5 ms·

I wonder, is there any way to avoid this kind of market failure? Even a planned economy could succumb to hype - promises that improved societal efficiency are j

I wonder, is there any way to avoid this kind of market failure? Even a planned economy could succumb to hype - promises that improved societal efficiency are just around the corner.

smallmancontrov 1y ago
There is a way, and if anyone tells you we have to go full Hitler or Stalin to do it they are liars because last time we let inequality cook this hard FDR and the New Deal figured out how to thread the needle and proved it could be done. Unfortunately, that doesn't seem to be the flavor of politics on tap at the moment. Sam Altman cornering the DRAM market is a joke, of course, but if the punchline is that they were correct to invest this amount of resources in job destruction, it's going to get very serious very quickly and we have to start making better decisions in a hurry or this will get very, very ugly.
swatcoder 1y ago
> Is there any way to avoid this kind of market failure? There are potentially undesirable tradeoffs and a whole new game of cheats and corruption, but you could frustrate rapid, concentrated growth with things like an increasing tax on raised funds. Right now, we basically let people and companies concentrate as much capital as they want, as rapidly as they want, with almost no friction, presumably because it helped us economically outcompete the adversary during the Cold War. Broadly, we're now afraid of having any kind of brake or dampener on investments and we are more afraid of inefficiency and corruption if the government were to intervene than we are of speculation or exploitation if it doesn't. In democratically regulated capitalism, there are levers to pull that could slow down this kind of freight train before it were to get out of control, but the arguments against pulling them remain more thoroughly developed and more closely held than those in favor of them.
- amelius 1y ago
  > there are levers to pull that could slow down this kind of freight train before it were to get out of control Care to share some keywords here?
  - thfuran 1y ago
    Taxes and/or regulatory approval processes.
- thfuran 1y ago
  We don't really seem to be shying away from government corruption.
octoberfranklin 1y ago
A tax on scale. Yeah I know HN is going to hate me for saying that. If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company. Once "better served" is quantified, you know the coefficient for taxation. Make no mistake, this coefficient will be a political football, and will be fought over, just like the Fed prime interest rate. But it's a single scalar instead of a whole executive branch department and a hundred kilopages of regulations like we have in the antitrust-enforcement clusterfuck. Which makes it way harder to pull shenanighans.
- zozbot234 1y ago
  > If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company. Why? That's exactly the circumstances where the mere potential for small companies to pop up is enough to police the big company's behavior. You get lower costs (due to economies of scale) and a very low chance of monopolization. so everyone's happy. In the case of this DRAM/flash price spike, the natural "small" actors are fabs slightly off the leading edge, that will be able to retool their production and supply these devices for a higher profit.
  - octoberfranklin 1y ago
    the mere potential for small companies to pop up is enough to police the big company's behavior. If that were true, "you're in Amazon's kill zone" wouldn't be something VC's say to startups. And yet, they do say that.
    - Ray20 1y ago
      And yet, startups exist.
      - octoberfranklin 1y ago
        because they stay out of the kill zone

I wonder, is there any way to avoid this kind of market failure? Even a planned economy could succumb to hype - promises that improved societal efficiency are just around the corner.

smallmancontrov 1y ago

There is a way, and if anyone tells you we have to go full Hitler or Stalin to do it they are liars because last time we let inequality cook this hard FDR and the New Deal figured out how to thread the needle and proved it could be done. Unfortunately, that doesn't seem to be the flavor of politics on tap at the moment. Sam Altman cornering the DRAM market is a joke, of course, but if the punchline is that they were correct to invest this amount of resources in job destruction, it's going to get very serious very quickly and we have to start making better decisions in a hurry or this will get very, very ugly.

swatcoder 1y ago

> Is there any way to avoid this kind of market failure? There are potentially undesirable tradeoffs and a whole new game of cheats and corruption, but you could frustrate rapid, concentrated growth with things like an increasing tax on raised funds. Right now, we basically let people and companies concentrate as much capital as they want, as rapidly as they want, with almost no friction, presumably because it helped us economically outcompete the adversary during the Cold War. Broadly, we're now afraid of having any kind of brake or dampener on investments and we are more afraid of inefficiency and corruption if the government were to intervene than we are of speculation or exploitation if it doesn't. In democratically regulated capitalism, there are levers to pull that could slow down this kind of freight train before it were to get out of control, but the arguments against pulling them remain more thoroughly developed and more closely held than those in favor of them.

amelius 1y ago
> there are levers to pull that could slow down this kind of freight train before it were to get out of control Care to share some keywords here?
- thfuran 1y ago
  Taxes and/or regulatory approval processes.
thfuran 1y ago
We don't really seem to be shying away from government corruption.

octoberfranklin 1y ago

A tax on scale. Yeah I know HN is going to hate me for saying that. If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company. Once "better served" is quantified, you know the coefficient for taxation. Make no mistake, this coefficient will be a political football, and will be fought over, just like the Fed prime interest rate. But it's a single scalar instead of a whole executive branch department and a hundred kilopages of regulations like we have in the antitrust-enforcement clusterfuck. Which makes it way harder to pull shenanighans.

zozbot234 1y ago
> If a big company and a few small companies all have identical costs for producing a product, society is better served by having it produced by the few small companies than the one big company. Why? That's exactly the circumstances where the mere potential for small companies to pop up is enough to police the big company's behavior. You get lower costs (due to economies of scale) and a very low chance of monopolization. so everyone's happy. In the case of this DRAM/flash price spike, the natural "small" actors are fabs slightly off the leading edge, that will be able to retool their production and supply these devices for a higher profit.
- octoberfranklin 1y ago
  the mere potential for small companies to pop up is enough to police the big company's behavior. If that were true, "you're in Amazon's kill zone" wouldn't be something VC's say to startups. And yet, they do say that.
  - Ray20 1y ago
    And yet, startups exist.
    - octoberfranklin 1y ago
      because they stay out of the kill zone