14 ms·

Great post, thought-provoking. Highly recommended. Interestingly, in the past, the US federal government actively made efforts to keep private organizations fr

• rangestransform 1y ago
  - What if Google didn't have more money than god, and couldn't afford to bankroll Waymo ~10b? - Would TSMC have gotten as far if Apple couldn't reliably buy out months of capacity on the next node, bankrolling TSMC's tech development? - Would we even have >10B-param LLMs at all? There is something to be said for the concentration of resources, such that they can be deployed on projects with payoffs years or decades later. The same could be said for all the tech that came out of Bell Labs or PARC. Advocating for smaller businesses is advocating for shorttermism to some degree; even startups today are funded based on the premise that they could potentially capture an entire market in a few years.
  • thewebguyd 1y ago
    Large projects need resources, but who decides how those resources are deployed, to what end, and who benefits from them is the important part. All of your examples are profit-driven, and not necessarily (even if we do benefit) done for the greater good of all or advancement of society. We can still accomplish big innovations without those innovations coming from, or being controlled, by nation-state private companies. We've ran high-risk R&D projects successfully before as public projects - Manhattan project, the space race & moon landing, ARPANET, etc. Waymo could still happen, only it'd be a publicly funded project and the societal benefit would be broader and not tied to a single company's market dominance.
    • aleph_minus_one 1y ago
      > We can still accomplish big innovations without those innovations coming from, or being controlled, by nation-state private companies. We've ran high-risk R&D projects successfully before as public projects - Manhattan project, the space race & moon landing, ARPANET, etc. So you prefer nation-state nations over nation-state private companies. :-)
      • mstipetic 1y ago
        Yes of course
      • ghaff 1y ago
        Though two of your examples (not really Manhattan Project) had very significant private sector participants.
        • thewebguyd 1y ago
          I think that's unavoidable, but also not a bad thing. If we were to undertake any similar large scale public projects today, it would also have significant private sector participation. But, that drives job creation and positive effects on the economy (i.e., new deal). The main difference is, ideally, the project was voted on by the public, and is being steered as such. A public-private collaboration, with the public driving it rather than it being entirely the domain of a single private entity for their own profit.
  • dingnuts 1y ago
    I'm not convinced LLMs are a net positive. They've been compared to railroads. Show me the new commerce brought about by LLM trains.
  • raincole 1y ago
    Quite a lot of people don't want TSMC, Waymo and LLMs. They want a job market where one single breadwinner can support their house, spouse and kids. Is it a naive way to view the world? Yes. But it resonates with people more than "ChatGPT is going to replace you."
    • bluGill 1y ago
      They say that, but when you point out that they could have that if they accept a lower standard of living they lose interest (and if possiple downvote or otherwise try to shout you down)
      • radlad 1y ago
        I think the problem is that you are proposing a false dichotomy: that if they do not want one consequence of the current system, they should eschew the entire system. But in actuality, I like some parts of how society is organized, and dislike some other parts. I don't want to leave society - I want society to be better.
        • lotsofpulp 1y ago
          Except this is impossible: >They want a job market where one single breadwinner can support their house, spouse and kids If society also wants women to be able to have the same income earning opportunities as men and hence have financial freedom. Animals compete and compare themselves to others, and so everywhere, dual earning households will outcompete single earning households, and so most market participants will be incentivized to be dual earning households.
          • radlad 1y ago
            First of all, I don't know where this specific example is coming from or how it relates to what I said exactly. Secondly, when you look at the distribution of wealth in the US, and realize that the top 50% of Americans own 97.5% of the wealth, or that the top 1% owns over 30% of the country's wealth, or read a headline about Elon Musk's $1T pay package, conversations about "dual-earning families" versus "single-earning families" look kind of inconsequential.
  • prasadjoglekar 1y ago
    Sure, as long as they're not too big to fail. Those big banks should've gone bankrupt in 2008. They didn't because the taxpayer backstopped it. That is precisely the moral hazard we're now living with. Become so big that you can't fail and can't be disciplined.
  • afiori 1y ago
    Then at worst progress on those would be slower. At best we would have less monopolistic global powers trying to rent us everyone of our freedoms
  • cs702 1y ago
    Great response. Yes, in some cases concentration may be desirable. However, I'm not persuaded it was necessary in the specific cases you mention: * Waymo: EVs were repeatedly killed by corporations highly in concentrated industries that would suffer disruption by EVs: https://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F https://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F * TSMC: Wouldn't we all be better off if the entire world weren't so dependent on a single company, located in a such a geopolitically sensitive territory? * 10B-param LLMs: Wouldn't it have happened regardless, once everyone realized that increasing the scale of early models like GPT-2 and GPT-3 was key to improving performance? I'd add that the model that launched the deep learning craze (AlexNet) and the model that launched the LLM craze and (the Transformer) were developed by tiny teams on the cheap.
