>Among their recommendations is preventing tech platforms from vertically integrating into different lines of business, where they can potentially favor their own services and harm rivals. In this view, Facebook shouldn’t be allowed to own Instagram.
Weird, I would argue that Facebook buying Instagram was a horizontal integration.
Amazon buying cloudflare is more something I'd think is vertical but it's possible I just don't understand the terms.
I don't know why you arr being downvotes, but your understanding is consistent with mine.
Although I still think the Instagram acquisition was at some level also vertical since one could argue Instagram was a more efficient delivery conduit for a certain subset of the population, and what Facebook was really out for was to pad their datasets.
> “I don’t even think stasis is compatible with liberty,” he told the Washington audience. - Bezos
Suppose one were to attempt to steelman Jeff’s statement. Is there any credible basis for this statement?
Or is it just one of those things that powerful people say because it makes them sound profound and they don’t have to follow it up with substantive supporting evidence.
If he's talking about economic stasis, let's give it a go:
1) Economics are the monetary interactions of a given society, subgroup, population, etc
2) stasis refers to not just stagnation, but a complete lack of change
3) total lack of change at a meta-scale like a society only exists in totalitarian societies
4) in the case of total economic stasis, you would need a command economy/controlled economy
5) in the scenario of a command economy, some of the people involved in the economy would fundamentally need to be oppressed
6) therefore, regardless of any moral or ethical judgements, a totally static economy would be inhibiting of the liberty of any given individual participating in it
Now, that said, there are many things to be gained by limiting what people are allowed to do. By the same course of logic you could argue that all laws are incompatible with liberty, since technically the government is trying to force you not to kill people, for instance. Obviously that is still to the benefit of society even if you personally have one fewer option. At this point it comes down to the fact that laws and regulations, when done correctly, can increase the number of practical/feasible options available to a populace, even though they technically restrict some of the options that would cause a society to fall apart. People can accomplish more in groups than they could on their own due to the options of specialization and parallelizing work becoming viable when they have restrictive agreements to cooperate. That's the whole point of companies.
So this is IMO a case of him being technically correct while still not making a very deep or substantial point in the overall context.
On the face of it the statement looks like one of those things that is either a tautology, or false.
If society is in a state of stasis, that means no one is allowed to do things that go beyond what society is doing in the present. That means you don't have the right to innovate, to try new things, and so on, which seems integral to individual liberty. So his statement is obviously true.
However, if you consider liberty as a social construct that means you're allowed to do things as defined by society, then whether that society is static or not is immaterial. So the statement isn't necessarily true.
And that's what you get when you make arguments about the definition of words.
it's an opinion, that's why he says ' i don't even -think-'. it carries no value or credibility than that of his opinions- which you can choose to value or not. besides that what liberty is is also opinion.
So if our governance became static it would be safe to assume that it would be unable to adapt to changing culture. For that government to be continually effective it would then need to enforce that it's constituents' values and lifestyles are unchanging, which seems antithetical to the concept of liberty.
In practice we see this since totalitarian regimes work to suppress and homogenize their populations.
No mention of ending inflation, which is a deliberate state-driven policy to steal from the poor to give to the rich and make the state "look good" by lowering the metric of unemployment:
"even in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
> The real constraint only kicks in when there’s too much spending relative to a limited supply of goods and services—in other words, when inflation spikes. And there’s been little sign of that in America for decades.
It amazes me that this can still be repeated with a straight face. The prices for housing, healthcare, and education have skyrocketed - many would say that the costs for these are the problem.
What is happening is that technological and economic progression are continually trying to lower the prices of consumer goods. Rather than let this natural deflation occur, the overt monetary policy is to inject new money in the consumer sector until average prices rise instead.
But this money isn't given directly to consumers as cash, but only supplied as loans through financing channels. People don't have an extra ten dollars to spend on groceries (which would make grocery prices rise), but an extra $1,000 to borrow and bid up financializable assets. The monthly payments to service the debt (sometimes called rent) are also mandatory, so their financial position becomes ever more dependent on continual income.
b. why is low unemployment bad? let's say we have a deflationary economy, doesn't that lead to high unemployment which is a feedback to more deflation? how is that not a bad thing?
What are you talking about? The point of inflation is to encourage the spending and investment of money. It doesn’t really have anything to do with unemployment.
The chart showing USG spending / GDP excludes transfer payments, which strikes me as misleading. Transfer payments have ballooned in the time period shown and are still transfers of cash out of the government's coffers. I'm not some sky-is-falling Federal debt doomsayer; borrowing has been cheap and we're not breaking a sweat to service the debt. Still, it's hardly controversial that the current trajectory is unsustainable in the not-so-long term of a few decades.
