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Cory Doctorow is ignorant of economics and competition policy. It’s frustrating to see his thoughts shared here so often. There is no credible economic theory

Cory Doctorow is ignorant of economics and competition policy. It’s frustrating to see his thoughts shared here so often. There is no credible economic theory of firm “power seeking”. What’s more, you don’t need such a theory to explain what’s going on here. If you want to explain why Google paid so much for Motorola, you can do so via the various defects in intellectual property law. All large firms are at least occasionally involved in patent litigation, frequently with patent trolls (though sometimes with large competitors too). This is familiar enough to everyone on this site. For Google this was a defensive acquisition, but a defense against frivolous litigation. There is no need to invent some theory of firm “power seeking” to make the case.

AlbertCory 5y ago
"Everything is about power": this reminds me of the 4-year-old who's just discovered a dirty word, and revels in its effect of shocking the grownups, so he yells it at every opportunity. Yes, boys and girls, "power" is sometimes a motivator. There are other ones, though. Maybe read a few more books.
guerrilla 5y ago
> There is no credible economic theory of firm “power seeking” How is the theory of market power combined with everything else we know not that? [1] It seems obviously in the firms interest even if their primary motive were still profit since it ensures increased rates of profit (modulo risk of a regulatory smackdown.) 1. https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power
- jgalt212 5y ago
  yes, but if you get powerful enough there is no regulatory smackdown. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture https://www.goodreads.com/book/show/34397551-the-chickenshit-club https://www.goodreads.com/book/show/34397551-the-chickenshit...
- huitzitziltzin 5y ago
  Market power is a well defined economic concept. I am an economist who works on that issue. If he wants to talk about market power I think that would be great! (Though not as an explanation for this case.) Indeed, I said I thought he was ignorant of economics in part bc he brought up this weird “capital as power” thing which has nothing to do (AFAICT) with actual market power as we understand it. Furthermore, in this particular case I think you get a much better, more direct explanation of Google’s behavior vis-a-vis its acquisition of Motorola via intellectual property and patent litigation than via market power, let alone via “capital as power”.
  - guerrilla 5y ago
    They seem to be economists too [1] and it seems like he's deferring to them. I haven't read their work but the way Cory presented it makes it sound like it's just basic Machiavellian realism[2] applied to economics and if that's all it is then I'm all in. Is there something specific you didn't like or just that the theory isn't presently popular among economists? What's your alternative story of what happened here? I'm not sure how intellectual property and patent litigation would conflict with what he's saying. 1. https://capitalaspower.com/about/ https://capitalaspower.com/about/ 2. https://iep.utm.edu/polreal/ https://iep.utm.edu/polreal/
- Nasrudith 5y ago
  The idea of powerseeking is an outright reification of power that conflates definitions by assuming the worst possible light. Influncing the market doesn't mean complete control over production - that is an obsession of Marx's ideological descendants. Just influncing it in either direction for any reason works. Providing it cheaper than market rates or convincing others to pay more also qualifies. If everyone in a village economy is capable of growing their own food on the side for about the equivalent of say $15/bushel averaged out but you have the specialization, mechanization to grow it for $1/bushel margins. Even if you wind up the only one growing food others still have their fields. If we call increasing efficiency "power seeking" then the term has lost any and all meaning and only serves to confuse and make the most mundane actions sinister by interpreting them in the most conspiratorial light. If you drink commodity coffee in the morning you actively to exploit the rural poor, if you go with more expensive fair trade coffee you are engaged in conspicious consumption of veblem goods while people starve, and if you just drink water you are trying to starve the rural poor.
  - guerrilla 5y ago
    What definitions do you believe are conflated? What "worst possible light" do you believe is being assumed? I don't think influencing the market means complete control over production. I don't know how you see that idea as inherited from Marx though and if it were, it would be fallacious to reject it on those grounds. To be clear though the authors that Cory is citing reject Marx in the first pages of their book and I myself have no interest in Marx other than historical. We don't call increasing efficiency "power seeking." Yes, I think many anti-capitalists would respond to that by saying that "there is no ethical consumption in capitalism" and that these problems cannot be solved by consumer choices.