    • chermi 1y ago
      "Wouldn't it have happened regardless, once everyone realized that increasing the scale of early models like GPT-2 and GPT-3 was key to improving performance?" Notice how it was massive private spending that uncovered the power of scale in the first place. Would've been hard to say, get a federal grant for that. Would've probably happened gradually, with some gains from moderate scale justifying slightly larger grants for successively larger scale. As for TSMC, the counterfactual assumes such technology would've happened regardless. Just because technology seems to happen inevitably, doesn't make it so. We have evidence of one approach (private) giving incredible results. And also some examples of public (in wartime) giving incredible results. I don't know the evidence for peacetime public incredible results. Maybe warpspeed?
      • cs702 1y ago
        The cost of developing GPT-2 and GPT-3 was on the order of millions of dollars, well within the budget of most tech organizations. See https://arxiv.org/abs/2005.14165 https://arxiv.org/abs/2005.14165 for the total compute invested in them. OpenAI had raised only a few tens of millions in donations at the time, as a non-profit organization. The increase in performance of computation has been happening for so many decades now that it's been given names like "Moore's Law." People like Hans Moravec predicted way back in the 1980's that the cost of compute would continue to decline and become cheap enough for AGI by the 2020's or 2030's. That's half a century ago!
  • Tade0 1y ago
    > - Would TSMC have gotten as far if Apple couldn't reliably buy out months of capacity on the next node, bankrolling TSMC's tech development? TSMC would have had other customers. And if not them, then e.g. Samsung or Intel would have something to offer. Sure, without this investment the pace of development wouldn't be as fast, but are chips from e.g. a decade ago already utterly useless? Of course not. Life would be largely the same, only somewhat slower. Perhaps without hardware updates we would finally start thinking long and hard about performance optimisations?
  • fmbb 1y ago
    Reading your first three bullet points I thought you were dreaming about how much better the world could have been. But your main paragraph following them reads to me like you want Waymo, a powerful TSMC, and huge LLMs. If there is one thing concentrating power and wealth does it is preferring shorttermism. Growth in the next quarter trumps anything else. Humanity’s ecological niche is suffering long term. Civilization suffers as wealth inequality increases (which concentration of power makes happen).
  • deleted 1y ago
    [deleted]
  • biophysboy 1y ago
    Bell labs also sat on a lot of tech that didn't align w/ their business
  • badpun 1y ago
    All those things could still happen if private enterprises pooled their resources and did R&D together. This is already routinely happening in the car industry, where companies band together to develop new engines, to make the R&D expense hurt less.
  • deelowe 1y ago
    I would gladly accept a bit of a slow down on progress if it meant my contributions to society were more meaningful. Additionally, I strongly believe this continuous dwindling of small organizations has resulted in an overall loss of community and a sense of belonging. In my opinion, this is what's causing the overall decline in health that we're seeing in developed nations. For many, life seems aimless. Your future is to simply contribute what you're told to some faceless multinational for which after 20 years your only recognition will be a small piece of canvas with a mass produced screen printed design.
  • latexr 1y ago
    All of the things you mentioned serve the primary purpose of making the rich and powerful more rich and powerful, not improving the lives of the majority. We could live without self-driving cars, and most of the world still does; faster chips are nice but not revolutionary when we’re using them to waste away watching six hours of ten seconds disinformation videos a day; LLMs are literally telling people to eat glue, convincing people to kill themselves, making cocky ignorant assholes more sure of themselves, and increasing the spread of lies and misinformation. Humanity would probably benefit from moving slower, not faster.
    • astrange 1y ago
      Much of the world has, and our part of the world had, self-driving cars called horses. > LLMs are literally telling people to eat glue That's because Google forced theirs to summarize its search results and search results don't work anymore because we only have one website left.
    • rangestransform 1y ago
      They all fulfill individual desires better than the next best alternative, and that's reason enough to have anything
      • latexr 1y ago
        > and that's reason enough to have anything I very much is not. That logic could be used to justify just about anything, from slavery to littering. You don’t live in a world populated by just yourself, there are people around you affected by your actions. Be respectful and mindful that what you do affects others. And yourself as well, even if you don’t immediately see it.
  • jayd16 1y ago
    I'm really not sure the answer to any of these is "we would be worse off", let alone would someone be able to raise the funds. Did we have more telecom innovation when Bell was huge or after that?
  • PaulHoule 1y ago
    Probably the best statement for "biggering up", at least in the case of Africa, was made in a recent editorial in The Economist https://www.economist.com/special-report/2025/01/06/africa-has-too-many-businesses-too-little-business https://www.economist.com/special-report/2025/01/06/africa-h... https://archive.ph/j5CJY https://archive.ph/j5CJY
  • tempestn 1y ago
    That's sort of the problem, right? Large organizations have become dominant precisely because of reasons like this, and there are indeed huge benefits. But if the hypothesis is correct that the crowding out of smaller organizations is fraying the fabric of society, that's a pretty significant drawback.