Transfer payments are presumably excluded because GDP traditionally excludes transfer payments. Including something in the numerator, but not in the denominator, is a good way to get weird ratios. E.g. it would be possible (though it would not presently happen in the US) to have a spending:GDP ratio greater than one.
I do agree that it would be better to use some other denominator that does not have this problem, but it isn't a crazy decision to begin with.
I agree with some of the points being made in this article, but there's definitely better resources on this topic.
The paper mentioned in the article, "Amazon's Antitrust Paradox", is very thorough and easy to read even for someone (like me) who doesn't have a background in economics.
The key point made in that paper is that modern antitrust legislation only looks at price when determining whether a monopoly is harming the consumer, and doesn't consider scale or the effects on the overall market and competition.
>This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.
Even though I'm a software engineer, I'm skeptical of claims that technology can help fix social, economic, or environmental problems. I support green technology, but they're not a panacea. In articles pushing green tech and sustainable energy, there seems to be this implicit assumption that we can maintain our current standard of living in a "sustainable" way. Solar panels and electric cars aren't going to prevent climate catastrophe if only 5% of people can afford them. Rather than relying on individual consumers to make ethical choices (opting into living sustainably) we need drastic changes at a state-wide level (so that choosing not to be sustainable is opt-out).
>Income inequality can be solved by educating or retraining workers for the high-tech jobs of the future.
This statement doesn't make any sense. If you increase the number of software engineers, the average wage will decrease.
Edit: Forgot to mention that tech is absolutely automating away a large number of jobs.
Another thing the pricing test favored by the Chicago School doesn't consider is the effect of consolidation on entrepreneurship. Huge consolidated companies become de-facto standards that are hard to compete with for many many reasons and that have the resources to simply buy or clone any competitor in its crib. In the computing world they also tend to become platform monopolies with strong lock-in from APIs and network effects. You also get a huge problem with regulatory capture due to the massive budgets these companies have for lobbying and revolving door deals. If the mega-corps get big enough and exist long enough they start to effectively merge with the state.
The price to the consumer might not change a lot, but a lot of innovation doesn't happen when the market gets dominated by players like that.
Back to inequality -- this effect also leads to consolidation of more and more wealth at the top by these companies and to geographic consolidation of wealth in the cities where these monster companies are headquartered or have major operations. Today that's San Francisco, Seattle, Los Angeles, and New York. Due to the "law of rent" this forces up real estate costs in these cities, further making it hard for middle class people to build wealth regardless of where they live. Geographic wealth concentration means you face a choice between poor career prospects and living in a city where the real estate market takes all your surplus due to the natural spatial supply limits (land, commute times) that exist for housing.
Entrepreneurship is a major vehicle for geographic wealth dispersal and for class mobility from the middle class upward. Without entrepreneurship the ranks of the very wealthy become incredibly stagnant and almost like a generational nobility. (Europe has this problem too, though for very different reasons. In Europe the problem is too much cumbersome regulation making it too hard to start new businesses. So Europe has too much government and America has unstoppable mega-corps that crush everything new.)
> This statement doesn't make any sense. If you increase the number of software engineers, the average wage will decrease.
It also assumes that there will be jobs available. Increasing the supply software engineers does not mean the demand will increase. I see this logic error all the time when people discuss solutions to income and wealth inequality. Actually, the solutions are taxation and estate taxes; but those proven solutions are rarely mentioned.
Thank you for addressing the only point on this list which shows any promise - a renewed commitment to Trust Busting.
I have a similar take on technology - new industries are nice, but without some serious push, each is going to take time to get started. If we wait for the "market" to drive solar panel adoption by itself, foreign competition is going to choke out domestic firms.
This list lost me at more Supply Side "Economics". Both US political parties have been trying variations on this theme continuously since 1980. As far as Im concerned, this is the problem, not the solution. The same goes for disingenuous Corporate Libertarianism, German-style subsidies, and whatever other model you can invent to pretend this still works.
The real solution? Workers need to tell their bosses, "F%$k You, Pay Me." In all seriousness, driving for Uber or Lyft is just a way to devalue your vehicle for pay that rarely keeps pace with such and gas.
Inflation continues, even as workers see their pre-inflation average wages remain constant. Its almost like the economy doesn't really include us anymore.
Your economy is struggling? Maybe you should pay us enough to participate, boss.
