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It’s a spectrum not a binary. 1970’s Airline breakups were very beneficial to customers with lower prices and more routes popping up virtually overnight (thoug

It’s a spectrum not a binary. 1970’s Airline breakups were very beneficial to customers with lower prices and more routes popping up virtually overnight (though read “Hard Landing” if you want a more nuanced take), 1980’s AT&T breakup was somewhat beneficial in that long distance and cell rates went down but local rates went up (see “The Deal of the Century”), 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation (“Smartest Guys in the Room”), and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy and set society/customers back decades (“Sale of the Century”/“After the Party”).

maeil 2y ago
That sounds exactly like a binary, as hinted at by a sibling comment: Breakup of a company monopoly (always good for the consumer) vs. Breakup of a government monopoly (potentially bad for the consumer)
- crazygringo 2y ago
  No, because of the part on how local phone rates went up when AT&T was broken up. There's no "always" here, the world is not that simple. Breaking up a large company is often going to be good for some sets of customers, bad for others.
  - luma 2y ago
    In that case, it mostly just created local monopolies. You still didn’t have a choice for local service unless you moved several hundred miles away. From the consumer’s perspective, we just replaced one monopoly with another.
  - josefx 2y ago
    > because of the part on how local phone rates went up when AT&T was broken up. Isn't that caused by the "last mile" problem? Even with the split there was always only one company in control of local infrastructure and from what I understand they could even block newcomers from installing their own, citing concerns over possible service interuptions and various kinds of interference. I think Google Fibre even went through several experimental ways to get its infrastructure in place just so it could avoid dealing with any of that.
jonas21 2y ago
The airlines weren't broken up in the 70s. They were deregulated and allowed to add or remove routes and set fares as they saw fit. Less government oversight in this case turned out to be a good thing for consumers.
- deleted 2y ago
  [deleted]
- paulgerhardt 2y ago
  That’s a literal interpretation, but it misses the point of “Hard Landing”. The book argues that while the airlines weren’t monopolies in name, they acted like a government-sanctioned monopoly under the Civil Aviation Board. The Airline Deregulation Act was essentially meant to break up this cartel, and was pushed through despite heavy resistance from those same airlines. They didn’t want the Civil Aeronautics Board dismantled because it protected their monopolies over routes and guaranteed income, and they feared new entrants would disrupt their control. So, while the airlines weren’t formally ‘broken up,’ the airline business, the route monopolies, and CAB were which directly led to the dissolution of companies like Eastern and Pan Am, and the creation or expansion of new entrants like Frontier, JetBlue, and Southwest which were previously prohibited from competing in these markets.
- jmward01 2y ago
  In the short term? The flying experience is less than miserable now and the costs are going up. I see a lot of articles out there talking about how prices have fallen, but I haven't actually seen the data. The one article that actually cited prices as examples was obviously wrong about those prices, had cherry-picked them or used the laughable quoted prices you see to sucker you into clicking (which then triple as you go through the actual process of getting the ticket). Looking at BTS stats [1] the price appears to be going down somewhat since 1995, but it then goes on to say that the price only covers the base fare, not extras like baggage and the like. We all know by the time you actually fly the cost has gone up considerably. I was forced to pay 150$ for a bag on a recent flight (not even over-weight), that price isn't listed in the base fare anymore but it used to be part of the ticket. Looking at the BTS numbers I see an industry that has had 30 years of technology improvements and customers that aren't seeing that benefit. [1] https://www.bts.gov/air-fares https://www.bts.gov/air-fares (edit) I said 'DOT' when I meant 'BTS' Bureau of transportation Statistics
takeda 2y ago
> and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking That sounds more like due to corruption. Also we are talking about breakups not deregulation.
- ywvcbk 2y ago
  > Also we are talking about breakups not deregulation. In a way they were breakups, in the USSR at least, since all almost all sectors of the economy were fully controlled by government monopolies.
  - ivan_gammel 2y ago
    Not exactly. There was central planning, of course, but it was not one big corporation - it was extremely heavy regulation, basically telling different state-owned businesses what to produce, how much, where to sell it and where to get supplies. This is the reason why after privatization there were many companies in most sectors, not just one big monopoly. They were privatized independently.
    - ywvcbk 2y ago
      Well, yes, they were effectively subsidiaries of that one big corporation. I wouldn’t be surprised at all if some divisions of a a company like Stellantis have significantly more autonomy than any of the car companies in the USSR.
      - ivan_gammel 2y ago
        No, you are wrong, they were not. Centralized strategic planning did exist in USSR between 1930s (end of NEP) and 1950s (death of Stalin). The economic reforms of Kosygin shifted planning to enterprise level and the central planning authority - Gosplan - only coordinated the plans of each enterprise. In the last 30 years of its existence USSR was neither planned nor market economy, but rather something in between. They got incentives wrong, focusing on volume and revenue rather than on quality, innovation and profits.
killingtime74 2y ago
You didn't mention the biggest US breakups, Standard oil, Bell Systems (ATT) and the railways
ekianjo 2y ago
deregulation and breaking monopolies are not the same things though
ivan_gammel 2y ago
>Soviet Union … deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy You literally named one of the most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically advanced in Europe - if they were able to expand to Europe, they would crush it. Agriculture? Changed hands from state to private, productivity and yield increased, pre-war exports are all-time high. Energy? 1990s weren’t great in some republics like Kazakhstan, but having some private companies in the business definitely helped. Not enough is being done on green energy, but that is a different story.
- ywvcbk 2y ago
  > most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically Wasn’t it mostly controlled by foreign banks, though?
  - ivan_gammel 2y ago
    Of course not. You can find the list of top banks yourself. Russia, Ukraine - there are just few of them in the top.
ywvcbk 2y ago
> Soviet Union [..] essential sectors in banking, agriculture, and energy and set society/customers back decades That was pretty much unavoidable though. The old Soviet system and institutions were unsustainable and couldn’t coexist with “capitalist” institutions. There was no banking sector (at least how we understand it) to begin with, any company producing consumer goods, electronics, cars etc. collapsed overnight because they were producing garbage products that nobody needed after foreign substitutes became available. Basically there were only two choices, sell off everything remotely useful to foreign companies and hope that they modernize/fix it or allow the local oligarchs to privatize/steal everything. Arguably the countries that picked the first option came out ahead (but are now stuck with entirely foreign owned banking, telecommunications. Retail sectors with much of their industry either directly foreign owned or incapable of doing anything but subcontracting) e.g. Belarus tried to hold on much longer, instead it got stuck where it was for several decades with little progress. The Baltic countries crashed and were close to societal collapse for a few years but have been on an almost continuous upwards trend since they recovered.
AnthonyMouse 2y ago
> 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation This was basically a regulatory failure. They broke up the energy market on paper but without making it feasible for new entrants to actually enter the market, which is the sine qua non of making this work. So then the incumbents purposely constrained generating capacity to spike the prices.

