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This is an excellent post. I think the competition idea works at the level of a country if people by and large play by the rules (a big if). It does not work

This is an excellent post. I think the competition idea works at the level of a country if people by and large play by the rules (a big if). It does not work at the level of macro economics. If you (as a country) insist on competition and absence of mega corps in your country while a country next to you subsidizes mega corps that outcompete your smaller companies - you will lose. Thus in a world of competition, every country will strive to get nuclear weapons to be able to compete militarily and then given that we're human, we will have conflict sooner or later and it will result in nuclear holocaust. If you think fair enough but nuclear holocaust is just the price we pay and it's worth it to continue doing competition, then alright. I don't think it's worth it, so there needs to be a fundamental re-think how we approach these problems. --- Regarding wealth inequality specifically - I agree with Aristotle who made the distinction of Aristocracy vs Oligarchy. Aristocracy being the rule of the few for the common interest and Oligarchy being rule of the few for the interest of the rulers. Somebody will rule, it's the intention and overall direction that matters. I'm not sure that just re-distributing wealth addresses the problem - it does strike me as something an Aristocracy would surely do if one were to appear, so that much is well and good.

AnthonyMouse 2y ago
> If you (as a country) insist on competition and absence of mega corps in your country while a country next to you subsidizes mega corps that outcompete your smaller companies - you will lose. The assumption here is that megacorps are a competitive advantage. Let's look at a counterexample. Suppose solar manufacturing is a growth industry. China wants to dominate it, so they subsidize it. Is there now a single megacorp in China that makes all the solar panels? No, it's a competitive industry there, but because of the subsidies that industry outcompetes the industries in other countries, with the result that China as a whole makes 80% of the world's solar panels. Others can't compete because of the subsidies, not because of a monopolist. Or, after the subsidies have existed for long enough, because the whole supply chain ends up in that country and other countries don't have the local knowledge or infrastructure to even do it anymore. So that kind of subsidization is a problem, but it's a different problem and "you need your own megacorps" is no solution. Now let's go back to Oracle. How is it that they make so much money? The premise of copyright is you get a temporary monopoly in exchange for creating something and that allows you to recover your costs. Originally this was 14 years; it's not so temporary anymore. Also, the premise was that you sell a copy and get money and then if you want more money you need to create more works. How does Oracle actually work? They don't sell you a copy, they sell you a license. The law allowing this was a choice, and a bad one. Having a monopoly isn't illegal under the antitrust laws; abusing one is. But doing that with the copyright monopoly is largely ignored, which is what license terms more restrictive than the copyright statue do. So instead of buying some database software for a one-time fee and then being able to use it as long as you're satisfied with that version of it, you get a temporary license that expires if you stop paying a recurring fee. Meanwhile your data is now in a proprietary database with high costs to extricate it, so you're locked in. Is Oracle then out-competing all of their smaller competitors? Not really. Tons of people use Postgres or MariaDB or SQLite, and there are several other proprietary databases as well. But Oracle still gets to stick it to all the organizations that are locked in to Oracle, because the industry lobbied for laws that allow them to. And then you also see Oracle sticking it to organizations in e.g. Europe. Is that because Oracle's size allows them to outcompete smaller companies this time? No, the same competitors are still there, it's because Europe has similar laws that allow the company screw their customers in similar ways, instead of limiting copyright to the selling of copies. By contrast, if you look at something like Visa and Mastercard, that's a major duopoly in the US. And those cards are accepted in many other countries, but they often have competitors there, when those countries have laws that facilitate competition. Because the companies get big by laws that thwart competition, but when that's their advantage, the advantage doesn't stick where those laws don't exist. If anything it puts them at a disadvantage because being insulated from competitive pressure domestically makes them unresponsive and inefficient. Which is why corporations are always lobbying to have the laws that prop up their concentrated markets enshrined into international treaties. > Somebody will rule This is the assumption most in need of being challenged. "There must be a king" is a fallacy. There will either be a king, or there will be a population of people dedicated to preventing anyone from establishing a throne. The latter is what you get from a system of well-devised checks and balances, one of which is competitive markets. Emphasis on competitive.
- alexashka 2y ago
  I think it'd be helpful to stick with just the military example. (Your comments re Oracle are well taken and I agree) I don't think you've tackled the problem of if we're playing competition and they build nukes, we need to build nukes. It's a zero sum game and the result is nuclear holocaust. Do you disagree with the premise and if not, what is your proposed solution? Regarding there must be a king - I think it'd be helpful if you could summarize your political stance in a few short sentences. I'm worried that we'll be hopelessly lost discussing minutia otherwise. ps. I've been here a while and always been a fan of your comments :)
  - AnthonyMouse 2y ago
    I don't think nukes are a valid analogy. With literal nukes, if they build them and you don't, you get conquered because you have to surrender or be vaporized. So the US needs to have literal nukes and then so do Russia and China and members of the EU, at which point nobody uses them because of MAD. Megacorps don't work like that. The premise that they did would be something like, Android. Google has 90% market share in search and makes their money from cloud services and ads. They give away Android for free and then tie it to their services through the network effect of the Play Store and remote attestation. Competition for mobile operating systems is thereby destroyed because to compete with Android you'd have to compete with something free while overcoming a strong network effect, and if you somehow started to then Google has billions of dollars to pour into Android to make sure you can't succeed. Therefore their only competition is from Apple, another megacorp. How is your local market for competing operating systems supposed to thrive in this environment? You're screwed. But you're not vaporized, you're still allowed to have your own laws. So suppose you're the EU, or you're the US and Google is hypothetically a foreign company, but you want to respond in a way other than just getting your own megacorp. You would have stronger antitrust laws. Contracts to enforce the business models of these companies would be totally unenforceable in your jurisdiction. App store can't be tied to the device or the use of any other services, remote attestation is forbidden because it prevents the user's bank app from working on a competing device, etc. Absolutely no respect in the law for any attempt to enforce vertical integration. Copyright laws that require source code to be distributed to the customer with any software, to aid in reverse engineering and adversarial interoperability. Violations have penalties with teeth, like invalidating the company's patents and copyrights. Then the small competitors in your jurisdiction have a chance. Someone can make an Android fork that can use any app in the Play Store and fund development by auctioning off the defaults for search engine or cloud services. Android forks which are actually developed as open source instead of just having the code thrown over the wall start to become popular there, and support multiple app stores which also start to become popular. Once they build enough of a network effect, people outside your jurisdiction start to use them. Meanwhile the people in the other jurisdiction(s) still beleaguered by the oligopoly start to look at your market with jealousy and erode support for the status quo there too. Why do you think Apple is so intent on fighting the Digital Markets Act? It's not a perfect law by any means but the thing it's attempting to do is valid and if it succeeds, Apple is going to have more competition, which they're worried about precisely because it's a thing that could actually happen. > Regarding there must be a king - I think it'd be helpful if you could summarize your political stance in a few short sentences. I'm worried that we'll be hopelessly lost discussing minutia otherwise. There is always going to be a government, or something that acts like one. To prevent there from being a king, the government has to do two things: 1) Prevent competing governments from forming (of which monopolies or highly concentrated markets are an instance) and 2) Not Be a Tyrant. The first one in terms of markets is a set of rules that keep market barriers to entry low and prohibit monopolistic practices etc. The second is a set of checks and balances within the government that constrain the thing with a monopoly on violence from itself being used for empire building or private advantage. Designing this well is, obviously, hard, but nevertheless it's the thing to do. > I've been here a while and always been a fan of your comments I spend too much time here. https://xkcd.com/386/ https://xkcd.com/386/