  - saghm 5y ago
    > If we call increasing efficiency "power seeking" then the term has lost any and all meaning and only serves to confuse and make the most mundane actions sinister by interpreting them in the most conspiratorial light. Sure, but simply calling an acquisition like the one discussed in the article "increasing efficiency" interprets it the best possible light, which seems equally in need justification.
Ar-Curunir 5y ago
Maybe ask economists if there's a 'credible economic theory of firm “power seeking”'? https://capitalaspower.com/ https://capitalaspower.com/
dmoy 5y ago
It's like reading Paul Krugman talking about stuff other than economics. Freaking genius economist with amazing papers and articles (my personal favorite is his joke-but-actually-realistic paper on intergalactic trade). But then he strays into territory where he isn't actually an expert, connects a few dots, and then publishes in his NYT column despite it being mostly rubbish.
staticman2 5y ago
Doctorow seemingly believes most economists are full of crap so isn't going to recite whatever theory you subscribe to. He discusses his view of economics in this twitter thread here: https://twitter.com/doctorow/status/1450136949327425537?s=20 https://twitter.com/doctorow/status/1450136949327425537?s=20
- huitzitziltzin 5y ago
  It's funny to read that thread. There is stuff I agree with there! And more stuff I disagree with or is totally unfounded. - First of all, I have no interest in or patience for Ayn Rand. I don't know any economists who take her remotely seriously. All of the American economists I know are on the left politically. So are most of the non-American economists I know. There are, of course, prominent exceptions to the rule. - I don't know why we are accused of having no theory of prices? I teach that in week 2 of my principles of microeconomics class. I don't teach inflation b/c I don't teach macro, but they do have theories. - We don't assume people have perfect information, with the possible exception of using it as a very simple benchmark case on our way to something more complicated and realistic. Incomplete/imperfect information has been a central feature of all theoretical and empirical work in the profession for more than 40 years now. - He shares a post about concentration in meatpacking. I agree that we have allowed many markets to become too concentrated, including meatpacking! I am in favor of stronger antitrust enforcement! My entire sub-field is empirical studies of imperfectly competitive industries. - Skipping several tweets (there is really too much here to argue with every point...) we have talked about the CORE textbook in my department. Most of us put it on our syllabi. It is free, after all. As a comment on Doctorow's take: every Principles textbook mentions the environment because every Principles textbook talks about externalities. I spend a week on the subject. Again, I confirm my impression that he doesn't know anything about economics or competition policy, but studying it more seriously would be to his benefit, especially in commenting on technology and regulation issues.
  - Nasrudith 5y ago
    Perhaps theory of prices has a totally different meaning from "leftist" contexts? They operate under imperatives and assume there is some sort of ideal formulae that ignores that it makes the Knapsack Problem look log(n). "What the market will bear." is a nonanswer to them even though it is accurate because reality is messy with human psychology more so. Of course from mainstream economics perspective their concepts of value and exploitation are between fallacious (universal global value because labor is assumed as the basis) to pants-on-head levels of crazy (the idea that a fair trasaction becomes unfair when the buyer is able to reap later profit).
monocasa 5y ago
Patent portfolios aren't typically used as a defense against trolls. Since they're overwhelmingly non practicing entities, they're typically not infringing on anything.
- josaka 5y ago
  It's a defense against trolls acquiring those patents and leverage to force license on transfer deals with other large cos.
  - monocasa 5y ago
    Trolls have no problems finding patents, it's not that limited of a pool that you can suck them all up. And sure about MAD with big companies, but that's orthogonal to my comment on trolls.
dredmorbius 5y ago
https://www.taylorfrancis.com/chapters/edit/10.4324/9780203443408-9/knowledge-power-theory-firm-christos-pitelis https://www.taylorfrancis.com/chapters/edit/10.4324/97802034...