  • balamatom 1y ago
    >- Would we even have >10B-param LLMs at all? Would anyone even be calling for those, if their core purpose wasn't to facilitate the concentration of capital?
  • avmich 1y ago
    I would compare "larger businesses" with "socialistic planning system" while "smaller businesses" with "free market economy". There are examples when centralized planning got good results - NASA's Apollo project is an example. There are also examples when market economy - eventually, in the long term, not short - prevailed: the Cold War is an example here. It's also quite possible the analogy is flawed though.
    • bluecheese452 1y ago
      It is also very hard to separate “socialist planning system” from “Russian Empire”. It isn’t like things were going swimmingly in Tsarist Russia and then they reentered a golden age in the 90s. If anything this socialist system brought them to the height of their power and influence.
      • astrange 1y ago
        Much of that was due to foreign aid and lend-lease from the US. Of course, we also destroyed Russia and made it an oligarchy by giving them bad advice ("shock therapy") after it collapsed. Like basically everything else (including the existence of Facebook) this is Larry Summers' fault.
      • avmich 1y ago
        "Socialist planning system" can also be - approximately, of course - compared to modern, 2020-s Russia, and modern China (PRC, not Taiwan). The renaissance of economy by the end of 1990-s was significantly assisted by moving towards "free market economy". I would argue that "socialist planning system" had its successes, but in the long run didn't survive the competition, at least in the case of the USSR.
  • rpcope1 1y ago
    You ask your questions rhetorically as though the answer would be bad if they didn't. None of those really have had a profound good impact on the population at large and it's not clear that they're all that truly impactful in a good way to the population at large. I think we wouldn't notice or care by and large, and it's just because some nerd somewhere is excited for next product is not a good reason for centraliZation.
    • mgfist 1y ago
      Have you ridden in a Waymo? I'd sell my car if/when they become ubiquitous enough.
      • Sharlin 1y ago
        Self-driving EVs are not a solution to most of the externalities of personal automobiles. No means of transport is that requires twenty square meters of space and 2000 kg of matter to move 1.4 persons at a time on average. It’s not even clear as of now whether they have a net positive effect on the society, even if they ever become viable in climates that aren’t always sunny.
        • mgfist 1y ago
          > Self-driving EVs are not a solution to most of the externalities of personal automobiles. Why do you think self-driving cars are meant to solve automobile externalities? I don't view them in that way. I view them as solving personal problems with driving - attention, safety, comfort, utilization rate, cost, etc.. > It’s not even clear as of now whether they have a net positive effect on the society Why not? Personal automobiles have a utilization rate of around 5%. If Waymo can get that to even 40% that means you can reduce the number of vehicles by 8x (let's be conservative and say 4x to account for potentially higher use of them a la Jevon's Paradox). They're also infinitely safer and it's likely that they'll get to the point where there are no automobile related deaths. They'll replace the likes of Uber and taxis which have been known to be sources of assaults and other crimes. They'll unlock other opportunities too but regardless of how conservative you want to be with their effects, if they roll out to the point where one can forgo buying a personal automobile, it's very very hard to argue it won't be a huge net positive to society. I bet your reason against it is that you believe something like trains and metros and bikes are better. And to an extent they are, I live in a city and prefer to ride the metro when I can. But it's pure hopium thinking they can ever fully obviate cars.
  • kranke155 1y ago
    Not a single one of those projects is preferable to a more equitable society. Maybe self driving, yes, but the impact of AI is highly dubious and uncertain at this point in time.
  • ckemere 1y ago
    I think the key problem with this idea is taught in basic Microeconomics. A competitive market should have zero profit. The choice of the government to allow a non competitive market is a choice to transfer consumer surplus to producers, which is effectively a tax-by-regulatory choice. So the counter argument to “what about Bell Labs” would be that the democratically elected government (in theory) can more efficiently gather that tax and pay for research. Recognizing counter arguments about effective allocation of resources to useful research. But also recognizing that much R&D goes to future profits for the company rather than just societal benefit.
  • bigstrat2003 1y ago
    It's not clear to me that anything of value would have been lost in this counterfactual world.
  • panick21_ 1y ago
    Self Driving cars are very much unproven, and without google people would still be working on them. And so far its not clear that this investment was worth it. TSMC had many costumers willing to buy new chips. But I agree, sometimes, larger companies very much do make sense.
  • bccdee 1y ago
    You're talking about large-scale hyperexpensive infrastructure research projects with uncertain payouts, which is something that the state already excels at. Public grants are responsible for bankrolling an enormous amount of the research that gets done, and infrastructure projects are money-sinks with a very long timescale. I don't really see how this is an argument functions in favour of big corporations and against big government.
