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Free markets like to make money for capital holders, and tend towards a monopoly or oligopoly as that maximizes profit extraction. Name a free market where the

Free markets like to make money for capital holders, and tend towards a monopoly or oligopoly as that maximizes profit extraction. Name a free market where there is an economy of scale and network effect, which does not tend towards monopoly or oligopoly. More fundamentally, if (say) Germany wants to move all of its government operations off of US-based IT, should it wait until the market has provided a solution? Or should it do like all governments have always done, and change the marketplace? Nor is this unique to governments. Some of my clients require me to agree to their ethical practices, like "no child labor." They are using their purchasing power to change the marketplace. Why do the countries with higher taxes and government regulations and policies over health care have better overall health outcomes than those with lower taxes and regulations? There is a demand for clean beaches. Where is the free market for pollution control?

mike_hearn 2y ago
The topic we're discussing would seem to undermine your claim, as cloud is neither a monopoly nor an oligopoly despite having scale and network effects.
- eesmith 2y ago
  Could you explain then how so many European governments ended up one of a handful of US clouds (Amazon, Microsoft and Google)? Almost reason I can think of comes down to scaling or network effects. I say "almost" because I've thought of a couple more: - it's already a Microsoft shop and it's hard to change? Lock-in effect. - you never get fired for choosing IBM, err, AWS? I don't have a name for this effect, though it seems related to scaling. Note that "monopoly" does not mean there is only a single provider. "De Beers controlled 80% to 85% of rough diamond distribution and was considered a monopoly" during the 20th century. https://en.wikipedia.org/wiki/De_Beers https://en.wikipedia.org/wiki/De_Beers This is because I'm using the legal definition of monopoly, not the economics one. From https://en.wikipedia.org/wiki/Monopoly https://en.wikipedia.org/wiki/Monopoly > In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with unfair price raises.
  - mike_hearn 2y ago
    Because those companies: 1. Invested massively. In the case of Microsoft and Google, ahead of demand. 2. Have lots of developers already familiar with their stacks, especially Microsoft via Windows and .NET which are mainstays of nearly all European non-tech businesses. 3. Indeed, have lots of "never get fired" effect; the word you're looking for is brand equity. Especially the case with non-technical execs already familiar with their consumer products, and it's often non-technical execs who make the decisions about which brand they're going with. Everyone knows MS Office and likes it, everyone knows Amazon and buys from it, everyone knows Google and searches with it. Their products work well, so their clouds must also work well. In government especially the decisions are always non technical so this matters a lot. Monopoly does actually mean only a single provider: that's the definition and your Wikipedia link opens by stating exactly that in its first sentence. Sometimes the term is stretched or abused by governments. That happens because everyone across the political spectrum agrees to anti-trust laws in principle, and then the left can use them as a stick to beat companies with if only they can twist the definition of monopoly far enough. This so-called legal definition isn't a definition at all, it's a purely political construct which is why it includes ambiguous terms like significant, unfair, overly high etc. Even using this non-definition though, cloud providers don't qualify. They're actually famous for not raising prices. Raising prices a lot on existing customers is a typical sign that a company has significant market power.
    - eesmith 2y ago
      "Invested massively" because the could get scaling advantages. Both companies built off of existing OS and ad tech monopolies which should have been regulated long ago. "Lots of developers already familiar with their stacks" is a network effect. > Monopoly does actually mean only a single provider Is a tomato a fruit? I was very clear to give my definition of "monopoly", to include "oligarchy" for those who wanted to be picky, to point to how others describe De Beers as a "monopoly", consistent with my use, and to show how even the Wikipedia page on "monopoly" is not disagreeing with me. You'll note that same Wikipedia page for "monopoly" lists De Beers and Standard Oil as monopolies, when they were not sole providers of diamonds or petroleum, respectively. > They're actually famous for not raising prices. Right. You are using Bork's 1970s influential re-orientation of monopoly power away from general anti-competitive behavior to focus only on "consumer welfare". I agree with Lina Khan (starting with "Amazon's Antitrust Paradox") and others, who argue that Bork's standard is too narrow. Or, to use your terms, Bork's right-wing viewpoints twisted established law to allow abusive behavior by powerful companies, so long as consumer pricing was not affected. V.P. Vance likes Khan because he wants the right to use the stick to beat companies which don't support the right. This is only possible because all of the big tech companies already abuse their market power, because Bork gave them the freedom to do so. > This so-called legal definition isn't a definition at all, it's a purely political construct All laws are political constructs. What is "ownership"? Do you own the water which falls on the land you own? What is a "reasonable search"? What is "cruel and unusual punishment"?