AlbertCory 5y ago

"Everything is about power": this reminds me of the 4-year-old who's just discovered a dirty word, and revels in its effect of shocking the grownups, so he yells it at every opportunity. Yes, boys and girls, "power" is sometimes a motivator. There are other ones, though. Maybe read a few more books.

guerrilla 5y ago

> There is no credible economic theory of firm “power seeking” How is the theory of market power combined with everything else we know not that? [1] It seems obviously in the firms interest even if their primary motive were still profit since it ensures increased rates of profit (modulo risk of a regulatory smackdown.) 1. https://en.wikipedia.org/wiki/Market_power https://en.wikipedia.org/wiki/Market_power

jgalt212 5y ago
yes, but if you get powerful enough there is no regulatory smackdown. https://en.wikipedia.org/wiki/Regulatory_capture https://en.wikipedia.org/wiki/Regulatory_capture https://www.goodreads.com/book/show/34397551-the-chickenshit-club https://www.goodreads.com/book/show/34397551-the-chickenshit...
huitzitziltzin 5y ago
Market power is a well defined economic concept. I am an economist who works on that issue. If he wants to talk about market power I think that would be great! (Though not as an explanation for this case.) Indeed, I said I thought he was ignorant of economics in part bc he brought up this weird “capital as power” thing which has nothing to do (AFAICT) with actual market power as we understand it. Furthermore, in this particular case I think you get a much better, more direct explanation of Google’s behavior vis-a-vis its acquisition of Motorola via intellectual property and patent litigation than via market power, let alone via “capital as power”.
- guerrilla 5y ago
  They seem to be economists too [1] and it seems like he's deferring to them. I haven't read their work but the way Cory presented it makes it sound like it's just basic Machiavellian realism[2] applied to economics and if that's all it is then I'm all in. Is there something specific you didn't like or just that the theory isn't presently popular among economists? What's your alternative story of what happened here? I'm not sure how intellectual property and patent litigation would conflict with what he's saying. 1. https://capitalaspower.com/about/ https://capitalaspower.com/about/ 2. https://iep.utm.edu/polreal/ https://iep.utm.edu/polreal/
Nasrudith 5y ago
The idea of powerseeking is an outright reification of power that conflates definitions by assuming the worst possible light. Influncing the market doesn't mean complete control over production - that is an obsession of Marx's ideological descendants. Just influncing it in either direction for any reason works. Providing it cheaper than market rates or convincing others to pay more also qualifies. If everyone in a village economy is capable of growing their own food on the side for about the equivalent of say $15/bushel averaged out but you have the specialization, mechanization to grow it for $1/bushel margins. Even if you wind up the only one growing food others still have their fields. If we call increasing efficiency "power seeking" then the term has lost any and all meaning and only serves to confuse and make the most mundane actions sinister by interpreting them in the most conspiratorial light. If you drink commodity coffee in the morning you actively to exploit the rural poor, if you go with more expensive fair trade coffee you are engaged in conspicious consumption of veblem goods while people starve, and if you just drink water you are trying to starve the rural poor.
- guerrilla 5y ago
  What definitions do you believe are conflated? What "worst possible light" do you believe is being assumed? I don't think influencing the market means complete control over production. I don't know how you see that idea as inherited from Marx though and if it were, it would be fallacious to reject it on those grounds. To be clear though the authors that Cory is citing reject Marx in the first pages of their book and I myself have no interest in Marx other than historical. We don't call increasing efficiency "power seeking." Yes, I think many anti-capitalists would respond to that by saying that "there is no ethical consumption in capitalism" and that these problems cannot be solved by consumer choices.
- saghm 5y ago
  > If we call increasing efficiency "power seeking" then the term has lost any and all meaning and only serves to confuse and make the most mundane actions sinister by interpreting them in the most conspiratorial light. Sure, but simply calling an acquisition like the one discussed in the article "increasing efficiency" interprets it the best possible light, which seems equally in need justification.

Ar-Curunir 5y ago

Maybe ask economists if there's a 'credible economic theory of firm “power seeking”'? https://capitalaspower.com/ https://capitalaspower.com/

dmoy 5y ago

It's like reading Paul Krugman talking about stuff other than economics. Freaking genius economist with amazing papers and articles (my personal favorite is his joke-but-actually-realistic paper on intergalactic trade). But then he strays into territory where he isn't actually an expert, connects a few dots, and then publishes in his NYT column despite it being mostly rubbish.

staticman2 5y ago

Doctorow seemingly believes most economists are full of crap so isn't going to recite whatever theory you subscribe to. He discusses his view of economics in this twitter thread here: https://twitter.com/doctorow/status/1450136949327425537?s=20 https://twitter.com/doctorow/status/1450136949327425537?s=20

huitzitziltzin 5y ago
It's funny to read that thread. There is stuff I agree with there! And more stuff I disagree with or is totally unfounded. - First of all, I have no interest in or patience for Ayn Rand. I don't know any economists who take her remotely seriously. All of the American economists I know are on the left politically. So are most of the non-American economists I know. There are, of course, prominent exceptions to the rule. - I don't know why we are accused of having no theory of prices? I teach that in week 2 of my principles of microeconomics class. I don't teach inflation b/c I don't teach macro, but they do have theories. - We don't assume people have perfect information, with the possible exception of using it as a very simple benchmark case on our way to something more complicated and realistic. Incomplete/imperfect information has been a central feature of all theoretical and empirical work in the profession for more than 40 years now. - He shares a post about concentration in meatpacking. I agree that we have allowed many markets to become too concentrated, including meatpacking! I am in favor of stronger antitrust enforcement! My entire sub-field is empirical studies of imperfectly competitive industries. - Skipping several tweets (there is really too much here to argue with every point...) we have talked about the CORE textbook in my department. Most of us put it on our syllabi. It is free, after all. As a comment on Doctorow's take: every Principles textbook mentions the environment because every Principles textbook talks about externalities. I spend a week on the subject. Again, I confirm my impression that he doesn't know anything about economics or competition policy, but studying it more seriously would be to his benefit, especially in commenting on technology and regulation issues.
- Nasrudith 5y ago
  Perhaps theory of prices has a totally different meaning from "leftist" contexts? They operate under imperatives and assume there is some sort of ideal formulae that ignores that it makes the Knapsack Problem look log(n). "What the market will bear." is a nonanswer to them even though it is accurate because reality is messy with human psychology more so. Of course from mainstream economics perspective their concepts of value and exploitation are between fallacious (universal global value because labor is assumed as the basis) to pants-on-head levels of crazy (the idea that a fair trasaction becomes unfair when the buyer is able to reap later profit).

monocasa 5y ago

Patent portfolios aren't typically used as a defense against trolls. Since they're overwhelmingly non practicing entities, they're typically not infringing on anything.

josaka 5y ago
It's a defense against trolls acquiring those patents and leverage to force license on transfer deals with other large cos.
- monocasa 5y ago
  Trolls have no problems finding patents, it's not that limited of a pool that you can suck them all up. And sure about MAD with big companies, but that's orthogonal to my comment on trolls.

dredmorbius 5y ago

https://www.taylorfrancis.com/chapters/edit/10.4324/9780203443408-9/knowledge-power-theory-firm-christos-pitelis https://www.taylorfrancis.com/chapters/edit/10.4324/97802034...