A lot of analyses of capitalism miss out on the fact that the problems it creates vary widely by sector. Warren Buffet said that if "a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down." That's because the airline industry didn't return profits to investors; instead the vast value created by the industry accrued overwhelmingly to the public, because of competition.
So a good general strategy would be for the government to make sure that, at least in the long run, the rules for each sector are tweaked to make the sector look more and more like the airline industry.
It's not hard to imagine a way for this to happen in the tech industry. We can imagine a technology sector that runs completely on commodity hardware, open-source software, and open APIs instead of walled gardens like FaceBook. This would just take a bit of political will and some smart regulations - no need to radically overthrow the system that has created so much prosperity for us.
The computer you're typing on and your Internet connection has everything you need to create incredible value for yourself and humanity. No property, factories, government intervention required.
What's sitting in front of you is so mind bogglingly more powerful than the "airline industry".
btw "..for the government to make sure that.." is asking a lot. Keeping potholes filled gives the government a run for its money.
It's not an issue of having good ideas. The issue is really about execution and consensus building.
We need to stop propping up 'the choosen one' type leaders and we will see change. I want boring people elected ala Merkel.
Starting all the way back from Clinton\Bush\Obama\Trump to AOC these leaders are the wrong fit to make change happen in polarized times. They are great for media rating but not much else.
I want to see a non-charismatic figure who is not evaluated by how much dopamine they produce in my head through an instagram pic or a cool speech.
I am tired of these leaders who think that's the route. They have all failed. I can't believe no one sees that.
As the other responder said, boring non-charismatic people do not get elected in the US for President. The Democrat Party has been trying this over and over and over, and losing easily-winnable elections as a result. The latest election with Hillary losing is the most visible example of this phenomenon: she had no charisma at all, and lost to someone who was extremely polarizing.
It doesn't work this way in other countries because they don't elect their executives. In Parliamentary systems, the Parliament chooses the executive, rather than that person being chosen in a popular election. So the executive only needs to be charismatic enough to win a seat in parliament, not so popular as to win a nationwide popular election for a single and critical post.
The problem is that a boring non charismatic people fail to get elected. Do you think that the past presidents the USA had were the best fit for their jobs? Some did well but we can never know what the alternatives would have done.
The title implies Capitalism is broken. It's not. Capitalism has provided more benefits to more people than any other economic system in history. American Capitalism has produced the telephone, the automobile, the personal computer, the cell phone, the internet, and made us one of the richest countries in the world.
A better title would be, Tweaks that can make American Capitalism Better.
If my car has a broken headlight, my car is still broken and I still fix it, even if it has been providing value and even if it still does so. The implication is only that it isn't living up to its promises, not that it is not worth keeping. (Besides, the title refers to American Capitalism.)
Capitalism has ignored negative externalities for a long time, and now the bill is nearly due. The environment is devastated, climate change will disrupt the ecosystem services we take for granted, and inequality is giving rise to political turmoil.
A better title would be, How to save Capitalism before it's too late.
> Capitalism has provided more benefits to more people than any other economic system in history.
Provably false. One example is the Islamic economic system. It was famously noted that there were no more people who accepted charity during the rule of Omar Ibn Abdul-Aziz, because poverty was basically eliminated.
How many people need to be working for sub-poverty wages before we can say American capitalism isn't perfect? How many inches do the oceans need to rise? How many people need to file bankruptcy due to medical bills?
No wonder we can't fix our problems if people insist on pretending their aren't any.
Capitalism provides more benefits than feudalism, which in turn provided more benefits than a pre-feudal barter economy. But that doesn't mean that there is no economic system that would provide still more benefits than capitalism.
Why does capitalism get the credit for industrial and scientific breakthroughs? That's begging the question, no? There is absolutely zero proof that these things are inclusive of one another, and plenty of evidence to the contrary. Especially when the current capitalistic system is not reasonably sharing the benefits of these breakthroughs?
> Capitalism has provided more benefits to more people than any other economic system in history.
Stop spinning this as an argument that capitalism is not broken. It's merely less broken than alternative systems and evidently only works in conjunction with heavy regulation.
Historic examples of (nearly) unregulated capitalism exist and they are horrifying.
You can buy and sell almost anything under capitalism. You can buy or sell property. You can buy or sell pieces of a company (stocks). You can buy or sell human labor. And the way that businesses make money is by essentially arbitraging some market, for example by buying something in one place and selling it somewhere where it is more expensive, or by buying labor and selling the products of that labor at a profit.
