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Comment by hwillis | Hacker News Reader

There's one anti-corporate idea that I've always thought was interesting but AFAIK isn't discussed by anyone: small-corporation libertarianism. In general libertarians are too concerned with government but almost all of them (plus neoliberals and many financially conservative folks) can agree that competition is at least one of their most important economic tenants. Competition is balanced against economies of scale etc. but those are totally level after you're making millions of a product.

It's just weird that there aren't at least some voices arguing strongly that super-large companies (not even conglomerates) like google or apple should be split up for economic growth.

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That was the norm up until IIRC reagan, Bush 1.

The reason we switched off of it, was around that time, the idea was the allow more consolidation at the expense of competition.

The rationale was that the American marketplace was already significantly competitive, to the point that market growth was labor constrained, as opposed to today, where it is capital constrained. So by allowing more merges and decreasing overall competition, you could achieve multiple simultaneous goals. You could lessen the labor constraint on the market, allowing faster growth and more capital accumulation at the expense of labor, but without significantly impacting quality of life for the laborers. Additionally, the decrease in competition and increased allowance of outsourcing and international IP enforcement was expected to (and did) lower the cost of goods for many American products.

The end result was: The rich got richer. Everyone saw the price of goods drop (or the quality of goods increase, or the rate of inflation drop). And big companies became larger, faster, with minimal impact on quality of life for everyone.

The problem, is we've been doing that for 40 years now. We're back to a capital constrained economy, but capital interests have been keeping us pursuing the above agenda as if nothing has changed. Its absolutely a ripe time to go back to the pre-70s ideas about trust busting and etc, in the name of increased, local competition, as opposed to the current ideology of increased corporate merger in order to achieve greater economies of scale.

At least, this is how it was explained to me. I'm just a dev : )

Who explained this to you? Do you have any books, research papers, or documentaries I could look at on this topic?

This has to be one of the most insightful comments I've read on the topic of large conglomerates and the American economy.

Not OP but here is an overview of the (now deceased) architect of current US antitrust policy, Robert Bork. https://www.washingtonpost.com/news/wonk/wp/2012/12/20/antit...

Interesting, I never thought of antitrust as a scale, or that it should adapt to the state of the economy. I just thought monopolies are bad.

Monopolies are bad but "perfect competition only exists at the point of collapse" [1]

A benevolent monopoly can be OK but both of the extremes of competition come with instability.

[1] I put that in quotes because I thought it was a famous well-known quote but I can't find the original!

And excessive competition creates stagnation at local maxima. If you're engaged in a price war you have no profits to invest in R&D.

One of the things that works really well for this is to split monolithic national regulatory codes into less complicated region-specific ones.

California needs earthquake rules, Florida needs hurricane rules, Colorado needs altitude rules, etc. If you have one national code containing all the rules, you give the advantage to huge conglomerates that can navigate them all at the same time. A small company in Colorado has to comply with all the irrelevant rules covering earthquakes and hurricanes, which puts them out of business.

But if they each have only their own regulations, smaller companies can survive the ones in their home state -- and have more power there to address them if they're oppressive. So you get a different company in each region instead of one big national one. They put competitive pressure on each other because any who charged too much would make it worth it for one of the others to pay the regulatory cost of expanding into that region, but not so much pressure that everyone is locked in a price war and no one has any surplus to invest in the future.

I think the 51% attack of bitcoin is a similar phenomenon. If someone owns 51% of the market, trust from outsiders/customers is basically destroyed. At that point the dominate player can systematicly destroy the competition through pure economic power.

It may have been accelerated by the fear of global multinationals besting American firms. NTT, Deutsche Bank, Siemens, RDShell, etc. American firms were being challenged by bigger international firms --and WTO/NAFTA encouraged firms to get bigger and compete overseas rather than just protect the home country from foreign competition as it had been up to that point.

It's weird in a larger historical sense, but in a contemporary sense not so much. The US has moved radically rightward since the 1980s, and that only got kicked into higher gear since 9/11/2001 once 'patriotism' or 'security' could be tapped any time to shut down critics. It's not just a difference of opinion when you can claim it's some sort of existential threat.

