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Massive consolidation is happening in every industry, IT distribution to cabinet parts to industrial equipent. I think it is from cheap debt allowing private e

• spaetzleesser 5y ago
  That’s just the natural way of capitalism if you allow companies to get bigger and bigger. They can buy up any upcoming competition for good money so most startups are being built to be bought and not as standalone businesses. You see that and also in medical devices where I work. Seems most industries will evolve into a state where you have 2-4 competitors that suppress all competition by building up regulatory hurdles and by their ability to buy small companies. I would be in favor of massively progressive taxation of large companies. I just don’t see the value of them beyond a certain size but I see a lot of danger accumulating so much power in their hands.
  • LogonType10 5y ago
    >I would be in favor of massively progressive taxation of large companies Say goodbye to electric cars.
    • fabianhjr 5y ago
      > As of December 2020, China had the largest stock of highway legal plug-in passenger cars with over 4.5 million units, 42% of the global plug-in car fleet in use.[10][20] China also dominates the plug-in light commercial vehicle and electric bus deployment, with its stock reaching over 500,000 buses in 2019, 98% of the global stock, and 247,500 electric light commercial vehicles, 65% of the global fleet.[21] Source: https://www.wikiwand.com/en/New_energy_vehicles_in_China https://www.wikiwand.com/en/New_energy_vehicles_in_China The difference isn't on taxation but investment; China invests way more in infrastructure and development. > Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times. The figure underscores a common theme running through his emerging empire: a public-private financing model underpinning long-shot start-ups. Source: https://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html https://www.latimes.com/business/la-fi-hy-musk-subsidies-201...
      • deleted 5y ago
        [deleted]
      • baybal2 5y ago
        Taxations is definitely different. Please check what Chinese tax rates are, and costs of doing business in China. In short, for those who don't want to lookup it themselves, it's way, way more, probably higher than even most highly taxed EU countries. I just 5 something years, Chinese manufacturing economy became completely unrecognisable. It's a hot money game now in a way US stock market will look rather decent, and logical.
      • archibaldJ 5y ago
        Taxation in China (at least by law) is quite comparable to Germany's (40+% when you reach ~$144k) but without all the social benefits. Unlike Germany, there are gray areas in the Chinese system where people find ways to pay less tax. But there are also other cost-inducing things than tax. In lights of the evergrande crisis, I'm not sure how efficient China's hugely state-directed investment system is. And much won't be achieved had there not been Deng's economic reforms and the tax indulgence that followed. More than anything, high taxation stifles innovations in China. What you see in China is not real innovation (in the sense of inventing new things), but social-mobility [1] as a consequence of authoritarianism which can result in mass adoption of technologies, etc. Also, considering the recent Tang Ping (躺平) movement, I don't think China's social-economy is currently in a healthy state. [1] https://andrewbatson.com/2021/10/13/mobilization-and-modules-whats-changing-in-china/ https://andrewbatson.com/2021/10/13/mobilization-and-modules...
        • fabianhjr 5y ago
          > recent Tang Ping (躺平) movement, I don't think China's social-economy is currently in a healthy state. Well, it is not like an antiwork movement has been forming on the US and is gaining mainstream traction. ( https://www.reddit.com/r/antiwork/ https://www.reddit.com/r/antiwork/ ) > In lights of the evergrande crisis, I'm not sure how efficient China's hugely state-directed investment system is. How is a private developer that overleveraged itself the fault of a state that is investing in _public infrastructure_ like high speed rail, nuclear reactors, and tech in general? Since anything vital is public property they can do what self-called capitalists in the US cannot: let evergrande fail. (No private company in China is "too big to fail")
    • spaetzleesser 5y ago
      Tesla didn’t need a trillion dollar valuation to have an impact on the car market. When Apple, Google or Microsoft made their biggest contributions to innovation they also were much smaller. Now they are just milking their market position for profit without generating much innovation.