  • aiven 1y ago
    * assuming that we actually need all these technological advancements
• thevillagechief 1y ago
  This is also just a consequence of globalization. A small company cannot compete globally, which means less power for the US government abroad. So it's not in the interest of the US government to break up Apple or Google or Microsoft. Look at how both the US and China can just bully Europe.
  • ako 1y ago
    Agreed, and that is why big countries should also be broken up. No more countries over 50m citizens. Many people in Europe don’t want the EU, but there’s really no alternative when competing with large countries like China and US.
    • ezst 1y ago
      > Many people in Europe don't want the EU Those things Americans say about the rest of the world...
      • ux266478 1y ago
        Nothing of what you quoted is incorrect.
        • ezst 1y ago
          You are the best kind of correct since "many" can refer to some large number that is also insignificant. The pro-European sentiment is vastly dominant, though, and that's what matters.
      • ako 1y ago
        Who is the American here? I’m from the Netherlands, very much pro-eu, but also see lots of people complaining.
    • ShizuhaAki 1y ago
      [dead]
  • 1y ago
• fragmede 1y ago
  The Bell breakup was stupid. If you have some competing companies, but they meet up, and agree to divide the country into regions, and then choose to not compete with each other, that's not at all free market capitalism. Capitalism requires competition in the market in order for market forces to actually work! Cars is another example where, in the modern framing, the dealership model is bullshit and manufacturers should be able to sell direct to consumers. And it does make a certain amount of sense. But if the argument is for smaller organizations, the fact is that local dealerships are smaller than, say, Ford, and so if the argument is that the dealership model sucks because the car dealerships have too much power and are abusing it, taking power away from them and ceeding it to an even bigger organization doesn't make a lick of sense.
• jmyeet 1y ago
  > The Bell system was broken up, resulting in a geographically distributed telecom network For the record, this system where AT&T was broken up between long distance and regional local companies (called the Regional Bell Operating Companies or RBOCs) was a terrible solution to anticompetitive behavior and is one of many examples (some of which you also quote) about how the US is terrible at breaking up monopolies. The problem is the RBOCs simply became regional monopolies and regional monopolies aren't really any better than national monopolies. By the 90s the RBOCs could become long distance providers by meeting certain criteria and of course the whole system was gamed. What needed to happen is the exact same thing that needs to happen with national ISPs today: municipalities need to own, maintain and build last-mile infrastructure.
• Karrot_Kream 1y ago
  > Interestingly, in the past, the US federal government actively made efforts to keep private organizations from becoming too dominant. Yes but one can't just ignore the federal government itself, as if this wasn't an organization. In this framing of small organizations kept small by the government the largest organization is the State. Indeed in this framing the State's job is to control other organizations. While a democratic state is different than a private organization in that it derives legitimacy from its voters, I'd be hard pressed to say that the state is sufficiently different from any other large organization. We can certainly see this now in the US in highly polarized times where the State bears opposition from half the country depending on who is in power. I think this "anti-monopoly" framing is a bit dangerous as it smuggles a political position into a much more complicated situation. There is an overall decline in the West of small association groups. More and more of these groups happen on Discord voice chats and are divorced from the real life constraints that offer a more "grounded" character. And I think this issue has been written about much less than the "anti-monopoly" one. Even if you fervently believe that the State needs to play an aggressive role in policing private organizations, I think it's more thought-provoking to think about ways to encourage more grassroots organizing.
  • yannyu 1y ago
    Yes, but also we've eroded state and city rights in favor of federalism and standardization in the US as well. It's arguable that many steps in that direction have been for the better, but the consequence still remains that we've eroded the power of smaller organizations as a result. You're correct to note that this phenomenon crosses all aspects of life in the US, whether talking about churches, PTAs, book clubs, business, forums, fraternities, and politics. There is hardly a part of our lives anymore that isn't intruded on by national narratives anymore. There is a very fundamental question of why that is, why it's allowed, and who benefits from it.
    • nradov 1y ago
      Cities (and other types of local governments) never really had any legal rights on their own. They have always been creatures of the states.
• wenc 1y ago
  This is the classic tradeoff. (it's similar to the bias variance tradeoff, or fox and hedgehog analogy) Monolithic systems are scalable and efficient when well-governed, but brittle under errors or bad leadership (e.g. China closing its ports in the 14th century had centuries-long repercussions). Distributed systems are less efficient but more resilient to errors and poor governance. It’s not always one or the other though. American founding fathers found a right set of tradeoffs in designing checks and balances (like separation of powers) and federalism structures that harden the system against bad governance (though this is under strain today).