maeil 2y ago

That sounds exactly like a binary, as hinted at by a sibling comment: Breakup of a company monopoly (always good for the consumer) vs. Breakup of a government monopoly (potentially bad for the consumer)

crazygringo 2y ago
No, because of the part on how local phone rates went up when AT&T was broken up. There's no "always" here, the world is not that simple. Breaking up a large company is often going to be good for some sets of customers, bad for others.
- luma 2y ago
  In that case, it mostly just created local monopolies. You still didn’t have a choice for local service unless you moved several hundred miles away. From the consumer’s perspective, we just replaced one monopoly with another.
- josefx 2y ago
  > because of the part on how local phone rates went up when AT&T was broken up. Isn't that caused by the "last mile" problem? Even with the split there was always only one company in control of local infrastructure and from what I understand they could even block newcomers from installing their own, citing concerns over possible service interuptions and various kinds of interference. I think Google Fibre even went through several experimental ways to get its infrastructure in place just so it could avoid dealing with any of that.

jonas21 2y ago

The airlines weren't broken up in the 70s. They were deregulated and allowed to add or remove routes and set fares as they saw fit. Less government oversight in this case turned out to be a good thing for consumers.

deleted 2y ago
[deleted]
paulgerhardt 2y ago
That’s a literal interpretation, but it misses the point of “Hard Landing”. The book argues that while the airlines weren’t monopolies in name, they acted like a government-sanctioned monopoly under the Civil Aviation Board. The Airline Deregulation Act was essentially meant to break up this cartel, and was pushed through despite heavy resistance from those same airlines. They didn’t want the Civil Aeronautics Board dismantled because it protected their monopolies over routes and guaranteed income, and they feared new entrants would disrupt their control. So, while the airlines weren’t formally ‘broken up,’ the airline business, the route monopolies, and CAB were which directly led to the dissolution of companies like Eastern and Pan Am, and the creation or expansion of new entrants like Frontier, JetBlue, and Southwest which were previously prohibited from competing in these markets.
jmward01 2y ago
In the short term? The flying experience is less than miserable now and the costs are going up. I see a lot of articles out there talking about how prices have fallen, but I haven't actually seen the data. The one article that actually cited prices as examples was obviously wrong about those prices, had cherry-picked them or used the laughable quoted prices you see to sucker you into clicking (which then triple as you go through the actual process of getting the ticket). Looking at BTS stats [1] the price appears to be going down somewhat since 1995, but it then goes on to say that the price only covers the base fare, not extras like baggage and the like. We all know by the time you actually fly the cost has gone up considerably. I was forced to pay 150$ for a bag on a recent flight (not even over-weight), that price isn't listed in the base fare anymore but it used to be part of the ticket. Looking at the BTS numbers I see an industry that has had 30 years of technology improvements and customers that aren't seeing that benefit. [1] https://www.bts.gov/air-fares https://www.bts.gov/air-fares (edit) I said 'DOT' when I meant 'BTS' Bureau of transportation Statistics

