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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

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.
- KorematsuFredt 5y ago
  First of all thank you for writing a detailed answer. Clearly you have taken a lot of efforts and been very articulate. > 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. You are absolutely right. You are talking about regulatory capture here and larger companies are in better position for regulatory capture. What you are proposing however is more regulation to prevent this very situation. Very likely this will lead to even more regulatory capture. We have seen this with health insurance, utilities and telecom companies where government steps in to prevent these companies from making too much of profit but then grants them monopolies causing stagnation of innovation. The correct solution IMO here is that less power in the hands of government so there are less avenues for regulatory capture. But let us look at the facts. Is Apple, Google or Facebook today too large because of regulatory capture or innovation? Compared to any industry I think tech in USA is growing due to the latter. (Exceptions like Visa, Mastercard, Intuit exist, and I do believe government has failed to be a custodian of markets here). > 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. Fair enough. After all, all theory must be put to test. We can easily see my logic in practice by taking example of utility companies like PE&E, Oil and Gas industry, health insurance industry or almost every industry in Europe which is heavily regulated to prevent them from making "too much profit" or is restricted in terms of how much they can grow. Contrast nearly any industry on planet earth today with USA's tech industry and USA's tech industry comes on top in terms of wealth creation, better workplace standards, innovation and in some cases mind boggling ambitious companies like SpaceX. Not only American tech companies are engines of growth and some of the best places to work for, they are also cheap for their consumers and massive force for good at global scale. (This is not to say they don't have any dark side but when you put all numbers together they come up on top.) What is not broken should not be fixed. > * 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 Yes, that is a good principle that these people can talk about rather than "too big" argument. Once these principles are clear, I think it is much easier to show them as well known economic fallacies. > I think "too big" or "too much power" is used as short-hand for these Yes, and that is precisely what I find dangerous. We must be debating those very principles and not the question of whether we need more regulation or not. For example on this very HN thread hoe many people are debating those precise principles ? Almost none.

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.

KorematsuFredt 5y ago
First of all thank you for writing a detailed answer. Clearly you have taken a lot of efforts and been very articulate. > 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. You are absolutely right. You are talking about regulatory capture here and larger companies are in better position for regulatory capture. What you are proposing however is more regulation to prevent this very situation. Very likely this will lead to even more regulatory capture. We have seen this with health insurance, utilities and telecom companies where government steps in to prevent these companies from making too much of profit but then grants them monopolies causing stagnation of innovation. The correct solution IMO here is that less power in the hands of government so there are less avenues for regulatory capture. But let us look at the facts. Is Apple, Google or Facebook today too large because of regulatory capture or innovation? Compared to any industry I think tech in USA is growing due to the latter. (Exceptions like Visa, Mastercard, Intuit exist, and I do believe government has failed to be a custodian of markets here). > 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. Fair enough. After all, all theory must be put to test. We can easily see my logic in practice by taking example of utility companies like PE&E, Oil and Gas industry, health insurance industry or almost every industry in Europe which is heavily regulated to prevent them from making "too much profit" or is restricted in terms of how much they can grow. Contrast nearly any industry on planet earth today with USA's tech industry and USA's tech industry comes on top in terms of wealth creation, better workplace standards, innovation and in some cases mind boggling ambitious companies like SpaceX. Not only American tech companies are engines of growth and some of the best places to work for, they are also cheap for their consumers and massive force for good at global scale. (This is not to say they don't have any dark side but when you put all numbers together they come up on top.) What is not broken should not be fixed. > * 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 Yes, that is a good principle that these people can talk about rather than "too big" argument. Once these principles are clear, I think it is much easier to show them as well known economic fallacies. > I think "too big" or "too much power" is used as short-hand for these Yes, and that is precisely what I find dangerous. We must be debating those very principles and not the question of whether we need more regulation or not. For example on this very HN thread hoe many people are debating those precise principles ? Almost none.