4 ms·

There is no market incentive for this to be the steady state. All companies only want to pay lip service to competition, but in reality, they do everything in t

There is no market incentive for this to be the steady state. All companies only want to pay lip service to competition, but in reality, they do everything in their power to prevent competition and monopolize the market. Product tie-ins, lock-ins, exclusive contracts, etc. For your vision to be a reality there needs to be significant tax on monopolies and no company should be allowed to become a trillion dollar company. Taxes & Regulations FTW.

genewitch 2y ago
I'm actually shocked no one is arguing with you about your first two sentences. Capitalism will always have one lucky or unscrupulous company after another swallowing the smaller players. you have 5 equal companies producing widgets. One of the companies has their building near a freeway, and one day a fully loaded truck crashes through a railing and impacts their building, causing a fire and lots of damage. Sure, they have insurance or whatever, but that company's customers don't care about that, they needed those widgets this week. Luckily one of the other four companies has them in stock and they can fill their order elsewhere. That company they filled the order with now has more capital, perhaps they hire a new employee or buy additional tools or machines. Now they can out-compete the other four, for whatever reason, QC, price, etc. The former company might be unable to keep up with the 3+1 other companies on the same playing field, so may sell to one of the other four, but only the latter company in the above example may have the money available to buy. This is all simplified and nitpicking what i am saying is futile, because the point is - it doesn't matter how many companies are competing, nothing is in equilibrium, and this doesn't even get in to active sabotage or espionage. A lucky company will buy an unlucky company. Eventually you'll end up with 3 or fewer companies when there used to be dozens or even hundreds. The end goal of a company is to be like Samsung, General Electric, Sony, etc - make everything, sell everything, own everything. A company being lucky for a few quarters even gets to spend money lobbying for preferential regulations that prevent further competitors from entering the market! I don't have a solution, because there is a compelling argument to be made for huge companies being able to provide superior quality, price, whatever because of scales of economy, and it just takes one bright lawyer at a multinational to say "but if you break us up it will accelerate climate change because of x, y, z issues we have solved by fact of owning everything!" Limiting personal wealth to 10-100 million dollars, even "on paper", might prevent this, but that would require global cooperation. I think the upside that things would gradually become more affordable would be a good selling point - if all companies are operating with the understanding the shareholders, owners, etc have a hard ceiling on how much value they can extract from the endeavor...
- DEADMINCE 2y ago
  The solution is pretty easy - put caps on various types of growth/income/profit for corporations.
- pompino 2y ago
  I don't think social or economic ideologies can exist in isolation. I think its a constant push/pull between different versions, interpretations and combinations of them, interacting, evolving, changing all the time. Some of it driven by the state apparatus, some by emergent group behavior and/or public sentiment via the participants in the local and global economy. It could just be my uneducated brain but I've always had a nagging feeling that all of this (macro-level economics and polices/programs) is a lot of hot-air and people just hand-waving exceptions away to push their own agenda.
- AnthonyMouse 2y ago
  > The former company might be unable to keep up with the 3+1 other companies on the same playing field, so may sell to one of the other four, but only the latter company in the above example may have the money available to buy. Your assumption is that companies can be destroyed but not created, which isn't true. The way prevent monopolies, then, is to make it as easy as possible to create new companies. There is no monopoly if five new companies are created for every two the incumbent buys or destroys. > Limiting personal wealth to 10-100 million dollars, even "on paper", might prevent this This has really nothing to do with it. Google is a public company. It could easily be just as big without any single individual owning more than $10M in shares.
  - genewitch 2y ago
    i mentioned that: > A company being lucky for a few quarters even gets to spend money lobbying for preferential regulations that prevent further competitors from entering the market! and i disagree that a company can get as big as google if everyone involved was wealthcapped at $10mm. There'd be no real reason to seek ever-higher profits, especially if every company was forced to abide these rules. as an aside, isn't it weird that during the high fuel prices in the last 4 years the fuel producing companies have made record profits? I don't actually think it's weird. It is telling. I bet it's supply and demand, though.
AnthonyMouse 2y ago
> There is no market incentive for this to be the steady state. The market incentive is that everyone other than the monopolist will want to take the monopolist's market share. The monopolist, in turn, captures the government and uses "Taxes & Regulations" to ensure that random small businesses can't enter the market and take their market share.
- pompino 2y ago
  Yes, because money == power, and lobbying is legal. If you had progressive taxation that would essentially prevent any entity from acquiring power to rival the state. The inherent weakness of democracies is that they require constant care and attention. If you look away for a second, there is going to be some corporation trying to re-write the tax code or do away with regulations.
  - AnthonyMouse 2y ago
    > If you had progressive taxation that would essentially prevent any entity from acquiring power to rival the state. We have progressive taxation. That doesn't matter because fixed costs are fixed. If it costs $30,000/year to live, someone who makes $30,000/year will accumulate no wealth even if you tax them at 0%, because all of their income is going to food and rent and utilities. Whereas someone who makes a billion dollars a year will accumulate wealth even if you tax them at 90%, because the remaining 10% is still a hundred million dollars and after you subtract out $30,000, or even $250,000, there is still nearly the entire hundred million dollars left. Then that hundred million dollars collects interest every year going forward. Trying to use taxation also ignores that the problem isn't actually billionaires. Corporations have more money than any individual, but the largest ones are publicly traded, so that would still be the case even if no individual shareholder had a lot of wealth. Because the corporation would, and its executives would thereby be in control of those resources and use them to capture the government. It also ignores that you don't have to be a single entity to capture the government. For example, many professional licensing requirements purposely take a long time to satisfy (e.g. multi-year apprenticeship requirements) to create barriers to entering those trades. Not because General Electric wants to limit the supply of electricians, but because local electricians do, and together they represent a significant voting block. Landlords and homeowners capture zoning boards to inhibit housing construction, not because any of them individually have a monopoly, but because they all want housing prices to go up at the expense of people outside the local jurisdiction who have been priced out of the local area by the zoning restrictions and thereby don't get a vote. > If you look away for a second, there is going to be some corporation trying to re-write the tax code or do away with regulations. Why is it that the largest corporations and most corrupt organizations are the ones asking for regulations? DMCA 1201 wasn't enacted out of popular demand. The National Association of Realtors hasn't been lobbying to relax zoning rules. The telcos are the ones who want those laws prohibiting anybody from competing with them. Certificate of Need laws don't exist for the benefit of the public. Corrupt regulations don't exist because of oversized corporations, oversized corporations exist because of corrupt regulations. If the megacorps didn't exist, all it would take is for some small organization with contacts to a powerful legislator to get something snuck into a bill, and soon the small organization is a megacorp with the power to keep those laws on the books. There were no trillion dollar corporations in 1913 or 1791, but there was Congress, so we don't have to wonder which came first. What you need is to constrain the legislators from passing those laws to begin with, regardless of whether they start off at the behest of a billionaire or a trade organization or just the Senator's brother-in-law.

