4 ms·

Sort of playing devil's advocate here, but well run companies with near monopolies have on many occasions provided massive benefits that would not have been pos

by svara 2y ago

Sort of playing devil's advocate here, but well run companies with near monopolies have on many occasions provided massive benefits that would not have been possible at smaller scale. Think of Bell Labs. Google has a number of Bell Labs style projects ongoing that massively benefit scientific research. Transformers, AlphaFold, etc. It's hard to see how a smaller, more focused company would be able to justify that type of R&D. That said, I do see an issue where some of the smartest people get sucked up by big tech. Instead of working on fundamental advances in image processing they end up working on beauty filters for Instagram. That can't be right.

s1artibartfast 2y ago
Why can't that be right? I see the sentiment a lot, but it strikes me as reality denialism. People are willing to pay for one thing but not the other.
- svara 2y ago
  Exactly, it's "just" the market setting the price. The issue is that these are near monopolies, so the market isn't efficient. In other words, if those companies didn't have monopoly power, other businesses (or non-commercial entities) might be able to afford to hire some of these people as well, which might be beneficial overall for innovation. That's the economic argument and it's pretty clean imo. But as far as I'm concerned personally, I would really prefer to live in a world in which smart people work on human flourishing... rather than whatever that is.
  - s1artibartfast 2y ago
    I think that's exactly the point I was getting it. Who decides what efficient is, and what do they measure. You might care about vision algorithms, and I might care about hamburgers. From the economics perspective, something being Monopoly doesn't mean it's inefficient. Depending on the situation, they can be far more efficient then diverse companies, or much less
    - simiones 2y ago
      > From the economics perspective, something being Monopoly doesn't mean it's inefficient. From an economics perspective, if there is a monopoly, there is no free market, so you can't rely on the market for efficiency. A monopoly can be efficient, but it can also be arbitrarily inefficient and still keep its position.
      - s1artibartfast 2y ago
        you are correct and I agree. I was trying to make the point that monopoly isnt defined by inefficiency, either by the technical definition or the colloquial one. Rality is complex, and few monopolies can be arbitrarily inefficient. I think this is where a lot of the public confusion about monopiles comes from. If you have the only grocery store or gas station in town, it might seem like there is a monopoly. There is probably a wide leeway to raise prices or be inefficient, but not without limit or else someone would compete. If Amazon, Google, or whomever 10X'd their prices, competitors would arise.
  - LunaSea 2y ago
    The market is shit at making long term risky bets that require a lot of R&D. That's the reason why quantum computing and projects of this type would not exist if you didn't have behemoth companies with extra cash lying around.
  - animal_spirits 2y ago
    The problem with your ideals is that every one has different ideas on what "human flourishing" looks like. One way or the other, if it is Government that is in charge of "human flourishing", then some group of people are going to benefit at the expense of another group of people, at the discretion of whoever currently has the most political clout.
- rurp 2y ago
  Capital markets don't perfectly account for all positive and negative externalities in the world, not even close. For example think of a company that invents a miracle drug that only costs $1 to produce. The net benefit to humanity would be to open up production and sell it to everyone who needs it for a few bucks, but of course the company will do everything it can to maintain a monopoly and sell the drug for $X0000/dose, even if relatively few people can obtain it. Lawyers and lobbyists will get paid a lot of money to get the second outcome, even though they're producing negative value overall.
  - s1artibartfast 2y ago
    Im not saying they do. I am saying that claims of inefficiency or failure need to be compared to a possible and realistic counterfactual. You might think it is is inefficient to have a miracle cure for cancer tied up on patent for 20 years, but what are you comparing it to.