But there are certain things you already cannot buy and sell in our current system, and this is key to seeing the way forward. You can't buy and sell people, for instance. That would be slavery. The purest form of capitalism would include slavery also. You can buy labor, but no more than 40 hours per week without paying overtime.
The socialist point of view on this is that it isn't just buying the life of a person that is morally wrong; buying their lives piecemeal 8 hours at a time and then arbitraging the value of their labor is wrong as well. So under socialism when people work, they work always and only for themselves or as part of a cooperative that they are an equal owner of. So they are taking part in a voluntary activity, not selling themselves. Ultimately that's the only way to fix our economic system; allowing the arbitrage of labor leads to fundamental instabilities and inequalities that cannot be resolved. Otherwise the pressures within society will continue to grow until the society tears itself apart or relieves the pressure by going to war.
Thank you - this is a concise definition and gives a working pov that can be widely applied - do I own my personal data, can I sell it? Its an easy one to think around
As an intellectual framework this is a great jumping off point.
I hope you don't mind if I suggest you may not have originally thought of it - where can I read more?
To me the concept of labor in socialism is outdated. Consider Facebook, do all the uses who generate the content and activity that gives Facebook its value count towards "labor" and therefore should participate in the rewards of that labor?
If everything was still physical factories, staffed by humans, and creating physical widgets then I can at least understand the socialist view. However, in the current market labor so is detached from profit it doesn't make a lot of sense.
> So under socialism when people work, they work always and only for themselves or as part of a cooperative that they are an equal owner of.
I don't see how this is possible without killing or even reversing progress.
Example: You work alone and make $500k a year. You know that if you had another good developer you could make a million a year. You know a lot of developers who currently make $100k a year. What is a fair pay? You might say $500k, sure, now both of you earn the same. But, then you realize that you can earn $1200k in total with yet another developer, what should you pay that developer then? $200k? Seems unfair, now he earns less than the first developer even though they do exactly the same job. Do you reduce the salary of the first developer to $350k to make it fair for both? I doubt many workers would think that reducing salary just to hire people is a good thing. Also you yourself would still earn $150k more than them, so would you reduce your own salary to $400k to make it fair? Then why would you even do the work to hire these people? Would they be happier to be stuck with $100k a year when you could easily pay them both $150k a year while still keeping significant profit? Would the world be better off with the 3 of you producing $700k total value (your $500k + their $100k each) instead of $1200k that you would produce together at your company?
Ultimately, the only reasonable thing to do is to hire people at what their job is worth for a typical company or slightly above that. Any value above that is not created by the worker but by the work creator. Then they are happy since you pay them more than they got before, you are happy since you earn money for the work of providing valuable jobs. As a bonus you never get into situations where you would like to hire a person, the person would like to work for you but you can't pay him the same as the rest of your workers since those workers are significantly overpaid compared to the rest of the market.
> So under socialism when people work, they work always and only for themselves or as part of a cooperative that they are an equal owner of.
The thing is that all new businesses start that way already. People, including workers, sell their shares in businesses to outside investors - sometimes even ceding their control into how the business is run, thus becoming "wage labor" at least to some extent - for all sorts of reasons. This does not make such transactions "non-voluntary"!
What socialism system are you talking about? Just name one socialist country that applies your ideal scenarios. IMHO this system only exist in your mind, it is not real.
Countries that people say are Socialist like those in the north of Europe, are really capitalistic societies.
I have known plenty of real socialist countries in the world, and they only share misery. In those socialist countries, like Venezuela or Cuba, the old Soviet World, differences between those in power and those that are not are enormous, bigger than in any capitalist system.
In Venezuela for example, those in power made deals selling the gold of the country, the oil and until recently, had access to favorable exchange of currency that they sold in the black market making a tremendous profit.
In Cuba people earn a maximum by law of something like 30 dollars/month. But people in charge sells access to country resources like permission to place a Hotel or a factory and make millions. All the heroes of revolution living in Mansions in front of the sea while normal people do not have permission to change a broken electrical switch in their houses or feeding the cow in front of their house, starbing.
Cooperatives, like Mondragón in Spain or kibbutz in Israel have their own set of problems. If you pay everybody the same, the best people just get out soon.
Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague. “You’re too big because some bureaucrats said so” is not law. That’s not justice. It’s totalitarian.
How can a company avoid breaking the law if they don’t know they’re breaking it?
>>Anti-trust isn’t equipped to deal with anything because it’s arbitrary and vague.