genewitch 2y ago

I'm actually shocked no one is arguing with you about your first two sentences. Capitalism will always have one lucky or unscrupulous company after another swallowing the smaller players. you have 5 equal companies producing widgets. One of the companies has their building near a freeway, and one day a fully loaded truck crashes through a railing and impacts their building, causing a fire and lots of damage. Sure, they have insurance or whatever, but that company's customers don't care about that, they needed those widgets this week. Luckily one of the other four companies has them in stock and they can fill their order elsewhere. That company they filled the order with now has more capital, perhaps they hire a new employee or buy additional tools or machines. Now they can out-compete the other four, for whatever reason, QC, price, etc. The former company might be unable to keep up with the 3+1 other companies on the same playing field, so may sell to one of the other four, but only the latter company in the above example may have the money available to buy. This is all simplified and nitpicking what i am saying is futile, because the point is - it doesn't matter how many companies are competing, nothing is in equilibrium, and this doesn't even get in to active sabotage or espionage. A lucky company will buy an unlucky company. Eventually you'll end up with 3 or fewer companies when there used to be dozens or even hundreds. The end goal of a company is to be like Samsung, General Electric, Sony, etc - make everything, sell everything, own everything. A company being lucky for a few quarters even gets to spend money lobbying for preferential regulations that prevent further competitors from entering the market! I don't have a solution, because there is a compelling argument to be made for huge companies being able to provide superior quality, price, whatever because of scales of economy, and it just takes one bright lawyer at a multinational to say "but if you break us up it will accelerate climate change because of x, y, z issues we have solved by fact of owning everything!" Limiting personal wealth to 10-100 million dollars, even "on paper", might prevent this, but that would require global cooperation. I think the upside that things would gradually become more affordable would be a good selling point - if all companies are operating with the understanding the shareholders, owners, etc have a hard ceiling on how much value they can extract from the endeavor...