mike_hearn 2y ago

The topic we're discussing would seem to undermine your claim, as cloud is neither a monopoly nor an oligopoly despite having scale and network effects.

eesmith 2y ago
Could you explain then how so many European governments ended up one of a handful of US clouds (Amazon, Microsoft and Google)? Almost reason I can think of comes down to scaling or network effects. I say "almost" because I've thought of a couple more: - it's already a Microsoft shop and it's hard to change? Lock-in effect. - you never get fired for choosing IBM, err, AWS? I don't have a name for this effect, though it seems related to scaling. Note that "monopoly" does not mean there is only a single provider. "De Beers controlled 80% to 85% of rough diamond distribution and was considered a monopoly" during the 20th century. https://en.wikipedia.org/wiki/De_Beers https://en.wikipedia.org/wiki/De_Beers This is because I'm using the legal definition of monopoly, not the economics one. From https://en.wikipedia.org/wiki/Monopoly https://en.wikipedia.org/wiki/Monopoly > In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power to charge overly high prices, which is associated with unfair price raises.
- mike_hearn 2y ago
  Because those companies: 1. Invested massively. In the case of Microsoft and Google, ahead of demand. 2. Have lots of developers already familiar with their stacks, especially Microsoft via Windows and .NET which are mainstays of nearly all European non-tech businesses. 3. Indeed, have lots of "never get fired" effect; the word you're looking for is brand equity. Especially the case with non-technical execs already familiar with their consumer products, and it's often non-technical execs who make the decisions about which brand they're going with. Everyone knows MS Office and likes it, everyone knows Amazon and buys from it, everyone knows Google and searches with it. Their products work well, so their clouds must also work well. In government especially the decisions are always non technical so this matters a lot. Monopoly does actually mean only a single provider: that's the definition and your Wikipedia link opens by stating exactly that in its first sentence. Sometimes the term is stretched or abused by governments. That happens because everyone across the political spectrum agrees to anti-trust laws in principle, and then the left can use them as a stick to beat companies with if only they can twist the definition of monopoly far enough. This so-called legal definition isn't a definition at all, it's a purely political construct which is why it includes ambiguous terms like significant, unfair, overly high etc. Even using this non-definition though, cloud providers don't qualify. They're actually famous for not raising prices. Raising prices a lot on existing customers is a typical sign that a company has significant market power.
  - eesmith 2y ago
    "Invested massively" because the could get scaling advantages. Both companies built off of existing OS and ad tech monopolies which should have been regulated long ago. "Lots of developers already familiar with their stacks" is a network effect. > Monopoly does actually mean only a single provider Is a tomato a fruit? I was very clear to give my definition of "monopoly", to include "oligarchy" for those who wanted to be picky, to point to how others describe De Beers as a "monopoly", consistent with my use, and to show how even the Wikipedia page on "monopoly" is not disagreeing with me. You'll note that same Wikipedia page for "monopoly" lists De Beers and Standard Oil as monopolies, when they were not sole providers of diamonds or petroleum, respectively. > They're actually famous for not raising prices. Right. You are using Bork's 1970s influential re-orientation of monopoly power away from general anti-competitive behavior to focus only on "consumer welfare". I agree with Lina Khan (starting with "Amazon's Antitrust Paradox") and others, who argue that Bork's standard is too narrow. Or, to use your terms, Bork's right-wing viewpoints twisted established law to allow abusive behavior by powerful companies, so long as consumer pricing was not affected. V.P. Vance likes Khan because he wants the right to use the stick to beat companies which don't support the right. This is only possible because all of the big tech companies already abuse their market power, because Bork gave them the freedom to do so. > This so-called legal definition isn't a definition at all, it's a purely political construct All laws are political constructs. What is "ownership"? Do you own the water which falls on the land you own? What is a "reasonable search"? What is "cruel and unusual punishment"?