That's something of a gross mischaracterization of antitrust law. The Sherman Act and other laws provide various guidelines as to what constitutes anticompetitive conduct. Through the succeeding decades since the introduction of antitrust legislation courts have also consistently built up case law that provides further guidance.
I saw this argument in another HN post that I found very convincing. The current antitrust standard of "consumer welfare" isn't necessarily wrong, but in the current world of tech it is wrongly applied because "the consumer" has been misidentified.
As we like to say so often "if you're not the paying customer, you're the product." Then in the world of Facebook and Google, the customers are really the advertisers, who are forced to pay monopoly rates because there are no good alternatives. Even with Amazon the long term reduction in viable competitors is not a good thing for end consumers, and if you look at other areas (I'd consider an author a customer of a publishing house, and if Amazon rules all of book distribution it means authors are worse off).
I think the ambiguity is kind of the point. If things were written out ("doing X is monopolistic"), then it would be easy for companies to operate in an noncompetitive manner, so long as they don't violate specific laws. Plus, the definitions of things like monopolies vary so much across industries, that it would be impossible to come up with specifics that cover every instance of anti-trust violations. I don't think it's perfect, but I do think it's more effective than the alternatives.
It's like a law against harrassment...it requires human judgment. Some harassment is obvious. Some depend on perspective. Enforcing harassment laws can still be justice even though it is arbitrary and vague.
Hell, if laws weren't arbitrary and vague depending on circumstance, we wouldn't need lawyers and courts!
[+] [-] komali2|7 years ago|reply
Weird, I would argue that Facebook buying Instagram was a horizontal integration.
Amazon buying cloudflare is more something I'd think is vertical but it's possible I just don't understand the terms.
[+] [-] salawat|7 years ago|reply
Although I still think the Instagram acquisition was at some level also vertical since one could argue Instagram was a more efficient delivery conduit for a certain subset of the population, and what Facebook was really out for was to pad their datasets.
[+] [-] chasd00|7 years ago|reply
[+] [-] perfmode|7 years ago|reply
Suppose one were to attempt to steelman Jeff’s statement. Is there any credible basis for this statement?
Or is it just one of those things that powerful people say because it makes them sound profound and they don’t have to follow it up with substantive supporting evidence.
[+] [-] entropicdrifter|7 years ago|reply
1) Economics are the monetary interactions of a given society, subgroup, population, etc
2) stasis refers to not just stagnation, but a complete lack of change
3) total lack of change at a meta-scale like a society only exists in totalitarian societies
4) in the case of total economic stasis, you would need a command economy/controlled economy
5) in the scenario of a command economy, some of the people involved in the economy would fundamentally need to be oppressed
6) therefore, regardless of any moral or ethical judgements, a totally static economy would be inhibiting of the liberty of any given individual participating in it
Now, that said, there are many things to be gained by limiting what people are allowed to do. By the same course of logic you could argue that all laws are incompatible with liberty, since technically the government is trying to force you not to kill people, for instance. Obviously that is still to the benefit of society even if you personally have one fewer option. At this point it comes down to the fact that laws and regulations, when done correctly, can increase the number of practical/feasible options available to a populace, even though they technically restrict some of the options that would cause a society to fall apart. People can accomplish more in groups than they could on their own due to the options of specialization and parallelizing work becoming viable when they have restrictive agreements to cooperate. That's the whole point of companies.
So this is IMO a case of him being technically correct while still not making a very deep or substantial point in the overall context.
[+] [-] davidivadavid|7 years ago|reply
If society is in a state of stasis, that means no one is allowed to do things that go beyond what society is doing in the present. That means you don't have the right to innovate, to try new things, and so on, which seems integral to individual liberty. So his statement is obviously true.
However, if you consider liberty as a social construct that means you're allowed to do things as defined by society, then whether that society is static or not is immaterial. So the statement isn't necessarily true.
And that's what you get when you make arguments about the definition of words.
[+] [-] vectorEQ|7 years ago|reply
[+] [-] swebs|7 years ago|reply
https://www.economicclub.org/sites/default/files/transcripts...
[+] [-] zwkrt|7 years ago|reply
So if our governance became static it would be safe to assume that it would be unable to adapt to changing culture. For that government to be continually effective it would then need to enforce that it's constituents' values and lifestyles are unchanging, which seems antithetical to the concept of liberty.
In practice we see this since totalitarian regimes work to suppress and homogenize their populations.
[+] [-] dnautics|7 years ago|reply
https://krugman.blogs.nytimes.com/2010/02/13/the-case-for-hi...
