7 ms·

I really want to love this manifesto. This is my one sticking point. Regulatory capture, monopolies, and cartels are the fatal flaw in this techno-optimism, and

I really want to love this manifesto. This is my one sticking point. Regulatory capture, monopolies, and cartels are the fatal flaw in this techno-optimism, and they break everything. Let's say I subscribe to this wonderful story Marc tells. Please tell me the purpose of government if it is not to destroy cartels and monopolies. They are every bit as bad as the government, which is a type of monopoly itself.

nickpp 3y ago
Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. Free markets are naturally resistant through free competition (startups!) and, you know, laws.
- james4k 3y ago
  And how do you think a government reinforcing a monopoly comes to be?
  - nickpp 3y ago
    Countless ways. From sheer governmental incompetence like when regulating the competition out of markets. To simply not understanding second order effects when “helping markets” with patents and humongous copyright terms. To not understanding supply and demand when pressed to fulfill voter promises like when attempting to control and fix prices. To being captive to interest groups that end up controlling a huge chunk of economy like in heath care. But most of all through sheer, pure corruption. Because why else would someone become a politician - a relatively low paid position - if not to be in a position to transform all that power and influence into money, for the highest bidder?
    - james4k 3y ago
      And who are the highest bidders?
      - scubbo 3y ago
        Corporations, in America, where the travesty known as Citizens United exists. (I'm not claiming that other countries don't have money in politics; but America is the one where it is most clearly enshrined with an actual name to the philosophy)
      - nickpp 3y ago
        Incumbents, of course. The ones holding the largest interest in preserving the status-quo and freezing competition. Professional organizations needing power to preserve the barrier of entry. Huge, trans-national Unions. But other power brokers as well. Other politicians with more money. Their own stock holdings. Foreign powers. Well moneyed interest groups. Ideological organizations siphoning old money. Occasionally even the scrappy start-up trying to game the system. These usually fail, see SBF - but they are not saints either. There is no shortage in interests vying to corrupt politicians. Somehow they never mind and always succumb.
- winphone1974 3y ago
  Any capital intensive project can become a resistant monopoly for the first mover, who then manipulates pricing to prevent competition.
  - nickpp 3y ago
    > who then manipulates pricing to prevent competition How exactly? Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. To create a monopoly you need to restrict competition some other way, like through governmental regulation.
    - spiralx 3y ago
      > Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. Only if you ignore the concept of loss leaders, or the very act of competing in the market itself by undercutting competitors' prices. Companies are very happy to receive less money in the short term in exchange for guaranteed recurring revenue in the long term, it's only rational after all, and applies as much to a yearly subscription being cheaper than 12 individual monthly subscriptions as it does to established companies accepting reduced revenue in the short term to guarantee their share of the market in the long term. This is all pretty obvious from a basic understanding of how companies work TBH.
      - nickpp 3y ago
        Loss leaders, price dumping and price wars are as old as the world and free markets are perfectly capable to deal with them. Here's how how Dow Chemical fought the German bromine cartel's price dumping at the beginning of the last century: https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_monopoly https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m... No government intervention necessary.