takeda 2y ago

> and in a handful of examples like the Soviet Union or South Africa, deregulation lead to outright collapse of essential sectors in banking That sounds more like due to corruption. Also we are talking about breakups not deregulation.

ywvcbk 2y ago
> Also we are talking about breakups not deregulation. In a way they were breakups, in the USSR at least, since all almost all sectors of the economy were fully controlled by government monopolies.
- ivan_gammel 2y ago
  Not exactly. There was central planning, of course, but it was not one big corporation - it was extremely heavy regulation, basically telling different state-owned businesses what to produce, how much, where to sell it and where to get supplies. This is the reason why after privatization there were many companies in most sectors, not just one big monopoly. They were privatized independently.
  - ywvcbk 2y ago
    Well, yes, they were effectively subsidiaries of that one big corporation. I wouldn’t be surprised at all if some divisions of a a company like Stellantis have significantly more autonomy than any of the car companies in the USSR.
    - ivan_gammel 2y ago
      No, you are wrong, they were not. Centralized strategic planning did exist in USSR between 1930s (end of NEP) and 1950s (death of Stalin). The economic reforms of Kosygin shifted planning to enterprise level and the central planning authority - Gosplan - only coordinated the plans of each enterprise. In the last 30 years of its existence USSR was neither planned nor market economy, but rather something in between. They got incentives wrong, focusing on volume and revenue rather than on quality, innovation and profits.

killingtime74 2y ago

You didn't mention the biggest US breakups, Standard oil, Bell Systems (ATT) and the railways

ekianjo 2y ago

deregulation and breaking monopolies are not the same things though

ivan_gammel 2y ago

>Soviet Union … deregulation lead to outright collapse of essential sectors in banking, agriculture, and energy You literally named one of the most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically advanced in Europe - if they were able to expand to Europe, they would crush it. Agriculture? Changed hands from state to private, productivity and yield increased, pre-war exports are all-time high. Energy? 1990s weren’t great in some republics like Kazakhstan, but having some private companies in the business definitely helped. Not enough is being done on green energy, but that is a different story.

ywvcbk 2y ago
> most successful sectors of economy in ex-USSR. Banking sector in most former republics did effectively a greenfield start becoming the most technologically Wasn’t it mostly controlled by foreign banks, though?
- ivan_gammel 2y ago
  Of course not. You can find the list of top banks yourself. Russia, Ukraine - there are just few of them in the top.

ywvcbk 2y ago

> Soviet Union [..] essential sectors in banking, agriculture, and energy and set society/customers back decades That was pretty much unavoidable though. The old Soviet system and institutions were unsustainable and couldn’t coexist with “capitalist” institutions. There was no banking sector (at least how we understand it) to begin with, any company producing consumer goods, electronics, cars etc. collapsed overnight because they were producing garbage products that nobody needed after foreign substitutes became available. Basically there were only two choices, sell off everything remotely useful to foreign companies and hope that they modernize/fix it or allow the local oligarchs to privatize/steal everything. Arguably the countries that picked the first option came out ahead (but are now stuck with entirely foreign owned banking, telecommunications. Retail sectors with much of their industry either directly foreign owned or incapable of doing anything but subcontracting) e.g. Belarus tried to hold on much longer, instead it got stuck where it was for several decades with little progress. The Baltic countries crashed and were close to societal collapse for a few years but have been on an almost continuous upwards trend since they recovered.

AnthonyMouse 2y ago

> 1990’s California Energy breakups were basically a net negative for customers allowing energy market speculation and manipulation This was basically a regulatory failure. They broke up the energy market on paper but without making it feasible for new entrants to actually enter the market, which is the sine qua non of making this work. So then the incumbents purposely constrained generating capacity to spike the prices.