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> The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers. There are hundr

> The counterargument is that this only happens in markets with high barriers to entry, which in turn are mostly caused by regulatory barriers. There are hundreds of entire industries that have gigantic barriers to entry no matter what the regulations are. Covering the country in cell towers, building fleets of container ships, designing an operating systems and full suite of applications — these things aren't cheap

AnthonyMouse 5y ago
That's only because you're defining the market as "has an entire fleet of container ships," which is just assuming the existence of a consolidated industry. Each container ship could be its own entity and then you just need marketplaces for people to hire them to ship things. You don't have to build a national cellular network, you can put up one tower and then sell service to a market of MVNOs which buy service from different tower providers in different regions. Every piece of an operating system doesn't have to be built by the same entity. See Linux. For that matter, see macOS, which is full of BSD code written by many separate entities.
- OkayPhysicist 5y ago
  You're grossly underestimating transaction costs. It is vastly preferrable from a company's perspective to be able to make 1 deal with 1 company that has many ships, as opposed to many deals woth many companies that have 1 ship each. Reducing that cost ends up looking like Uber, where you've just moved your monopoly point to the controller of the marketplace. Each individual deal an entity makes takes time and money.
  - AnthonyMouse 5y ago
    The transaction costs problem is when you have 100,000 ships and 100,000 customers and it becomes ten billion individual relationships. You do solve this with things like Uber, but such things don't themselves have to be a monopoly, because you don't have to make it 100,000:1, you can make it 100,000:20 and have twenty competing marketplaces but still not an explosively large number of separate relationships. This works even better with federated marketplaces. There are a lot of problems with the international banking system, but the general idea that someone in New York can make a wire transfer to someone in London even though they each use a different bank is based on protocols rather than a single centralized world monopoly bank, and in that respect is better than the more centralized alternative.
- agentdrtran 5y ago
  > which is just assuming the existence of a consolidated industry. Well, consolidated industries currently exist, and they don't take too kindly to competition.
  - AnthonyMouse 5y ago
    What I mean is, it assumes the industry has to operate as it does when consolidated, i.e. that the market can only exist as conglomerates with fleets of container ships and not individual container ships shipping freight as separate entities. It's like saying the trucking market has high barriers to entry because you have to buy a fleet of trucks, which only billionaires can afford, and individual owner operators are impossible. Obviously not.

AnthonyMouse 5y ago

That's only because you're defining the market as "has an entire fleet of container ships," which is just assuming the existence of a consolidated industry. Each container ship could be its own entity and then you just need marketplaces for people to hire them to ship things. You don't have to build a national cellular network, you can put up one tower and then sell service to a market of MVNOs which buy service from different tower providers in different regions. Every piece of an operating system doesn't have to be built by the same entity. See Linux. For that matter, see macOS, which is full of BSD code written by many separate entities.

OkayPhysicist 5y ago
You're grossly underestimating transaction costs. It is vastly preferrable from a company's perspective to be able to make 1 deal with 1 company that has many ships, as opposed to many deals woth many companies that have 1 ship each. Reducing that cost ends up looking like Uber, where you've just moved your monopoly point to the controller of the marketplace. Each individual deal an entity makes takes time and money.
- AnthonyMouse 5y ago
  The transaction costs problem is when you have 100,000 ships and 100,000 customers and it becomes ten billion individual relationships. You do solve this with things like Uber, but such things don't themselves have to be a monopoly, because you don't have to make it 100,000:1, you can make it 100,000:20 and have twenty competing marketplaces but still not an explosively large number of separate relationships. This works even better with federated marketplaces. There are a lot of problems with the international banking system, but the general idea that someone in New York can make a wire transfer to someone in London even though they each use a different bank is based on protocols rather than a single centralized world monopoly bank, and in that respect is better than the more centralized alternative.
agentdrtran 5y ago
> which is just assuming the existence of a consolidated industry. Well, consolidated industries currently exist, and they don't take too kindly to competition.
- AnthonyMouse 5y ago
  What I mean is, it assumes the industry has to operate as it does when consolidated, i.e. that the market can only exist as conglomerates with fleets of container ships and not individual container ships shipping freight as separate entities. It's like saying the trucking market has high barriers to entry because you have to buy a fleet of trucks, which only billionaires can afford, and individual owner operators are impossible. Obviously not.