DEADMINCE 2y ago
The solution is pretty easy - put caps on various types of growth/income/profit for corporations.
pompino 2y ago
I don't think social or economic ideologies can exist in isolation. I think its a constant push/pull between different versions, interpretations and combinations of them, interacting, evolving, changing all the time. Some of it driven by the state apparatus, some by emergent group behavior and/or public sentiment via the participants in the local and global economy. It could just be my uneducated brain but I've always had a nagging feeling that all of this (macro-level economics and polices/programs) is a lot of hot-air and people just hand-waving exceptions away to push their own agenda.
AnthonyMouse 2y ago
> The former company might be unable to keep up with the 3+1 other companies on the same playing field, so may sell to one of the other four, but only the latter company in the above example may have the money available to buy. Your assumption is that companies can be destroyed but not created, which isn't true. The way prevent monopolies, then, is to make it as easy as possible to create new companies. There is no monopoly if five new companies are created for every two the incumbent buys or destroys. > Limiting personal wealth to 10-100 million dollars, even "on paper", might prevent this This has really nothing to do with it. Google is a public company. It could easily be just as big without any single individual owning more than $10M in shares.
- genewitch 2y ago
  i mentioned that: > A company being lucky for a few quarters even gets to spend money lobbying for preferential regulations that prevent further competitors from entering the market! and i disagree that a company can get as big as google if everyone involved was wealthcapped at $10mm. There'd be no real reason to seek ever-higher profits, especially if every company was forced to abide these rules. as an aside, isn't it weird that during the high fuel prices in the last 4 years the fuel producing companies have made record profits? I don't actually think it's weird. It is telling. I bet it's supply and demand, though.

AnthonyMouse 2y ago

> There is no market incentive for this to be the steady state. The market incentive is that everyone other than the monopolist will want to take the monopolist's market share. The monopolist, in turn, captures the government and uses "Taxes & Regulations" to ensure that random small businesses can't enter the market and take their market share.

pompino 2y ago
Yes, because money == power, and lobbying is legal. If you had progressive taxation that would essentially prevent any entity from acquiring power to rival the state. The inherent weakness of democracies is that they require constant care and attention. If you look away for a second, there is going to be some corporation trying to re-write the tax code or do away with regulations.
- AnthonyMouse 2y ago
  > If you had progressive taxation that would essentially prevent any entity from acquiring power to rival the state. We have progressive taxation. That doesn't matter because fixed costs are fixed. If it costs $30,000/year to live, someone who makes $30,000/year will accumulate no wealth even if you tax them at 0%, because all of their income is going to food and rent and utilities. Whereas someone who makes a billion dollars a year will accumulate wealth even if you tax them at 90%, because the remaining 10% is still a hundred million dollars and after you subtract out $30,000, or even $250,000, there is still nearly the entire hundred million dollars left. Then that hundred million dollars collects interest every year going forward. Trying to use taxation also ignores that the problem isn't actually billionaires. Corporations have more money than any individual, but the largest ones are publicly traded, so that would still be the case even if no individual shareholder had a lot of wealth. Because the corporation would, and its executives would thereby be in control of those resources and use them to capture the government. It also ignores that you don't have to be a single entity to capture the government. For example, many professional licensing requirements purposely take a long time to satisfy (e.g. multi-year apprenticeship requirements) to create barriers to entering those trades. Not because General Electric wants to limit the supply of electricians, but because local electricians do, and together they represent a significant voting block. Landlords and homeowners capture zoning boards to inhibit housing construction, not because any of them individually have a monopoly, but because they all want housing prices to go up at the expense of people outside the local jurisdiction who have been priced out of the local area by the zoning restrictions and thereby don't get a vote. > If you look away for a second, there is going to be some corporation trying to re-write the tax code or do away with regulations. Why is it that the largest corporations and most corrupt organizations are the ones asking for regulations? DMCA 1201 wasn't enacted out of popular demand. The National Association of Realtors hasn't been lobbying to relax zoning rules. The telcos are the ones who want those laws prohibiting anybody from competing with them. Certificate of Need laws don't exist for the benefit of the public. Corrupt regulations don't exist because of oversized corporations, oversized corporations exist because of corrupt regulations. If the megacorps didn't exist, all it would take is for some small organization with contacts to a powerful legislator to get something snuck into a bill, and soon the small organization is a megacorp with the power to keep those laws on the books. There were no trillion dollar corporations in 1913 or 1791, but there was Congress, so we don't have to wonder which came first. What you need is to constrain the legislators from passing those laws to begin with, regardless of whether they start off at the behest of a billionaire or a trade organization or just the Senator's brother-in-law.