"even in the long run, it’s really, really hard to cut nominal wages. Yet when you have very low inflation, getting relative wages right would require that a significant number of workers take wage cuts. So having a somewhat higher inflation rate would lead to lower unemployment, not just temporarily, but on a sustained basis."
[+] [-] mindslight|7 years ago|reply
> The real constraint only kicks in when there’s too much spending relative to a limited supply of goods and services—in other words, when inflation spikes. And there’s been little sign of that in America for decades.
It amazes me that this can still be repeated with a straight face. The prices for housing, healthcare, and education have skyrocketed - many would say that the costs for these are the problem.
What is happening is that technological and economic progression are continually trying to lower the prices of consumer goods. Rather than let this natural deflation occur, the overt monetary policy is to inject new money in the consumer sector until average prices rise instead.
But this money isn't given directly to consumers as cash, but only supplied as loans through financing channels. People don't have an extra ten dollars to spend on groceries (which would make grocery prices rise), but an extra $1,000 to borrow and bid up financializable assets. The monthly payments to service the debt (sometimes called rent) are also mandatory, so their financial position becomes ever more dependent on continual income.
[+] [-] jiveturkey|7 years ago|reply
b. why is low unemployment bad? let's say we have a deflationary economy, doesn't that lead to high unemployment which is a feedback to more deflation? how is that not a bad thing?
excuse my naivete
[+] [-] gniv|7 years ago|reply
Did you mean to say "No mention of ending low inflation"?
Otherwise your comment doesn't make sense to me.
[+] [-] FiveSquared|7 years ago|reply
[deleted]
[+] [-] mruts|7 years ago|reply
[+] [-] tribune|7 years ago|reply
[+] [-] amalcon|7 years ago|reply
I do agree that it would be better to use some other denominator that does not have this problem, but it isn't a crazy decision to begin with.
[+] [-] kaycebasques|7 years ago|reply
[1] https://news.ycombinator.com/item?id=19073500
[+] [-] nabnob|7 years ago|reply
The paper mentioned in the article, "Amazon's Antitrust Paradox", is very thorough and easy to read even for someone (like me) who doesn't have a background in economics.
The key point made in that paper is that modern antitrust legislation only looks at price when determining whether a monopoly is harming the consumer, and doesn't consider scale or the effects on the overall market and competition.
>This Note argues that the current framework in antitrust—specifically its pegging competition to “consumer welfare,” defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon’s dominance if we measure competition primarily through price and output. Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational—even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.
Even though I'm a software engineer, I'm skeptical of claims that technology can help fix social, economic, or environmental problems. I support green technology, but they're not a panacea. In articles pushing green tech and sustainable energy, there seems to be this implicit assumption that we can maintain our current standard of living in a "sustainable" way. Solar panels and electric cars aren't going to prevent climate catastrophe if only 5% of people can afford them. Rather than relying on individual consumers to make ethical choices (opting into living sustainably) we need drastic changes at a state-wide level (so that choosing not to be sustainable is opt-out).
>Income inequality can be solved by educating or retraining workers for the high-tech jobs of the future.
This statement doesn't make any sense. If you increase the number of software engineers, the average wage will decrease.
Edit: Forgot to mention that tech is absolutely automating away a large number of jobs.
[+] [-] api|7 years ago|reply
The price to the consumer might not change a lot, but a lot of innovation doesn't happen when the market gets dominated by players like that.
Back to inequality -- this effect also leads to consolidation of more and more wealth at the top by these companies and to geographic consolidation of wealth in the cities where these monster companies are headquartered or have major operations. Today that's San Francisco, Seattle, Los Angeles, and New York. Due to the "law of rent" this forces up real estate costs in these cities, further making it hard for middle class people to build wealth regardless of where they live. Geographic wealth concentration means you face a choice between poor career prospects and living in a city where the real estate market takes all your surplus due to the natural spatial supply limits (land, commute times) that exist for housing.
Entrepreneurship is a major vehicle for geographic wealth dispersal and for class mobility from the middle class upward. Without entrepreneurship the ranks of the very wealthy become incredibly stagnant and almost like a generational nobility. (Europe has this problem too, though for very different reasons. In Europe the problem is too much cumbersome regulation making it too hard to start new businesses. So Europe has too much government and America has unstoppable mega-corps that crush everything new.)
[+] [-] rizzom5000|7 years ago|reply
It also assumes that there will be jobs available. Increasing the supply software engineers does not mean the demand will increase. I see this logic error all the time when people discuss solutions to income and wealth inequality. Actually, the solutions are taxation and estate taxes; but those proven solutions are rarely mentioned.