  • thisisfine84 5y ago
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  • AnthonyMouse 5y ago
    > Seems most industries will evolve into a state where you have 2-4 competitors that suppress all competition by building up regulatory hurdles and by their ability to buy small companies. This isn't a natural law, it's the point at which antitrust stops letting them buy each other. If it wasn't for that they would merge to monopoly. And that few competitors is enough for them to implicitly or explicitly collude instead of actually competing. But it only works if barriers to entry are high. Otherwise investors would see profit in going into competition with the cartel. Which is why they lobby for regulatory barriers to prevent that from happening. > I would be in favor of massively progressive taxation of large companies. I just don’t see the value of them beyond a certain size but I see a lot of danger accumulating so much power in their hands. What causes this is really the opposite, and what you're suggesting would make it worse. Corporate expansion is a tax deduction to corporations because corporate income tax is a tax on profit and building new factories etc. to expand vertical integration is a cost. So they'd have more incentive to reinvest all their revenues instead of paying the tax. That's how you get Amazon. The real problem there is that we double tax corporations. So Ian invests in Apple and his share of Apple's profits are $1000. If Apple pays the money to Ian so he can go invest it in a company that makes electric cars, he has to pay tax on it right away, and then he has less to invest. If he leaves the money inside of Apple and Apple expands into making electric cars, he doesn't have to pay the tax until he sells his shares and gets to earn returns on the money in the meantime. So then investors have a preference for share price appreciation over dividends, which is equivalent to preferring conglomeration over returning profits to the investor to invest in independent companies. Then we get more and ever-expanding huge conglomerates and less independent companies that do one thing and do it well. The solution is to make dividends a tax deduction to the corporation. Then corporations with money they don't know what to do with will do that for the tax deduction.
    • specialist 5y ago
      I'm fine with returning to the system of high corporate income taxes, disbursing surplus to investors via dividends, high corporate R&D budgets, pensions, living wages, typical executive to janitor compensation ratio somewhere around 40:1, sustained productivity booms, and whatever other beneficial outcomes we got from the the last keynesian regime. I'm ambivalent about capital gains taxes on individual investors. The rate should probably adapt dynamically, like pick a target number for the gini coefficient (or whatever) and ratchet the tax rate as necessary. I'm completely untroubled by so-called double taxation. Squint and it looks like a VAT. It makes perfect sense to me that most every transaction should be taxed. That's kinda the point.
• DSingularity 5y ago
  Makes you wonder what the conclusion will be.
• not-elite 5y ago
  > This is one of the many ways endless years of emergency low interest rates are destroying the economy and the livelihood of many people. Japan has held rates near the zero lower bound since the late 1990s. If rates were the only factor, you'd expect to see the same situation there.
  • TheJoeMan 5y ago
    I’m not sure which country you’re from, but Japan lost their dominant position in US tech consumer goods around late 1990’s
  • speeder 5y ago
    You mean the country of the Zaibatsu? Where the economy is stagnant for the past several years? That has several global conglomerates like Sony and Toyota?
    • baybal2 5y ago
      Those zabatsu are by no means stagnant. Strong yen meant cheap investments for them overseas. Their business empire grew N-fold, they just didn't grow in Japan, but the rest of Asia. Find a name of any non-Chinese blue chip company from Asia, and there is good chance it has Japanese investors.
      • DiggyJohnson 5y ago
        > Their business empire grew N-fold, they just didn't grow in Japan, but the rest of Asia. I feel like that’s strengthening the point you’re arguing against. Consider the quotes sentence alongside the realities of American firms outsourcing their manufacturing. Yes the firms are still juiced by American investors, but there are additional concerns beyond the investment capital. It affects individuals jobs, industries, and economies here in America (or in Japan) for large components of the economy to happen elsewhere.
  • dmingod666 5y ago
    The time you refer to in Japan is also known as the 'lost decade'.
• baybal2 5y ago
  I am actually very glad that those investment wizards almost completely nuked whole sectors of the semiconductor market. It cleared a lot of long standing nasty monopolies, which self destructed since their LBO schemes collapsed, or... successfully went through, and they were sold to unwitting asset manager/banker types for $$$$$, just to be chopped up after they found what a load of lemons they bought.
  • convolvatron 5y ago
    certainly agree that there should be some kind of garbage collection process that pushes established companies to reinvent themselves at least a little to keep up. but i really dont want to give any credit to those guys - they certainly aren't discriminating - they'll eat, digest, extract any salable capital and just shit out whatever is left. i suppose you can argue that they exert an evolutionary pressure to develop an immune system (?)
• thisisfine84 5y ago
  Consolidation has been going on for decades. Previously it was blue collar companies, now it’s tech because they own the blue collar companies. Real environment consumption and simplifying necessary utilities I have no problem with. It’s the ownership model I take issue with. We dismantled many economical government systems through policy to make private ones look good while the private ones purposely fuel “consume, dispose” messaging. Lives WILL be disrupted by climate change. No law of physics guarantees anyone an American way of life. Physical reality provides the info we have to work with, no matter how hard politicians and willfully ignorant folks want to believe it’s grandpa and grandma’s sacrifice that willed society into existence.