AnthonyMouse 2y ago

> If you (as a country) insist on competition and absence of mega corps in your country while a country next to you subsidizes mega corps that outcompete your smaller companies - you will lose. The assumption here is that megacorps are a competitive advantage. Let's look at a counterexample. Suppose solar manufacturing is a growth industry. China wants to dominate it, so they subsidize it. Is there now a single megacorp in China that makes all the solar panels? No, it's a competitive industry there, but because of the subsidies that industry outcompetes the industries in other countries, with the result that China as a whole makes 80% of the world's solar panels. Others can't compete because of the subsidies, not because of a monopolist. Or, after the subsidies have existed for long enough, because the whole supply chain ends up in that country and other countries don't have the local knowledge or infrastructure to even do it anymore. So that kind of subsidization is a problem, but it's a different problem and "you need your own megacorps" is no solution. Now let's go back to Oracle. How is it that they make so much money? The premise of copyright is you get a temporary monopoly in exchange for creating something and that allows you to recover your costs. Originally this was 14 years; it's not so temporary anymore. Also, the premise was that you sell a copy and get money and then if you want more money you need to create more works. How does Oracle actually work? They don't sell you a copy, they sell you a license. The law allowing this was a choice, and a bad one. Having a monopoly isn't illegal under the antitrust laws; abusing one is. But doing that with the copyright monopoly is largely ignored, which is what license terms more restrictive than the copyright statue do. So instead of buying some database software for a one-time fee and then being able to use it as long as you're satisfied with that version of it, you get a temporary license that expires if you stop paying a recurring fee. Meanwhile your data is now in a proprietary database with high costs to extricate it, so you're locked in. Is Oracle then out-competing all of their smaller competitors? Not really. Tons of people use Postgres or MariaDB or SQLite, and there are several other proprietary databases as well. But Oracle still gets to stick it to all the organizations that are locked in to Oracle, because the industry lobbied for laws that allow them to. And then you also see Oracle sticking it to organizations in e.g. Europe. Is that because Oracle's size allows them to outcompete smaller companies this time? No, the same competitors are still there, it's because Europe has similar laws that allow the company screw their customers in similar ways, instead of limiting copyright to the selling of copies. By contrast, if you look at something like Visa and Mastercard, that's a major duopoly in the US. And those cards are accepted in many other countries, but they often have competitors there, when those countries have laws that facilitate competition. Because the companies get big by laws that thwart competition, but when that's their advantage, the advantage doesn't stick where those laws don't exist. If anything it puts them at a disadvantage because being insulated from competitive pressure domestically makes them unresponsive and inefficient. Which is why corporations are always lobbying to have the laws that prop up their concentrated markets enshrined into international treaties. > Somebody will rule This is the assumption most in need of being challenged. "There must be a king" is a fallacy. There will either be a king, or there will be a population of people dedicated to preventing anyone from establishing a throne. The latter is what you get from a system of well-devised checks and balances, one of which is competitive markets. Emphasis on competitive.