• nextworddev 1y ago
  Naive techies like this don’t realize crypto is even more centralized
• msabalau 1y ago
  I dunno. It's not at all clear what "small organizations, whose role in the human societal ecosystem has thus shrunk significantly" even means, over what time, and in what society. The post itself, as a piece of thinking, seems, charitably, a vague sentiment that might later turn into something that could be analyzed. In general terms, in the US, in living memory, I'm not sure that large organizations occupy more space in people's day to day lives than smaller ones. In the US, since say the 1990s, the percentage of people, say, working in small businesses are roughly the same. The number of local non-profits has exploded since over that time. The trend towards media consolidation that had occurred over the prior century would begin to be unwound, and tech consolidation would only partially reverse this. We have far more access to diverse points of view than most people did for most of the 20th century. If there is there is shift, I suspect, it's not about where people work or interact, it seems mostly that businesses, small and large, feel free to dominate people, in a way that was considered in bad form prior to Reagan/Thatcher and the fall of communism as an alternative to the West that would be appealing to post-colonial societies. But that's just a notion as vague as the original post.
• vkou 1y ago
  Better yet, the 7-7-7 rule. > The FCC's 7-7-7 rule was a 1953 regulation that limited a single entity from owning no more than seven AM radio stations, seven FM radio stations, and seven television stations nationwide to promote broadcast diversity. This rule was a response to concerns about media consolidation and was eventually eased, then replaced by the 12-12-12 rule in 1984 and later abolished by the 1996 Telecommunications Act. If you're wondering how we got to the universe where every piece of mass media that's blasted at you is owned by <5 entities, look no further. So much for diversity of speech or a marketplace of opinions. Speech is actively being funneled into a single box, and the box is owned and operated by a monoculture of media billionaires. This forum in particular wails and gnashes its teeth anytime that big tech exercises control over publishing, while turning a blind eye to this rot in trad-media - which is a thousand times worse. If I were made king for a day, the first thing I'd do would be to break up these conglomerates. You'd either be allowed to be a media conglomerate with the GDP of a small country and a reach of a hundred million people running an agnostic platform, or you're allowed to exercise editorial control. Pick one, I don't care which, but you have to pick one. (That this isn't a popular position among people seeking to maximize speech and diversity of ideas is perhaps revealing of their real values - the promotion of the monoculture pushed by trad-media.)
  • RugnirViking 1y ago
    This. I mean thats just one sector, but its spread across the whole: the whole of modern economic theory is one of competition that causes efficient markets. But when you look into the theory even a little bit, you realise it needs hundreds, even thousands of market players to reach an equilibrium thats worthwhile, and the existence of a large player even at like 10% market size can distort everything beyond usefulness. We're so far removed from that ideal in pretty much every dang sector that anyone preaching or believing in efficient markets is just foolish.
• roughly 1y ago
  Notably all of these choices and policies didn’t fall from the trees, but were come to after seeing what happened in their absence.
• derefr 1y ago
  I would point out that, regardless of the US federal government's stance on monopolies, any legislation or civil action toward that end would be far less applicable today, because of globalization. If your country prevents any domestic tech companies from becoming trillion-dollar behemoths, but such things are still permitted in at least one other country with a similarly-sized economy to yours, then that just means that all your smaller domestic tech companies are going to be outcompeted by the foreign trillion-dollar behemoth selling into your domestic market.
  • pas 1y ago
    there are two possibilities, either the big behemoth provides something for cheap (let's say because there's competition or because the buyers form an efficient price negotiation bloc), in which case the buyers benefit from buying from the behemoth (trade! comparative advantage!), or the big behemoth is bad, in which case it makes sense to try to start a company that has similar offerings. and if domestic companies cannot outcompete the behemoth then it means whatever the behemoth is selling hard to replicate (which is really really .... reeeeaallly rare in software tech, and only non-software companies like ASML/TSMC come to mind, which are more like joint companies funded by and providing to a whole industry) in which case there's unfortunately not much to do anyway - the behemoth's offer might be "unfair", but then by definition it's not competing with domestic companies, it's offering completely different. (sure, transactions costs matter, subscribers are sticky, etc.)
• huijzer 1y ago
  > Interestingly, in the past, the US federal government actively made efforts to keep private organizations from becoming too dominant. They seem to do the opposite now because small businesses can expect little support from the government (and surely no big subsidies like the large players are getting in for example the Stargate joint venture). Especially COVID was seen by many small business owners are extremely tough since larger stores were allowed to stay open while the small businesses were not.
  • kadushka 1y ago
    What subsidies is Stargate project getting from US government?
    • huijzer 1y ago
      I remembered incorrectly. They are getting "emergency declarations" support: > Donald Trump called it "the largest AI infrastructure project in history", and he indicated that he would use emergency declarations to expedite the project's development, particularly regarding energy infrastructure. So it might not be strictly a subsidy, but it surely is taxpayer-support.