- lmm 3y ago
  > Free markets are naturally resistant through free competition That's circular logic. Free markets are defined as those in which competition happens. Unregulated markets often tend towards cartelization and monopoly. > and, you know, laws. Which need to be enforced by governments. > Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. The whole robber baron era is a counterexample - the likes of Standard Oil getting broken up by the goverment. Market competition is powerful but it only works when the government is actively enforcing a competitive market, which there is sadly little enthusiasm for lately.
  - nickpp 3y ago
    Nobody said anything about not having governments. Rule of Law is required for societies to even exist. Read some more on the robber baron era - you'll find out Standard Oil was already losing to competition before government action. For another great example how the free market broke a cartel, read up on how Dow Chemical fought the German bromine cartel: https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_monopoly https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m... No government intervention necessary.
    - lmm 3y ago
      > Nobody said anything about not having governments. That's very clearly where you're going with this though. > Point me to a resistant monopoly or cartel and I will show you a government granted/supported one.
      - nickpp 3y ago
        Please don't put words in my mouth. Government's role in a free market economy is quite essential: upholding rule of law (specifically contract law) and taxing externalities. Overreach is the problem though (like regulating the charging port on my damn phone).
- TheDong 3y ago
  > Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. Microsoft famously made deals with laptop vendors to prevent Dell, HP, and so on from selling computers with any operating system other than Windows: https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows Similarly, Intel stifled AMD by providing financial incentives to vendors who offered no AMD-based products: https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v.... Were those government supported monopolistic behaviors? Does the "free market" mean that a competitor could have simply made one company that produced an entire laptop, OS, and CPU from scratch to provide the consumer a cheaper choice? Why would the "free market" lead to vibrant competition, rather than monopolistic hoarding of power?
  - nickpp 3y ago
    Government's action did had zero effect against Microsoft. Slap on the wrist. Their monopoly was naturally made irrelevant by the market moving onto the next tech frontier: mobile & cloud. The free market lead to that. Countless startups trying everything under the sun made sure incumbents like Apple or Google had to innovate, acquire and evolve to avoid Microsoft's fate. In a free market there is always a chance a new startup will spring up and upend the order. Tons of VC money are continuously trying exactly that.
    - kalleboo 3y ago
      The only reason that mobile went the way it did was because Microsoft was so afraid of government Antitrust action that they let Apple survive
      - nickpp 3y ago
        Apple survived thanks to Steve Jobs and Steve Jobs alone. He could've built his vision in any company or startup though, when he took over Apple was a few weeks away from bankruptcy.
scyzoryk_xyz 3y ago
Isn't that them speaking from multiple sides of the mouth? It's a manifesto by... venture capitalists. They have a very specific and diverse audience that they want to read this. I mean, there is not going to be any low-interest capital flowing in to fuel all these techno-optimist ideals if the start-ups can't later be acquired by the existing monopolies.