alexashka 2y ago
I think it'd be helpful to stick with just the military example. (Your comments re Oracle are well taken and I agree) I don't think you've tackled the problem of if we're playing competition and they build nukes, we need to build nukes. It's a zero sum game and the result is nuclear holocaust. Do you disagree with the premise and if not, what is your proposed solution? Regarding there must be a king - I think it'd be helpful if you could summarize your political stance in a few short sentences. I'm worried that we'll be hopelessly lost discussing minutia otherwise. ps. I've been here a while and always been a fan of your comments :)
- AnthonyMouse 2y ago
  I don't think nukes are a valid analogy. With literal nukes, if they build them and you don't, you get conquered because you have to surrender or be vaporized. So the US needs to have literal nukes and then so do Russia and China and members of the EU, at which point nobody uses them because of MAD. Megacorps don't work like that. The premise that they did would be something like, Android. Google has 90% market share in search and makes their money from cloud services and ads. They give away Android for free and then tie it to their services through the network effect of the Play Store and remote attestation. Competition for mobile operating systems is thereby destroyed because to compete with Android you'd have to compete with something free while overcoming a strong network effect, and if you somehow started to then Google has billions of dollars to pour into Android to make sure you can't succeed. Therefore their only competition is from Apple, another megacorp. How is your local market for competing operating systems supposed to thrive in this environment? You're screwed. But you're not vaporized, you're still allowed to have your own laws. So suppose you're the EU, or you're the US and Google is hypothetically a foreign company, but you want to respond in a way other than just getting your own megacorp. You would have stronger antitrust laws. Contracts to enforce the business models of these companies would be totally unenforceable in your jurisdiction. App store can't be tied to the device or the use of any other services, remote attestation is forbidden because it prevents the user's bank app from working on a competing device, etc. Absolutely no respect in the law for any attempt to enforce vertical integration. Copyright laws that require source code to be distributed to the customer with any software, to aid in reverse engineering and adversarial interoperability. Violations have penalties with teeth, like invalidating the company's patents and copyrights. Then the small competitors in your jurisdiction have a chance. Someone can make an Android fork that can use any app in the Play Store and fund development by auctioning off the defaults for search engine or cloud services. Android forks which are actually developed as open source instead of just having the code thrown over the wall start to become popular there, and support multiple app stores which also start to become popular. Once they build enough of a network effect, people outside your jurisdiction start to use them. Meanwhile the people in the other jurisdiction(s) still beleaguered by the oligopoly start to look at your market with jealousy and erode support for the status quo there too. Why do you think Apple is so intent on fighting the Digital Markets Act? It's not a perfect law by any means but the thing it's attempting to do is valid and if it succeeds, Apple is going to have more competition, which they're worried about precisely because it's a thing that could actually happen. > Regarding there must be a king - I think it'd be helpful if you could summarize your political stance in a few short sentences. I'm worried that we'll be hopelessly lost discussing minutia otherwise. There is always going to be a government, or something that acts like one. To prevent there from being a king, the government has to do two things: 1) Prevent competing governments from forming (of which monopolies or highly concentrated markets are an instance) and 2) Not Be a Tyrant. The first one in terms of markets is a set of rules that keep market barriers to entry low and prohibit monopolistic practices etc. The second is a set of checks and balances within the government that constrain the thing with a monopoly on violence from itself being used for empire building or private advantage. Designing this well is, obviously, hard, but nevertheless it's the thing to do. > I've been here a while and always been a fan of your comments I spend too much time here. https://xkcd.com/386/ https://xkcd.com/386/