[+] [-] pizzazzaro|7 years ago|reply
I have a similar take on technology - new industries are nice, but without some serious push, each is going to take time to get started. If we wait for the "market" to drive solar panel adoption by itself, foreign competition is going to choke out domestic firms.
This list lost me at more Supply Side "Economics". Both US political parties have been trying variations on this theme continuously since 1980. As far as Im concerned, this is the problem, not the solution. The same goes for disingenuous Corporate Libertarianism, German-style subsidies, and whatever other model you can invent to pretend this still works.
The real solution? Workers need to tell their bosses, "F%$k You, Pay Me." In all seriousness, driving for Uber or Lyft is just a way to devalue your vehicle for pay that rarely keeps pace with such and gas.
Inflation continues, even as workers see their pre-inflation average wages remain constant. Its almost like the economy doesn't really include us anymore.
Your economy is struggling? Maybe you should pay us enough to participate, boss.
[+] [-] apta|7 years ago|reply
[+] [-] AnimalMuppet|7 years ago|reply
And what do you mean by "artificial" inflation? QE?
[+] [-] d_burfoot|7 years ago|reply
So a good general strategy would be for the government to make sure that, at least in the long run, the rules for each sector are tweaked to make the sector look more and more like the airline industry.
It's not hard to imagine a way for this to happen in the tech industry. We can imagine a technology sector that runs completely on commodity hardware, open-source software, and open APIs instead of walled gardens like FaceBook. This would just take a bit of political will and some smart regulations - no need to radically overthrow the system that has created so much prosperity for us.
[+] [-] chasd00|7 years ago|reply
What's sitting in front of you is so mind bogglingly more powerful than the "airline industry".
btw "..for the government to make sure that.." is asking a lot. Keeping potholes filled gives the government a run for its money.
[+] [-] om33|7 years ago|reply
We need to stop propping up 'the choosen one' type leaders and we will see change. I want boring people elected ala Merkel.
Starting all the way back from Clinton\Bush\Obama\Trump to AOC these leaders are the wrong fit to make change happen in polarized times. They are great for media rating but not much else.
I want to see a non-charismatic figure who is not evaluated by how much dopamine they produce in my head through an instagram pic or a cool speech.
I am tired of these leaders who think that's the route. They have all failed. I can't believe no one sees that.
[+] [-] magduf|7 years ago|reply
It doesn't work this way in other countries because they don't elect their executives. In Parliamentary systems, the Parliament chooses the executive, rather than that person being chosen in a popular election. So the executive only needs to be charismatic enough to win a seat in parliament, not so popular as to win a nationwide popular election for a single and critical post.
[+] [-] onemoresoop|7 years ago|reply
[+] [-] joshuaheard|7 years ago|reply
A better title would be, Tweaks that can make American Capitalism Better.
[+] [-] grecy|7 years ago|reply
And yet for decades the quality of life of hundreds of millions of Americans is lower than that of people in other, poorer developed countries.
Why is that? What's the point in having the richest country if it doesn't have the best conditions for those living in it?
Is it worthwhile just being rich for the sake of being rich, even if you get no benefit from it?
[+] [-] clavalle|7 years ago|reply
Don't let the good be the enemy of the better.
[+] [-] Retra|7 years ago|reply
[+] [-] underbluewaters|7 years ago|reply
A better title would be, How to save Capitalism before it's too late.
[+] [-] apta|7 years ago|reply
Provably false. One example is the Islamic economic system. It was famously noted that there were no more people who accepted charity during the rule of Omar Ibn Abdul-Aziz, because poverty was basically eliminated.
[+] [-] standardUser|7 years ago|reply
No wonder we can't fix our problems if people insist on pretending their aren't any.
[+] [-] pranjalv123|7 years ago|reply
[+] [-] kadendogthing|7 years ago|reply
[+] [-] neuronic|7 years ago|reply
Stop spinning this as an argument that capitalism is not broken. It's merely less broken than alternative systems and evidently only works in conjunction with heavy regulation.
Historic examples of (nearly) unregulated capitalism exist and they are horrifying.
[+] [-] fallingfrog|7 years ago|reply
But there are certain things you already cannot buy and sell in our current system, and this is key to seeing the way forward. You can't buy and sell people, for instance. That would be slavery. The purest form of capitalism would include slavery also. You can buy labor, but no more than 40 hours per week without paying overtime.