      • kadushka 1y ago
        Was that the same Donald Trump who said he would end the war in Ukraine in 24 hours if elected?
  • pas 1y ago
    small businesses get a lot of exemptions from various regulations, and small business owners/proprietors tend to be very vocal and effective politically of course big systemic things are usually not great for them (such as technological change helping bigger businesses to be run more efficiently, thus eroding their edge)
• glitchc 1y ago
  > * The Bell system was broken up, resulting in a geographically distributed telecom network: https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System https://en.wikipedia.org/wiki/Breakup_of_the_Bell_System : Your phone company was local. It's worth noting that Bell's size and reach allowed it to create Bell Labs, and the subsequent breakup led to their eventual demise.
• wombatpm 1y ago
  Bell really really wanted this: It also proposed that it be freed from a 1956 antitrust consent decree, then administered by Judge Vincent P. Biunno in the United States District Court for the District of New Jersey, that barred it from participating in the general sale of computers
• hibikir 1y ago
  It's the natural result of tech gaining value, and a lot of it staying closed source: Once you are scaling, scaling very high isn't that difficult once you have the best offering, and when you are big you can do optimizations that would be seen as wasteful at a small scale. streaming service that has wide reach isn't that different when it is dealing with 10 million or 100 million subscribers, but dedicating a guy for 3 months to save 2% of your costs through some arcane fiddling is much more profitable when you have 100 million, and then your costs per subscriber can be lower. We also have plenty of problems that are natural monopolies. Take, for instance, credit card fraud detection. High level detection involves giving a risk score to a transaction. I sure can give a better fraud score if I see almost every transaction this card makes, and I have a very high percentage of visibility of all transactions in the world, than if I had to do the calculation by just knowing what, say, my boardgaming website has seen. The smaller contender has to be so much better algorithmically to be able to compete with a massive advantage in data quantity and quality. And that's the real problem we have with monopolies right now: The bigger company often doesn't have a huge advantage because they are making extra shady deals, or they have to compete less, but because being bigger makes them more efficient in some ways that are completely above board.
• griffzhowl 1y ago
  When you put it that way, the US constitution itself is about limiting the power of the federal government against the states (and individuals, in the bill of rights) Nevertheless, state-level power, for a state government or business, is still far above the kind of sub-Dunbar number (~120 people) organisations that Tao is talking about, where everyone might know each other and the network can be organised by reputation and trust rather than through state-level laws or contracts (and the attendant forms of impersonal bureaucratic enforcement that come with those). Edit: I don't mean to object to the general theme of your comment which is that power has become increasingly concentrated and unchecked, just to point out that even if those limitations that you mention had been retained it would still represent a society where the role of immediate trust-based relationships is diminished or eroded relative to the previous situation where these were the primary aspects of people's livelihoods and security
• joz1-k 1y ago
  The reason governments no longer fight huge corporations or even clear monopolies is also due to heavy globalization. If one government destroys a monopoly (a global mega-corporation) in its country, it may strengthen the monopoly (and the global mega-corporation) in another country. So the line of thinking is, "We don't like this nasty monopoly, but at least it's our monopoly."
  • neves 1y ago
    I thought it was Super PAC that rigged American democracy. Now China is the more efficient economy since their companies are must obey the State.
    • jfengel 1y ago
      China is efficient but largely because they don't actually have to obey the State. They are capitalist; they compete in the global market and follow market signals. The CCP does put a heavy thumb on some scales, but so does every country. Perfect efficiency is not optimal when circumstances change, so states always enforce some redundancy. There are many differences, of course, but just don't get the idea that China consists of monopolies in a command economy. They call it "capitalism with Chinese characteristics."
      • prewett 1y ago
        To be pedantic, it's "socialism with Chinese characteristics". The idea is to save face by renaming "capitalism" as "Chinese characteristics".
    • at_compile_time 1y ago
      We must be working from different definitions of efficient. Yes, the CCP can say jump and expect their corporations to do so, but when everyone in a modern economy jumps at the same time, massive oversupply is the result. More market-based economies are also prone to similar overproduction when everyone gets caught up in the same mania (see AI datacenters), but investors will eventually stop lighting their money on fire when it becomes clear that the returns aren't there. Chinese companies, on the other hand, will just keep jumping until the CCP decides that they are done jumping. Our feedback loop is geared towards only doing things that provide a return on investment. Their feedback loop has things like social stability and global competitiveness as competing goals to actually doing productive work. Yes, they are able to accomplish a tremendous amount when they set their minds to it, but doing a tremendous amount more of something than there is actual demand is waste, the opposite of efficiency. https://www.reuters.com/investigations/china-is-sending-its-world-beating-auto-industry-into-tailspin-2025-09-17/ https://www.reuters.com/investigations/china-is-sending-its-...
