wise it is extremely wasteful. > Large, vertically integrated companies can afford to comply with more stringent regulation. While this is true, they do not tend to get large overnight. It is a slow process and a learning curve for many. With higher regulations you end up creating significant friction at certain key levels. Some companies that would have gotten large wont grow large if you apply higher regulation to some companies.
- mLuby 5y ago
  > Most efficient allocation of resources happens in a free market, not in an overly regulated market. No, in a free market, it's winner take all in the race to become too big to fail, regulate, or compete against, so the mega-corp(s) can sit back and collect rents. We don't want free markets, we want competitive markets. Car dealerships aren't a good example because they're often franchises. That's like saying it's "competition" if McDonalds Corporate ship fries directly to consumers, bypassing its own (franchised) McDonalds locations. Competition is between McDonalds, Burger King, and your local hamburger stand.
- jyounker 5y ago
  I've never seen anything to suggest that a "free-market" is a stable environment. Historically it seems that the natural end-point for a "free-market" is control by a few large coordinating monopolies and monopsonies, which is anything but a free market in the economic sense. The only way I've ever read of/seen for maintaining something approximating a free market is significant government regulation and intervention. Significant regulation of large economic entities is probably a very good thing for the overall economy in the long term.