5 ms·

I read his book "Zero to One" and I felt like it did learn good things from it, for example that "competition is for losers". Before I thought capitalism was al

by mjfl 5y ago

I read his book "Zero to One" and I felt like it did learn good things from it, for example that "competition is for losers". Before I thought capitalism was all about competition, but maybe I was a rube in not knowing that.

harshreality 5y ago
Buffett's "good businesses have moats" is roughly equivalent.
- randomsearch 5y ago
  "Saying you like “moats” is just a nice way of saying you like oligopolies" - Musk
clairity 5y ago
sure, information has many channels and routes into our brains, so that's not unusual or a criticism of how you learned that bit of information. but the idea that you try to avoid competition is straight from a first-year strategy course at any business school, in which this has been taught for at least the last 5 decades, if not much longer. capitalism, the ideal, puts competition on a pedestal, as a broad mechanism to ensure profit margins gets squeezed out of markets as they mature (that is, as risk stabilizes, the risk premium does as well). capitalists don't want their profit margins minimized, so they employ as many mechanisms as they can get their greedy hands on to minimize competition. capitalists are literally anti-competitive. capitalism is not.
Barrin92 5y ago
You weren't a rube at all, that view of capitalism as being characterized by competitive markets is popular and the result of Milton Friedman style ideas being almost propagandized from the 80s onward. His points in the book however do basically go back to Schumpeter who argued the same thing. That oligopolistic markets in which outsized firms earn excess profits, are significantly more dynamic than overly competitive market economies.
- zozbot234 5y ago
  The economic definition of competition, beyond its simplest variety, allows for natural "moats" and differentiated firms. Looking for a "moat" is just engaging in competition on a larger scale than that of a single product - and the "excess" returns involved are ultimately a reward for good positioning. (Of course artificially-created 'moats' are a form of rent seeking and should be eliminated via antitrust regulation, but this can take some time.)

by mjfl 5y ago

harshreality 5y ago

Buffett's "good businesses have moats" is roughly equivalent.

randomsearch 5y ago
"Saying you like “moats” is just a nice way of saying you like oligopolies" - Musk

clairity 5y ago

sure, information has many channels and routes into our brains, so that's not unusual or a criticism of how you learned that bit of information. but the idea that you try to avoid competition is straight from a first-year strategy course at any business school, in which this has been taught for at least the last 5 decades, if not much longer. capitalism, the ideal, puts competition on a pedestal, as a broad mechanism to ensure profit margins gets squeezed out of markets as they mature (that is, as risk stabilizes, the risk premium does as well). capitalists don't want their profit margins minimized, so they employ as many mechanisms as they can get their greedy hands on to minimize competition. capitalists are literally anti-competitive. capitalism is not.

Barrin92 5y ago

You weren't a rube at all, that view of capitalism as being characterized by competitive markets is popular and the result of Milton Friedman style ideas being almost propagandized from the 80s onward. His points in the book however do basically go back to Schumpeter who argued the same thing. That oligopolistic markets in which outsized firms earn excess profits, are significantly more dynamic than overly competitive market economies.

zozbot234 5y ago
The economic definition of competition, beyond its simplest variety, allows for natural "moats" and differentiated firms. Looking for a "moat" is just engaging in competition on a larger scale than that of a single product - and the "excess" returns involved are ultimately a reward for good positioning. (Of course artificially-created 'moats' are a form of rent seeking and should be eliminated via antitrust regulation, but this can take some time.)