The socialist point of view on this is that it isn't just buying the life of a person that is morally wrong; buying their lives piecemeal 8 hours at a time and then arbitraging the value of their labor is wrong as well. So under socialism when people work, they work always and only for themselves or as part of a cooperative that they are an equal owner of. So they are taking part in a voluntary activity, not selling themselves. Ultimately that's the only way to fix our economic system; allowing the arbitrage of labor leads to fundamental instabilities and inequalities that cannot be resolved. Otherwise the pressures within society will continue to grow until the society tears itself apart or relieves the pressure by going to war.
[+] [-] lifeisstillgood|7 years ago|reply
As an intellectual framework this is a great jumping off point.
I hope you don't mind if I suggest you may not have originally thought of it - where can I read more?
[+] [-] chasd00|7 years ago|reply
If everything was still physical factories, staffed by humans, and creating physical widgets then I can at least understand the socialist view. However, in the current market labor so is detached from profit it doesn't make a lot of sense.
[+] [-] username90|7 years ago|reply
I don't see how this is possible without killing or even reversing progress.
Example: You work alone and make $500k a year. You know that if you had another good developer you could make a million a year. You know a lot of developers who currently make $100k a year. What is a fair pay? You might say $500k, sure, now both of you earn the same. But, then you realize that you can earn $1200k in total with yet another developer, what should you pay that developer then? $200k? Seems unfair, now he earns less than the first developer even though they do exactly the same job. Do you reduce the salary of the first developer to $350k to make it fair for both? I doubt many workers would think that reducing salary just to hire people is a good thing. Also you yourself would still earn $150k more than them, so would you reduce your own salary to $400k to make it fair? Then why would you even do the work to hire these people? Would they be happier to be stuck with $100k a year when you could easily pay them both $150k a year while still keeping significant profit? Would the world be better off with the 3 of you producing $700k total value (your $500k + their $100k each) instead of $1200k that you would produce together at your company?
Ultimately, the only reasonable thing to do is to hire people at what their job is worth for a typical company or slightly above that. Any value above that is not created by the worker but by the work creator. Then they are happy since you pay them more than they got before, you are happy since you earn money for the work of providing valuable jobs. As a bonus you never get into situations where you would like to hire a person, the person would like to work for you but you can't pay him the same as the rest of your workers since those workers are significantly overpaid compared to the rest of the market.
[+] [-] zozbot123|7 years ago|reply
The thing is that all new businesses start that way already. People, including workers, sell their shares in businesses to outside investors - sometimes even ceding their control into how the business is run, thus becoming "wage labor" at least to some extent - for all sorts of reasons. This does not make such transactions "non-voluntary"!
[+] [-] hevi_jos|7 years ago|reply
Countries that people say are Socialist like those in the north of Europe, are really capitalistic societies.
I have known plenty of real socialist countries in the world, and they only share misery. In those socialist countries, like Venezuela or Cuba, the old Soviet World, differences between those in power and those that are not are enormous, bigger than in any capitalist system.
In Venezuela for example, those in power made deals selling the gold of the country, the oil and until recently, had access to favorable exchange of currency that they sold in the black market making a tremendous profit.
In Cuba people earn a maximum by law of something like 30 dollars/month. But people in charge sells access to country resources like permission to place a Hotel or a factory and make millions. All the heroes of revolution living in Mansions in front of the sea while normal people do not have permission to change a broken electrical switch in their houses or feeding the cow in front of their house, starbing.
Cooperatives, like Mondragón in Spain or kibbutz in Israel have their own set of problems. If you pay everybody the same, the best people just get out soon.
[+] [-] simplecomplex|7 years ago|reply
How can a company avoid breaking the law if they don’t know they’re breaking it?
[+] [-] pseudolus|7 years ago|reply
That's something of a gross mischaracterization of antitrust law. The Sherman Act and other laws provide various guidelines as to what constitutes anticompetitive conduct. Through the succeeding decades since the introduction of antitrust legislation courts have also consistently built up case law that provides further guidance.
[+] [-] hn_throwaway_99|7 years ago|reply
As we like to say so often "if you're not the paying customer, you're the product." Then in the world of Facebook and Google, the customers are really the advertisers, who are forced to pay monopoly rates because there are no good alternatives. Even with Amazon the long term reduction in viable competitors is not a good thing for end consumers, and if you look at other areas (I'd consider an author a customer of a publishing house, and if Amazon rules all of book distribution it means authors are worse off).
[+] [-] thomasec|7 years ago|reply
[+] [-] clavalle|7 years ago|reply
Hell, if laws weren't arbitrary and vague depending on circumstance, we wouldn't need lawyers and courts!