nickpp 3y ago

Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. Free markets are naturally resistant through free competition (startups!) and, you know, laws.

james4k 3y ago
And how do you think a government reinforcing a monopoly comes to be?
- nickpp 3y ago
  Countless ways. From sheer governmental incompetence like when regulating the competition out of markets. To simply not understanding second order effects when “helping markets” with patents and humongous copyright terms. To not understanding supply and demand when pressed to fulfill voter promises like when attempting to control and fix prices. To being captive to interest groups that end up controlling a huge chunk of economy like in heath care. But most of all through sheer, pure corruption. Because why else would someone become a politician - a relatively low paid position - if not to be in a position to transform all that power and influence into money, for the highest bidder?
  - james4k 3y ago
    And who are the highest bidders?
    - scubbo 3y ago
      Corporations, in America, where the travesty known as Citizens United exists. (I'm not claiming that other countries don't have money in politics; but America is the one where it is most clearly enshrined with an actual name to the philosophy)
    - nickpp 3y ago
      Incumbents, of course. The ones holding the largest interest in preserving the status-quo and freezing competition. Professional organizations needing power to preserve the barrier of entry. Huge, trans-national Unions. But other power brokers as well. Other politicians with more money. Their own stock holdings. Foreign powers. Well moneyed interest groups. Ideological organizations siphoning old money. Occasionally even the scrappy start-up trying to game the system. These usually fail, see SBF - but they are not saints either. There is no shortage in interests vying to corrupt politicians. Somehow they never mind and always succumb.
winphone1974 3y ago
Any capital intensive project can become a resistant monopoly for the first mover, who then manipulates pricing to prevent competition.
- nickpp 3y ago
  > who then manipulates pricing to prevent competition How exactly? Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. To create a monopoly you need to restrict competition some other way, like through governmental regulation.
  - spiralx 3y ago
    > Reducing profits defeats the purpose of becoming a monopoly, while any sliver of profit is the startup's opportunity. Only if you ignore the concept of loss leaders, or the very act of competing in the market itself by undercutting competitors' prices. Companies are very happy to receive less money in the short term in exchange for guaranteed recurring revenue in the long term, it's only rational after all, and applies as much to a yearly subscription being cheaper than 12 individual monthly subscriptions as it does to established companies accepting reduced revenue in the short term to guarantee their share of the market in the long term. This is all pretty obvious from a basic understanding of how companies work TBH.
    - nickpp 3y ago
      Loss leaders, price dumping and price wars are as old as the world and free markets are perfectly capable to deal with them. Here's how how Dow Chemical fought the German bromine cartel's price dumping at the beginning of the last century: https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_monopoly https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m... No government intervention necessary.
lmm 3y ago
> Free markets are naturally resistant through free competition That's circular logic. Free markets are defined as those in which competition happens. Unregulated markets often tend towards cartelization and monopoly. > and, you know, laws. Which need to be enforced by governments. > Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. The whole robber baron era is a counterexample - the likes of Standard Oil getting broken up by the goverment. Market competition is powerful but it only works when the government is actively enforcing a competitive market, which there is sadly little enthusiasm for lately.
- nickpp 3y ago
  Nobody said anything about not having governments. Rule of Law is required for societies to even exist. Read some more on the robber baron era - you'll find out Standard Oil was already losing to competition before government action. For another great example how the free market broke a cartel, read up on how Dow Chemical fought the German bromine cartel: https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_monopoly https://en.wikipedia.org/wiki/Herbert_Henry_Dow#Breaking_a_m... No government intervention necessary.
  - lmm 3y ago
    > Nobody said anything about not having governments. That's very clearly where you're going with this though. > Point me to a resistant monopoly or cartel and I will show you a government granted/supported one.
    - nickpp 3y ago
      Please don't put words in my mouth. Government's role in a free market economy is quite essential: upholding rule of law (specifically contract law) and taxing externalities. Overreach is the problem though (like regulating the charging port on my damn phone).
TheDong 3y ago
> Point me to a resistant monopoly or cartel and I will show you a government granted/supported one. Microsoft famously made deals with laptop vendors to prevent Dell, HP, and so on from selling computers with any operating system other than Windows: https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows https://en.wikipedia.org/wiki/Bundling_of_Microsoft_Windows Similarly, Intel stifled AMD by providing financial incentives to vendors who offered no AMD-based products: https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v._Intel_Corp https://en.wikipedia.org/wiki/Advanced_Micro_Devices,_Inc._v.... Were those government supported monopolistic behaviors? Does the "free market" mean that a competitor could have simply made one company that produced an entire laptop, OS, and CPU from scratch to provide the consumer a cheaper choice? Why would the "free market" lead to vibrant competition, rather than monopolistic hoarding of power?
- nickpp 3y ago
  Government's action did had zero effect against Microsoft. Slap on the wrist. Their monopoly was naturally made irrelevant by the market moving onto the next tech frontier: mobile & cloud. The free market lead to that. Countless startups trying everything under the sun made sure incumbents like Apple or Google had to innovate, acquire and evolve to avoid Microsoft's fate. In a free market there is always a chance a new startup will spring up and upend the order. Tons of VC money are continuously trying exactly that.
  - kalleboo 3y ago
    The only reason that mobile went the way it did was because Microsoft was so afraid of government Antitrust action that they let Apple survive
    - nickpp 3y ago
      Apple survived thanks to Steve Jobs and Steve Jobs alone. He could've built his vision in any company or startup though, when he took over Apple was a few weeks away from bankruptcy.

scyzoryk_xyz 3y ago

Isn't that them speaking from multiple sides of the mouth? It's a manifesto by... venture capitalists. They have a very specific and diverse audience that they want to read this. I mean, there is not going to be any low-interest capital flowing in to fuel all these techno-optimist ideals if the start-ups can't later be acquired by the existing monopolies.