From my perspective, it looks like we're in some respects in a similar situation as we were 100 years ago. Huge advances in technology have made individual workers radically more productive. Assembly-line manufacturing then, computers and Internet now. And just like back then, while everyone predicted a future of shorter work weeks and less work, employers drive employees harder, and pay them less, while society says "the machines do the real work." There is one big difference though. Back then it got solved by the New Deal stepping forward and forcing companies to essentially give their workers a 600% raise basically overnight. Going from employing a whole family, children included, 16 hours a day 6 days a week and paying them barely enough to feed themselves... to 1 person working only 40 hours a week and being paid enough that the entire family could be comfortable on just that one income. Suggesting such a socialist solution back then would elicit discussion. Nothing of the sort can be discussed today. One whisper of the word 'socialism' is followed by 'communism' and all discussion is aggressively ended.

> Suggesting such a socialist solution back then would elicit discussion. Nothing of the sort can be discussed today. One whisper of the word 'socialism' is followed by 'communism' and all discussion is aggressively ended.

Indeed. That's because the specter of "Communism", aka Dictatorship was the eventual downfall of Marx's idea of Capitalism->Violent Overthrow->Dictatorship->Stateless and Classless Communism. The problem has always been, that when people get power, they don't want to relinquish it. Therefore, all Marxian applications of Communism end in this failure mode.

There are other ways to apply Communism. I type this on a Communal Operating System. Linux. There are no gulags of forced developers making all the code I use to type this. It's all voluntary, and free for all to use and partake. The only rule is to respect the community- in that if you use code, it has to be under the same license.

I could see a Benefit Corp do something similar - taking the ideas of ownership and lock them in a public trust. That way, people know what they're "buying into", but it's also not the prior forced dictator knowing what's 'right'. The Story of Manna by Marshall Brain puts this idea eloquently in his short short.

Perhaps it's time to quit using the word "Communism" because, frankly, Marx guessed wrong and tens of millions died in furtherance of that specific ideal. But the underlying ideas that we are stronger together is something that many of us understand. But it all has to do with preserving the individuals' and the groups rights. And, that's a hard balance to keep.

> I could see a Benefit Corp do something similar - taking the ideas of ownership and lock them in a public trust.

And a regular corp do something similar to "communist" dictatorships. Planified economies, highly specialization and a charismatic CEO as the ruler.

It may be that multinationals long ago exceeded soveign states as dominant political powers. As in the days of the East India Company.

So it's not a question of reigning them in, that horse has bolted.

It's complicated in a global economy. Our companies are competing against massive corporations in China, India, Russia, not just against each other. It makes sense for local things like telcos, but less so across the board.

Well on the left they get silenced when they get too loud (evidenced by the post) I'd bet the same happens on the right. Lots of the biggest funders of libertarian think-tanks are also big corporate donors or individuals who made it rich on the back of a big corporation so I'd expect what happened to Barry and his group here is liable to happen to libertarians of the same mindset.

>all of them (plus neoliberals and many financially conservative folks) can agree that competition is at least one of their most important economic tenants

Note that this isn't true. Lots of free-market mindset people (libertarians and otherwise) believe that if a monopoly can provide a lower price then that's all that matters. That's part of the reason we're in this mess in the first place.

Er... I'm not sure why anyone would believe that monopoly could provide a lower price. The only problem a monopoly solves is whether the good or service is to be continuously available in the market or not.

You might allow a monopoly if the alternative is periods of competition interleaved with periods where there are no firms left in the market at all. If you choose to grant a monopoly, prices will be higher, and supply more constrained, but the good or service will always be available to the highest bidders. You're never going to get a lower price out of one, unless the owners are impossibly altruistic.

Many people think a monopolist could provide the lowest possible prices. However, anyone who thinks a monopolist would provide the most consumer surplus has an opinion that's at odds with the consensus.

Wow. That's a really polite and diplomatic way to describe "completely crazy". I might just re-use that wording myself.

> should be split up

It may be weird that no one is arguing that (maybe it's just no one you're listening to, or being allowed to listen to, though?), but it's not weird that it's not libertarians. The notion that some people shouldn't be allowed to form voluntary associations with others because they got "too large" is anti-libertarian.