  - jackcosgrove 2y ago
    > sell the drug for $X0000/dose, even if relatively few people can obtain it A rational company would lower the price if that broadened the market and netted more profit by volume. Drugs aren't Veblen goods. The impetus for jacking up drug prices is that the market is captive, and those who need the drug will obtain it. That and insurance/government is often the payor.
    - edmundsauto 2y ago
      Right, but in some cases volume doesn’t make up for the price drop. Or the source materials are the bottleneck. Even if the societal benefit was greater.
    - simiones 2y ago
      If the drug is needed by 1 million people, selling it for $1 will net you $1 million (let's assume all the 1 million can afford $1). If they instead sell it for $1000 and only 2000 people who need it can afford it, they'll make $2 million, so it's much more economically efficient.
maccard 2y ago
> That said, I do see an issue where some of the smartest people get sucked up by big tech. Instead of working on fundamental advances in image processing they end up working on beauty filters for Instagram. That can't be right. Can't you say the same thing if you go back 80 years and talk about the smartest minds in the world instead of working on energy for the masses they're working on the atomic bomb?
- jmb99 2y ago
  Kind of... but the atomic bomb required progressing multiple fields substantially and resulted in some very important technological improvements that are genuinely good (the most stable non-carbon power generation). What is the possible societal-positive outcome of another social media filter? Or improved ad targeting algorithm? Or more attention-grabbing social media feed?
  - maccard 2y ago
    > What is the possible societal-positive outcome of another social media filter? Or improved ad targeting algorithm? Or more attention-grabbing social media feed? I could have asked the same thing about a weapon of mass destruction 80 years ago. I don't have an answer for how we can use those things in ways to better society. But I'm not convinced that there are _none_.
    - jmb99 2y ago
      It was well known even to the general public in the 1940s that the mechanism behind the nuclear bomb could generate vast amounts of cheap energy. It was known by nuclear scientists in the late 1930s that massive amounts of energy were released upon nuclear decay, and that chain reactions were possible, but that harvesting the energy for power generation would take some time. I don’t believe there is anyone in the general public or who is an expert in any of the aforementioned fields (which have been around for 1-3 decades) that truly believes they are net positives.
makeitdouble 2y ago
> It's hard to see how a smaller, more focused company would be able to justify that type of R&D. Typically that's solved with R&D happening in academia or semi-public space. How much this happens depends on the opportunities to do it in private companies, so entities like Google paying big salaries for R&D probably means we don't see what alternatives they would be if they stopped doing so.
- 0xB31B1B 2y ago
  so who are the academics raising 1b+ dollars to build and operate GPU farms to work on the frontiers of transformer models?
  - makeitdouble 2y ago
    I'd raise you the same question on which private company is spawning its own LHC to research fundamental physics.
    - robertlagrant 2y ago
      Firing particles at each other to disprove the next 500 variants of string theory is nowhere near as useful.
      - FpUser 2y ago
        What a shortsighted comment
- robertlagrant 2y ago
  > Typically that's solved with R&D happening in academia or semi-public space. It was, but not any more. The crazy capital investments often come from private companies as well. And that's not a problem. They're spending their money rather than your money.
  - jmb99 2y ago
snarf21 2y ago
I don't think it would be the company that focused on those Moonshots. The founder types with $Billions get bored and start new things that try these instead.
altpaddle 2y ago
Do you realize what the cost was to society to have a Bell Labs? Telephone service was expensive as hell and you couldn't even own your own telephone. There was no incentive for innovation in many areas like answering machines, cell phones etc

