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I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth

by nverno 5y ago

I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth. It's a complicated, error-prone business, trying to disrupt monopolies effectively in such a way that is actually beneficial to the community. If you think about it, the cost/benefit analysis is based largely on economic predictions which are never that accurate.

djbusby 5y ago
Shouldn't the DOJ not be concerned with the economic impact? Isn't their objective Justice not Economic Prosperity?
- nverno 5y ago
  In the US, they are concerned with economic impact, they do a whole in-depth economic cost/benefit analysis as part of determining if it's worth breaking up a monopolist. Whatever 'justice' means in this scenario seems highly subjective. If a monopolist was providing by far the best/cheapest goods and services, more people might prefer that scenario to an alternative competitive market with less benefit on average. It's arguably unjust for the government to handicap specific people, but also unjust for others not to feel like they all have a fair shot to capture the market. Any time people, not fate, are in charge of handicapping some people will think they are getting the shaft.
  - robbedpeter 5y ago
    That sounds rational, but it's not. There's nobody, public or private sector, nobody at all that can make a real economic assessment of the value of a service line Facebook or Google. Those who claim otherwise are stupid, lying, or selling something. Markets and economics are unpredictable systems that have nothing to do with models of rational actors behaving in their own self interest. They're fundamentally extensions of chaotic biological systems and inherently resistant to oracles as a matter of mathematical reality. What would be rational is if we actually endeavored as a society to make sure everyone is accountable to the same rules to the same degree. By using this magical thinking / cost benefit analysis, we're simply incentivizing victory for the best storytelling middleman.
    - nverno 5y ago
      I think the difficulties/uncertainties you mention here are a large factor in the feds reluctance to break up monopolies. I have no personal opinion on these methods without taking a much deeper dive into the details. It does seem like the big breakup of Ma Bell worked out well, though. The statement "everyone is accountable to the same rules to the same degree" could be either pro- or anti- federal action.
AnthonyMouse 5y ago
> I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth. Find a monopoly and you'll probably find a regulation propping it up. For many of these tech companies it's DMCA 1201 and other things that prohibit adversarial interoperability. If you have a law that lets you boot competitors out of adjacent markets once you have dominance in one of them, you take over the other one too. Then nobody can compete with you unless they can replace you in both markets, meanwhile you enter a third. The first thing we need is to get rid of such laws.
- MereInterest 5y ago
  https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
  - AnthonyMouse 5y ago
    This tech stuff isn't a natural monopoly. The defining characteristic of a natural monopoly is that customer is paying a large amount per unit to cover costs that stay the same no matter the amount of usage. The per-unit cost for most of this tech stuff is approximately zero, and the ones that aren't zero (e.g. semiconductor manufacturing) have significant unit production costs and are not a natural monopoly either. It's also questionable whether even "natural monopolies" would be monopolies absent regulation. It's more efficient to have a single power grid, but if there was no law granting a statutory monopoly to a single provider and the existing provider became abusive, somebody would build a parallel power grid. Because having two would cost twice as much as having one, but that's still less than paying five times as much to an unrestrained monopolist. So the result of unregulated "natural monopoly" still isn't a monopoly, it's just competition which is unusually inefficient.
    - mrep 5y ago
      I would argue it basically is because the high fixed costs are from paying the developers to write and maintain good competitive software and the marginal cost of each new user is basically free. That exactly matches wiki: "A natural monopoly has a high fixed cost for a product that does not depend on output, but its marginal cost of producing one more good is roughly constant, and small."

by nverno 5y ago

djbusby 5y ago

Shouldn't the DOJ not be concerned with the economic impact? Isn't their objective Justice not Economic Prosperity?

nverno 5y ago
In the US, they are concerned with economic impact, they do a whole in-depth economic cost/benefit analysis as part of determining if it's worth breaking up a monopolist. Whatever 'justice' means in this scenario seems highly subjective. If a monopolist was providing by far the best/cheapest goods and services, more people might prefer that scenario to an alternative competitive market with less benefit on average. It's arguably unjust for the government to handicap specific people, but also unjust for others not to feel like they all have a fair shot to capture the market. Any time people, not fate, are in charge of handicapping some people will think they are getting the shaft.
- robbedpeter 5y ago
  That sounds rational, but it's not. There's nobody, public or private sector, nobody at all that can make a real economic assessment of the value of a service line Facebook or Google. Those who claim otherwise are stupid, lying, or selling something. Markets and economics are unpredictable systems that have nothing to do with models of rational actors behaving in their own self interest. They're fundamentally extensions of chaotic biological systems and inherently resistant to oracles as a matter of mathematical reality. What would be rational is if we actually endeavored as a society to make sure everyone is accountable to the same rules to the same degree. By using this magical thinking / cost benefit analysis, we're simply incentivizing victory for the best storytelling middleman.
  - nverno 5y ago
    I think the difficulties/uncertainties you mention here are a large factor in the feds reluctance to break up monopolies. I have no personal opinion on these methods without taking a much deeper dive into the details. It does seem like the big breakup of Ma Bell worked out well, though. The statement "everyone is accountable to the same rules to the same degree" could be either pro- or anti- federal action.

AnthonyMouse 5y ago

> I think it is a safe bet that there will always be new monopolies developing. There are always new markets, and benefits often don't scale linearly with growth. Find a monopoly and you'll probably find a regulation propping it up. For many of these tech companies it's DMCA 1201 and other things that prohibit adversarial interoperability. If you have a law that lets you boot competitors out of adjacent markets once you have dominance in one of them, you take over the other one too. Then nobody can compete with you unless they can replace you in both markets, meanwhile you enter a third. The first thing we need is to get rid of such laws.

MereInterest 5y ago
https://en.wikipedia.org/wiki/Natural_monopoly https://en.wikipedia.org/wiki/Natural_monopoly
- AnthonyMouse 5y ago
  This tech stuff isn't a natural monopoly. The defining characteristic of a natural monopoly is that customer is paying a large amount per unit to cover costs that stay the same no matter the amount of usage. The per-unit cost for most of this tech stuff is approximately zero, and the ones that aren't zero (e.g. semiconductor manufacturing) have significant unit production costs and are not a natural monopoly either. It's also questionable whether even "natural monopolies" would be monopolies absent regulation. It's more efficient to have a single power grid, but if there was no law granting a statutory monopoly to a single provider and the existing provider became abusive, somebody would build a parallel power grid. Because having two would cost twice as much as having one, but that's still less than paying five times as much to an unrestrained monopolist. So the result of unregulated "natural monopoly" still isn't a monopoly, it's just competition which is unusually inefficient.
  - mrep 5y ago
    I would argue it basically is because the high fixed costs are from paying the developers to write and maintain good competitive software and the marginal cost of each new user is basically free. That exactly matches wiki: "A natural monopoly has a high fixed cost for a product that does not depend on output, but its marginal cost of producing one more good is roughly constant, and small."