• riemannzeta 1y ago
  Antitrust and competition law certainly play an important role, but the examples you cite have not impacted the ability of what we have since the 1970s called "startups" to enter the market in competition with monopolies. The more recent attempts to block "predatory acquisitions" might be an example of antitrust/competition policy that is aimed at achieving the balance between small and large that Terry has in mind here, but I believe it's worth asking: Was the ability for groups to form startups to compete with the incumbents ever really harmed by these so-called "predatory acquisitions"? Personally, I see the economic efficiency argument for having a relatively small number (say 2 or 3) large organizations that maintain key "distribution platforms". We don't need twenty different social media websites. Antitrust/competition law can play an important role in ensuring that everybody gets access to these platforms on the same basic terms — no favoritism. But I don't know that we need to prevent acquisitions of new apps that can then be bundled into services offered by one or more of those platforms -- at least not to achieve the balance between "small" and "large" that Terry seems to have in mind here. Rather, I think what we need to aggressively protect is the incentive that small groups have to form and fund startups. In general, I think we're doing fine on the economic side right now. An exception might be the recent acquisitions of founders independent of their coworkers — this presents a profound threat to the startup ecosystem. But by and large the system seems to be working fine. But is that true of political "startups" — i.e., new interest groups that form to pursue specific policy agendas, which might then be able to syndicate eventually even into new political parties? Of that I'm less certain. It sure seems like the last year or two have been trending toward less political freedom.
• zjaffee 1y ago
  And the reasons for this are increasingly clear. In a globalized world, you need large-scale organizations to compete. Smaller nations are increasingly forced to become highly specialized in a few specific industries, often where companies are sold to major firms from allied countries (large parts of europe or israel, singapore), or you end up with individual companies constituting a significant portion of the national GDP (korea). The way in which the US is able to weld such power on the world stage, especially with the rise of China is we don't constantly break up every rising business.
• StopDisinfo910 1y ago
  These actions were a direct consequence of the situation at the end of the 19th century. People here often forget that the Sherman act was a regulation against trusts, large integrated companies, and not monopolies. We knew from the start that large companies were bad for democracy and the civil society. The issue is just that the elite decided in the 80s that their economic interests trumped the public interested and the democrat kept doing what Reagan started.
• Hilift 1y ago
  That doesn't mean those regulations or structures were intended to be a permanent fixture. Similarly, Bretton Woods was not intended to maintain gold at $35 per ounce. The world is a place where some development requires large amounts of capitalization. That is also a competitive advantage. No-one cares about any of those previous bullet points if they are generally happy in their lives. When the SEC brought their first large scale financial fraud indictment, no-one cared. (Investors Overseas Service (IOS), $224 million and International Controls Corporation (ICC)). It was pursued because someone stole money from the wealthy. However, many years later, one of the two fraudsters was revealed to be a notorious Russian agent that worked for the Office of Strategic Services in London during WW2. He would walk files of Ukrainian sources out of the OSS office (obtained from MI6!) and down the street to the Russian embassy. Those Ukrainian sources later disappeared. The world is a sketchy/dodgy/evil place. Partitioning it into chunks may provide some temporary benefit, but the real world does not evolve that way. Look at Carlos Slim, Mexican Cartels, Russian oligarchs, META is on track for $80 billion net profit this year ... Oh also, two of the Bretton Woods principal architects, also Russian agents. One had their US passport revoked and US citizenship revoked in 1954. He was the chief economic advisor to Franklin Roosevelt. No-one cared about him either, and he essentially envisioned the world of monetary policies that we have today. He lived out the remainder of his life very well off, advising Colombia on their monetary policy. In 1995, he was revealed to be a prolific Russian agent from KGB archives researchers and authors. https://www.theguardian.com/world/2008/may/21/internationalcrime.usa https://www.theguardian.com/world/2008/may/21/internationalc... https://en.wikipedia.org/wiki/International_Controls_Corporation https://en.wikipedia.org/wiki/International_Controls_Corpora... https://www.casemine.com/judgement/us/591496adadd7b049345e5c50 https://www.casemine.com/judgement/us/591496adadd7b049345e5c... https://en.wikipedia.org/wiki/Lauchlin_Currie https://en.wikipedia.org/wiki/Lauchlin_Currie
• biztos 1y ago
  I was so used to my American bank not actively selling me snake oil that I stupidly bought a very expensive snake-oil subscription from my German bank when I was living there. Ended up with a warehouse full of snake oil (metaphorically speaking) and a sunk-cost fallacy before I finally figured out they just had a strategic partnership with Snake Oil GmbH so my account representative got a commission on my stupidity.