• gumby 5y ago
  Matt stoller has written extensively on this topic, if it interests you.
• silexia 5y ago
  Another huge reason is government overregulation. It takes many years and millions of dollars of capital to start a bank or a medical business or many other types of companies. And don't forget the gigantic scam that is intellectual property. Creating one small pebble of an idea that could only be created because of the titanic mountain of human knowledge underneath it, and then block competition and progress for decades is horrifying.
  • dillondoyle 5y ago
    I think those are potentially the two worst examples to pick to argue for deregulation given the huge impacts on people's lives and potential of killing people (healthcare). Banks too though the risks are more from lessons learned from giant banks which you can't become overnight. But consumer protection is a big one, even if deposits are protected, predatory behavior is a big problem and profit center of small banks. I can definitely buy into less regulation for most other businesses or small businesses though.
• ItsMonkk 5y ago
  This is the conclusion that I am coming to as well. You need to pick the correct tool for the job. What's the correct tool? The simplest tool that can get the job done, the Principle of Least Power[0]. We often hear "Favor Composition over Inheritence", but never "These are the instances where Composition does not work, and Inheritence needs to be used instead."[1] Rich Hickey's "Simple Made Easy" shows many more examples, but this principle is very wide reaching. Prefer expressions over code blocks. Prefer for over while. Prefer map over for. Prefer data over functions. Prefer functions over macros. Prefer monoliths over micro-services. Prefer companies over governments. Prefer bikes over cars. Prefer smaller teams over bigger teams. It's that last one that is intriguing me. You need to ensure that all of the skills that you need to be in the company are there, you can leave a bit of a buffer like Kelly-sizing, and then you want to optimize for that and cut as much as you can. Vertical integration is just another instance of tight coupling. The less people in the company, the less you need to communicate, the more it can get done. You want the skills Venn diagram of the team to look like the Olympic rings. Social media runs into this same trap where communities grow far to large. The economies of scale within the space grows and even with the worsening of communication the entity gets stronger with each member according to a network effect. Both need some sort of dampening effect or forced splitting, but I don't know yet what that is. [0]: https://blog.codinghorror.com/the-principle-of-least-power/ https://blog.codinghorror.com/the-principle-of-least-power/
• r3trohack3r 5y ago
  This has been occupying my mind space lately. I used to describe this situation as “late stage capitalism” and lay the blame at capitalism’s feet. I’ve recently done a 180 on that. The tangling of Copyright, Trademark, and Patent law into the mega-legal structure of “intellectual property” law has had devastating effects IMO. The government creates and protects monopolies, and then allows those monopolies to be bought and sold like playing cards. It’s not surprising that pools of money result in the concentration of these government created monopolies. This is most evident to me in healthcare. The pattern in the late 2000s and 2010s was to purchase up drug companies for their IP, gut the R&D, and jack up drug prices since the government would enforce their monopoly - and consumers had no choice since they needed the drugs. Yes this is GREED, but this isn’t capitalism. Capitalism would _solve_ this - but government actively stands in the way of letting market pressures fix that market.
  • somewhereoutth 5y ago
    Governments create markets by creating and enforcing laws. Without government, without law, there would be no market. Capitalism allocates resources according to the decision making of holders of capital (assets, whether land, machinery, cash etc) - motivated by the desire to generate returns on that capital. This works pretty well, however it has a tendency to concentrate wealth in the hands of the few and away from the many. By enforcing patents etc, another asset class is constructed, ready for exploitation for revenue generation. Capitalism is thus extended - imagine if the government regulated fresh air, and allowed it to be bought and sold. Government is not the problem, and (more) capitalism is not the solution - it is bad government enabling the worst aspects of capitalism that is the problem, and it is good government harnessing capitalism for the benefit for everyone which is the solution.
    • r3trohack3r 5y ago
      I don’t disagree with what you’re saying. The core of it is what I was trying to say; you said it more eloquently/precisely than I did.
  • WarChortle 5y ago
• intricatedetail 5y ago
  I wonder why is this still not treated as a loophole in capitalism and it is not illegal. Perhaps because they have so much money they can stop any politicians raising the idea or shutting down any media for running the topic...