by svara 2y ago

s1artibartfast 2y ago

Why can't that be right? I see the sentiment a lot, but it strikes me as reality denialism. People are willing to pay for one thing but not the other.

svara 2y ago
Exactly, it's "just" the market setting the price. The issue is that these are near monopolies, so the market isn't efficient. In other words, if those companies didn't have monopoly power, other businesses (or non-commercial entities) might be able to afford to hire some of these people as well, which might be beneficial overall for innovation. That's the economic argument and it's pretty clean imo. But as far as I'm concerned personally, I would really prefer to live in a world in which smart people work on human flourishing... rather than whatever that is.
- s1artibartfast 2y ago
  I think that's exactly the point I was getting it. Who decides what efficient is, and what do they measure. You might care about vision algorithms, and I might care about hamburgers. From the economics perspective, something being Monopoly doesn't mean it's inefficient. Depending on the situation, they can be far more efficient then diverse companies, or much less
  - simiones 2y ago
    > From the economics perspective, something being Monopoly doesn't mean it's inefficient. From an economics perspective, if there is a monopoly, there is no free market, so you can't rely on the market for efficiency. A monopoly can be efficient, but it can also be arbitrarily inefficient and still keep its position.
    - s1artibartfast 2y ago
      you are correct and I agree. I was trying to make the point that monopoly isnt defined by inefficiency, either by the technical definition or the colloquial one. Rality is complex, and few monopolies can be arbitrarily inefficient. I think this is where a lot of the public confusion about monopiles comes from. If you have the only grocery store or gas station in town, it might seem like there is a monopoly. There is probably a wide leeway to raise prices or be inefficient, but not without limit or else someone would compete. If Amazon, Google, or whomever 10X'd their prices, competitors would arise.
- LunaSea 2y ago
  The market is shit at making long term risky bets that require a lot of R&D. That's the reason why quantum computing and projects of this type would not exist if you didn't have behemoth companies with extra cash lying around.
- animal_spirits 2y ago
  The problem with your ideals is that every one has different ideas on what "human flourishing" looks like. One way or the other, if it is Government that is in charge of "human flourishing", then some group of people are going to benefit at the expense of another group of people, at the discretion of whoever currently has the most political clout.
rurp 2y ago
Capital markets don't perfectly account for all positive and negative externalities in the world, not even close. For example think of a company that invents a miracle drug that only costs $1 to produce. The net benefit to humanity would be to open up production and sell it to everyone who needs it for a few bucks, but of course the company will do everything it can to maintain a monopoly and sell the drug for $X0000/dose, even if relatively few people can obtain it. Lawyers and lobbyists will get paid a lot of money to get the second outcome, even though they're producing negative value overall.
- s1artibartfast 2y ago
  Im not saying they do. I am saying that claims of inefficiency or failure need to be compared to a possible and realistic counterfactual. You might think it is is inefficient to have a miracle cure for cancer tied up on patent for 20 years, but what are you comparing it to.
- jackcosgrove 2y ago
  > sell the drug for $X0000/dose, even if relatively few people can obtain it A rational company would lower the price if that broadened the market and netted more profit by volume. Drugs aren't Veblen goods. The impetus for jacking up drug prices is that the market is captive, and those who need the drug will obtain it. That and insurance/government is often the payor.
  - edmundsauto 2y ago
    Right, but in some cases volume doesn’t make up for the price drop. Or the source materials are the bottleneck. Even if the societal benefit was greater.
  - simiones 2y ago
    If the drug is needed by 1 million people, selling it for $1 will net you $1 million (let's assume all the 1 million can afford $1). If they instead sell it for $1000 and only 2000 people who need it can afford it, they'll make $2 million, so it's much more economically efficient.

maccard 2y ago

> That said, I do see an issue where some of the smartest people get sucked up by big tech. Instead of working on fundamental advances in image processing they end up working on beauty filters for Instagram. That can't be right. Can't you say the same thing if you go back 80 years and talk about the smartest minds in the world instead of working on energy for the masses they're working on the atomic bomb?

jmb99 2y ago
Kind of... but the atomic bomb required progressing multiple fields substantially and resulted in some very important technological improvements that are genuinely good (the most stable non-carbon power generation). What is the possible societal-positive outcome of another social media filter? Or improved ad targeting algorithm? Or more attention-grabbing social media feed?
- maccard 2y ago
  > What is the possible societal-positive outcome of another social media filter? Or improved ad targeting algorithm? Or more attention-grabbing social media feed? I could have asked the same thing about a weapon of mass destruction 80 years ago. I don't have an answer for how we can use those things in ways to better society. But I'm not convinced that there are _none_.
  - jmb99 2y ago
    It was well known even to the general public in the 1940s that the mechanism behind the nuclear bomb could generate vast amounts of cheap energy. It was known by nuclear scientists in the late 1930s that massive amounts of energy were released upon nuclear decay, and that chain reactions were possible, but that harvesting the energy for power generation would take some time. I don’t believe there is anyone in the general public or who is an expert in any of the aforementioned fields (which have been around for 1-3 decades) that truly believes they are net positives.

makeitdouble 2y ago

> It's hard to see how a smaller, more focused company would be able to justify that type of R&D. Typically that's solved with R&D happening in academia or semi-public space. How much this happens depends on the opportunities to do it in private companies, so entities like Google paying big salaries for R&D probably means we don't see what alternatives they would be if they stopped doing so.

0xB31B1B 2y ago
so who are the academics raising 1b+ dollars to build and operate GPU farms to work on the frontiers of transformer models?
- makeitdouble 2y ago
  I'd raise you the same question on which private company is spawning its own LHC to research fundamental physics.
  - robertlagrant 2y ago
    Firing particles at each other to disprove the next 500 variants of string theory is nowhere near as useful.
    - FpUser 2y ago
      What a shortsighted comment
robertlagrant 2y ago
> Typically that's solved with R&D happening in academia or semi-public space. It was, but not any more. The crazy capital investments often come from private companies as well. And that's not a problem. They're spending their money rather than your money.
- jmb99 2y ago

snarf21 2y ago

I don't think it would be the company that focused on those Moonshots. The founder types with $Billions get bored and start new things that try these instead.

altpaddle 2y ago

Do you realize what the cost was to society to have a Bell Labs? Telephone service was expensive as hell and you couldn't even own your own telephone. There was no incentive for innovation in many areas like answering machines, cell phones etc