• panick21_ 1y ago
  Banks being only local was utterly horrible for the economy. You had many small banks completely depended on one region and a local supply shock would kill all the local banks as well. This regulation didn't happen to prevent monopolies, it was done to create monopolies. Banks didn't want other banks from other regions to compete against their costumers. Canada had larger branch banks that were much more stable. > * Monopolies and oligopolies were routinely busted, resulting in less concentration in many industries: Yes and often what was defined as a monopoly and what an oligopoly and what was defined as 'to large' was determined by what industry had a competitor that they couldn't defeat and also had friends in high places. The original state level anti-trust actually came out of butchers that wanted protection from centralized butchers that could use special railcars to transport frozen meat, instead of doing localized butchering. So a lot of the history that many idolize is just a different form of companies using state power against each other.
• thaawyy33432434 1y ago
  Recently I realized that US are very close to a centrally planned economy. Meta wasted 50B on metaverse, which like how much Texas spends on healthcare. Now the "AI" investments seems dubious. You could fund 1000+ projects with this kinds of money. This is not an effective capital allocation.
  • pas 1y ago
    how would you pick those 1000 projects? this is the problem with NIH grants too, for example - lots of appeal to authority, lot of noise, not a lot of signal. AI might be a bubble, but at least there are people (who value their reputation) who decided on the investments, and in the end if (when?) things don't work out with these insane bets they will be the ones looking stupid, not some faceless committee. and sometimes we feel that feedback cycles are too short (managers only think in quarters) but here we have a pretty long cycle for this moonshot, and yes, this leads to bonkers numbers (and real systemic risks, which need to be managed - and alas neither laws and regulations nor the lawmakers and the regulators are even remotely capable and ready for managing this)
• artk42 1y ago
  Thanks, this is an amazing historical note! Will learn in detail. My intuition advises that efficient antimonopoly is the battle we are losing..
  • pas 1y ago
    also note that having arbitrary lines on maps led to very inefficient banking and healthcare (and telecom) markets it's protectionism, and led to ~50 monopolies (or oligopolies) instead
• akst 1y ago
  I feel point 1 is a more specific example of point 4. Point 3 makes sense because banks are handling peoples money, I don't know enough about point 2. However point 1 & 4 is more about market power than anything else, point 3 is more about ensuring confidence in basic financial services aren't undermined by risk taking which feels like a separate point. Sometimes for reasons other than foul play or a poorly design regulatory system, there's value in an organisation being large as it has increasing returns to scale, it can produce more output with the same input compared to smaller organisations. It's also unfortunately one way how monopolies form, easiest example being utility companies because there's also a case not to break them up as well as they can provide the service at a cheaper cost, but will they? Which makes the problem harder to solve then just breaking these firms up. In NSW Australia (New South Wales the state Sydney is based in), the problem was approached by creating an institution called IPART which basically determines prices/rates for both public and private monopolies. In Sydney there are private motor ways and tunnels, IPART determines the rates, and the water company (Sydney Water) largely has its rates also decided by IPART, same goes for council rates (tax on land/properties, etc). IPART is far from perfect, it answers to the Premier (the Governor) so there's a risk of it becoming an instrument of popularism, but this means Sydney water is chronically underfunded (and water rates aren't even that high), this has second order effects like Sydney Water dragging its feet on committing to providing infrastructure. There are massive fixed costs with starting a water utility firm so it impacts stuff like residential construction reducing overall house supply, which is a problem in Sydney when housing is so expensive. Sometimes these larger entities form as a result of government created entry barriers, in America it's easier to get small business funding than it is in Australia. Also in Australia we have laws about prohibiting pharmacies opening too close to each other, which is incredibly dumb. There's a very strong Pharmacy lobby, not big pharma but instead drug stores which might be a uniquely Australian phenomena. But it means there's no drug store near my local train station in an area that was recently redeveloped, or a single Pharmacy in areas like Sydney Olympic Park, but 10 in a smaller older area such Granville. In Australia we have 2-3 large grocery stores (Coles, Woolworths and to a lesser extent IGA), a 4th exists to an even lesser extent but has struggled to grow and has been struggling in part due to the land planning regulatory framework. Most cities in the US have something similar, but in NSW it's in overdrive plays a big part in why housing is so unaffordable as it largely determines how much floor space is allowed on each lot and how tall buildings can be. But back to groceries, it's very difficult for ALDI to get permission to build as many grocery stores to compete due to energy barriers imposed by the planning system. If you own the land, you need to first get a planning proposal in to rezoned and planning controls updated, then you need to make a seperate development applicaition which can easily take 5 years. I believe parking minimums in the USA can have a similar effect, as many cities require different levels of free parking for different land use. Sometimes over regulating things can result in a lack competition, and it's not always a result of a lack of government intervention. And sometimes there's value in allowing organisations to be large. And when it is a problem sometimes the solution isn't always break them up.