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So the argument against Amazon is that it is has the potential to do bad things, so they should have restrictions? Surely Krugmen's argument isn't so shallow a

by toolz 12y ago

So the argument against Amazon is that it is has the potential to do bad things, so they should have restrictions? Surely Krugmen's argument isn't so shallow and petty.

nl 12y ago
Many criticisms of Krugman are valid, but he is rarely shallow or petty. OTOH, the Economist article isn't petty, but it doesn't seem to make any particular groundbreaking point.
- zo1 12y ago
  And these criticisms are what? Besides what the OP mentioned... Can you point us to his arguments/points?
  - nl 12y ago
    The article links to Krugman's post. One point Krugman makes that isn't discussed at all is that Amazon uses its market power to keep book prices low. That makes the article's points about it being easy to setup an online store somewhat moot: What point is an online store if no one buys from it because prices are dramatically lower elsewhere. Krugman also makes the point that Amazon is a (and perhaps the dominant) discovery mechanism for books. Of course, if you aren't in Amazon you miss that mechanism. Combine these two things, and it makes creating a competitor very, very hard. That's doesn't make it illegal, but it's a very big concentration of market power. Edit: notably, this makes it difficult for even publishers to compete: if the dominant discovery mechanism for your items excludes you, then it's a problem. Note the similarities to Google here, and how careful Google is to emphasise the algorithmic nature of their search ranking. Amazon can't use that defense. I'm not sure I totally buy Krugman's argument that Amazon is actually using its power in ways that "hurt America". But, I am more amenable to his argument that it has too much market power in the book market as outlined above - not totally convinced, but I think his points in that area are much stronger than the Economist makes them out to be.
    - russell_h 12y ago
      But publishers control the supply, so unless Amazon is willing to subsidize the difference (and purchase books through unexpected channels) they really can't undercut prices. What's going on here is that publishers want to use Amazon's platform, but they want to dictate the terms of that usage.
lumberjack 12y ago
Isn't it pretty much the mantra of most hackers to build trust less systems?
- toolz 12y ago
  I think that's an interesting point and deserves to be considered carefully. I would suggest that hacking for trust less systems is a wonderful ideal which can only be successfully achieved when the system has the potential to be fully understood. At the moment we don't understand human behavior anywhere near well enough to presume we can target corporations with restrictions without negative consequences. If the approval of a restriction is wide sweeping we can make market wide changes, but targeting single corporations just isn't justified with our current ability to predict and expect outcomes in the economy.
redwood 12y ago
That's the foundation of anti trust law. Similar to how we protect Civil liberties from the government before the government does bad things...
- toolz 12y ago
  Sure, I guess my argument would be that simply because a problem could exist doesn't mean it's practical to address it and especially not practical to address potential bad, on a company by company basis. I could spend days listing things people and companies could potentially use for ill purposes that aren't practical to address.

by toolz 12y ago

So the argument against Amazon is that it is has the potential to do bad things, so they should have restrictions? Surely Krugmen's argument isn't so shallow and petty.

nl 12y ago

Many criticisms of Krugman are valid, but he is rarely shallow or petty. OTOH, the Economist article isn't petty, but it doesn't seem to make any particular groundbreaking point.

zo1 12y ago
And these criticisms are what? Besides what the OP mentioned... Can you point us to his arguments/points?
- nl 12y ago
  The article links to Krugman's post. One point Krugman makes that isn't discussed at all is that Amazon uses its market power to keep book prices low. That makes the article's points about it being easy to setup an online store somewhat moot: What point is an online store if no one buys from it because prices are dramatically lower elsewhere. Krugman also makes the point that Amazon is a (and perhaps the dominant) discovery mechanism for books. Of course, if you aren't in Amazon you miss that mechanism. Combine these two things, and it makes creating a competitor very, very hard. That's doesn't make it illegal, but it's a very big concentration of market power. Edit: notably, this makes it difficult for even publishers to compete: if the dominant discovery mechanism for your items excludes you, then it's a problem. Note the similarities to Google here, and how careful Google is to emphasise the algorithmic nature of their search ranking. Amazon can't use that defense. I'm not sure I totally buy Krugman's argument that Amazon is actually using its power in ways that "hurt America". But, I am more amenable to his argument that it has too much market power in the book market as outlined above - not totally convinced, but I think his points in that area are much stronger than the Economist makes them out to be.
  - russell_h 12y ago
    But publishers control the supply, so unless Amazon is willing to subsidize the difference (and purchase books through unexpected channels) they really can't undercut prices. What's going on here is that publishers want to use Amazon's platform, but they want to dictate the terms of that usage.

lumberjack 12y ago

Isn't it pretty much the mantra of most hackers to build trust less systems?

toolz 12y ago
I think that's an interesting point and deserves to be considered carefully. I would suggest that hacking for trust less systems is a wonderful ideal which can only be successfully achieved when the system has the potential to be fully understood. At the moment we don't understand human behavior anywhere near well enough to presume we can target corporations with restrictions without negative consequences. If the approval of a restriction is wide sweeping we can make market wide changes, but targeting single corporations just isn't justified with our current ability to predict and expect outcomes in the economy.

redwood 12y ago

That's the foundation of anti trust law. Similar to how we protect Civil liberties from the government before the government does bad things...

toolz 12y ago
Sure, I guess my argument would be that simply because a problem could exist doesn't mean it's practical to address it and especially not practical to address potential bad, on a company by company basis. I could spend days listing things people and companies could potentially use for ill purposes that aren't practical to address.