That said, "libertarianism" and "anarcho-capitalism" are becoming too synonymous. As a libertarian (but not an ancap) I have no love lost for big corporations; I wholeheartedly agree with your sentiments that monopolistic corporations are bad for society in general. However, because we must stand on principles instead of feels, the relevant principle here is that we have no right to interfere with others' affairs simply because they've chosen to pool their resources into free association, massive or otherwise (assuming they are not interfering with others' liberties, and I don't think there's a genuine argument now that they are).

All hope is not lost, however: there is reason to believe that these monopolies derive much of their monopolistic power through the state (e.g., via regulatory capture) and thus by reducing the power of the state we will actually achieve the desired benefit (breaking up monopolies) without infringing on anyone's liberties.

>All hope is not lost, however: there is reason to believe that these monopolies derive much of their monopolistic power through the state

How has google derived monopolistic power through the state?

Google can afford to break the law, small businesses can't.

https://www.cnbc.com/2017/06/27/googles-1-billion-fine-what-...

Google broke the law because it was profitable to do so and I'd wager that google came out ahead even after the fine.

To the extent that we make it lucrative to break the law, we favor those who can afford the punishment over those who can't.

I have been assured by innumerable statists that the government invented the internet.

But I'm not sure in what market exactly Google is a monopoly? I'm pretty sure there are plenty of advertising and big data companies doing just fine.

You're not sure in what market is Google a monopoly? Searches, for one, internet video as well... If the trend continues, web browsers as well (Chrome is fast approaching the level of usage share as IE at its peak).

Those aren't products. Google's main products are advertising and user data. They can't be monopolists in markets they're not even participating in.

Google doesn't participate in the search engine market. Got it. Makes perfect sense.

Anti-trust laws are about leveraging your monopoly in one area of the economy in order to gain an advantage in another.

There is nothing wrong with having a monopoly per se as long as it was gained and maintained fairly.

And by "fairly" you mean literally any business tactic which does not rely on the government?

Why must we stand on principles?

>It may be weird that no one is arguing that (maybe it's just no one you're listening to, or being allowed to listen to, though?), but it's not weird that it's not libertarians. The notion that some people shouldn't be allowed to form voluntary associations with others because they got "too large" is anti-libertarian.

Libertarianism as a moral structure is a belief in economic freedom for it's own ends. Like you said that really describes ancaps better. 99% of the time that's not what people mean when they talk about libertarianism, they mean libertarianism as an economic structure. That's still essentially a belief structure, but it's the very specific belief that economic freedom is the best way to create economic efficiency. The anti-authoritarianism comes from the fact that the government has special privileges (derived from enforced unionization of citizens) and is overwhelmingly powerful (derived from police power + spending comprising 21% of GDP). ANY large corporation will have that power- including Walmart (if its revenue was 10x higher), Apple (20x) and google (50x). Even a small corporation can, in a company town. Any libertarian should be against those things just on the principle that the rights available to any corporation should be equal. Having more money shouldn't "unlock" rights any more than having very little (welfare, progressive taxation, etc).

I think the primary reason this is ignored is just ignorance of the methods and power wielded. Anarcho-capitalism is significantly less popular than libertarianism exactly because the moral beliefs are significantly less palatable. Very few people think that the poor should starve- I believe that most libertarians do honestly think that in an ideal world, livable work would be available for anybody with anything to contribute.

>However, because we must stand on principles instead of feels, the relevant principle here is that we have no right to interfere with others' affairs simply because they've chosen to pool their resources into free association, massive or otherwise (assuming they are not interfering with others' liberties, and I don't think there's a genuine argument now that they are).

That's... not admissible in any libertarian philosophy I'm aware of. That definition admits governments in their entirety, or close to.

>All hope is not lost, however: there is reason to believe that these monopolies derive much of their monopolistic power through the state (e.g., via regulatory capture) and thus by reducing the power of the state we will actually achieve the desired benefit (breaking up monopolies) without infringing on anyone's liberties.

That statement is in opposition to history (monopolies were larger when there was less government involvement), economic theory (noncompetitive practices are econ 101 and happen without any government), evidence (increasing amounts of money pretty clearly give a disproportionate amount of power) and common sense.

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