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Comment by rtpg | Hacker News Reader

I understand the dangers of monopoly, but I wish there was a stronger argument here.

We've seen this sort of thing happen before, with Walmart. And none of these arguments worked! Walmart is big and dominant. It killed off smaller places, but people don't care because it has mostly everything and is cheap.

"This convenient good thing is actually bad!" isn't super convincing I guess....

EDIT: the ultimate irony being that Walmart/Amazon are the "ideal endgame" of market capitalism. Razor-thin margins everywhere, people get things cheap.

But how do you get cheap goods? Pressure suppliers, pay workers as little as possible. The _best case scenario_ for this economic model leads to a terrible status quo. And the only difference between this and other industries is the size of the slice of the pie the C-suite gets.

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And before Walmart there was Sears, the unstoppable behemoth of its day.

Few remember today the fear that people had of the unstoppable juggernaut that was IBM before 1990 or so.

Nobody remembers that before IBM there was RCA.

the _best case scenario_ for this economic model leads to a terrible status quo

Terrible status quo? You realize that competitive pressure is what drives progress right?

> Terrible status quo? You realize that competitive pressure is what drives progress right?

We know that that has been true in many cases, but we don't know that it always will be true in all cases. For example, I don't think there's a very good argument that competitive pressure has led to a super high quality healthcare system in the US vs. the rest of the industrialized world. Competitive pressure optimizes for certain things, and those things are not always what is best for the public. Especially, if "competitive pressure" is applied by a trust, it can cause market failures.

I don't know that Amazon is that. Maybe it will be. But, last I checked, we do still have ground floor retail. I think there's an equilibrium that we'll reach at some point, where retail space commands lower rents and has to provide a high quality shopping experience. The Best Buys of the world are done for, but the Nordstroms are not.

> I don't think there's a very good argument that competitive pressure has led to a super high quality healthcare system in the US

That's because there really isn't any competitive pressure. Not for consumers anyway. The way our healthcare is tied to our employment means we get little choice in providers ourselves, leaving that decision to our employers, who probably don't have our best interest at heart.

The supply of doctors in the U.S. is tightly controlled by interests best served when the supply is limited. This is not competitive pressure.

Allow doctors to be "certified" by private organizations, then watch how quickly medical schools change, residency allotments open up, and doctor ranks swell. As the supply of seats in medical schools and number of residencies rises, the cost of medical school will decrease. More doctors with less debt will put downward pressure on medical prices.

You may argue that quality would not increase under such competition, but I disagree. People who can't afford healthcare would be able to afford poor quality healthcare which is better than they currently enjoy. Rich people will still have vanity certified doctors. In general the cost of comparable quality healthcare would be lower.

TLDR; don't complain about disappointing results of competitive pressure in a market with very limited competitive pressure.

Sure, I like that I can start a company if I think I can do better than some other company. There are capital issues and incumbency issues, but in a lot of smaller industries you can "make the world a better place".

But on an ethical level we have to acknowledge that "letting the markets do their thing" doesn't automatically reach the best result. Me having all the money and you having none is a Pareto optimum, after all.

If we could make many people's lives better at the cost of a tiny bit of progress, we should consider it.

There's also the fact that progress isn't a line. Native ads are "progress". Bail loans are "progress". Employer-based health insurance is "progress". Society can make decisions that go beyond what makes people more money.

The tricky part is who defines what is 'better' or 'best'? You? Me? A 50.1% majority? The word 'progress' is infected by the same arbitrary nature.

The free market is an equilibrium that represents an average of all of our subjective needs, wants, and judgments. No individual will ever see all of its outcomes as ideal, but any attempt to 'correct' it will necessarily favor one person's values at the expense of someone else's.

One person having all the money and no one else having any money is a Pareto optimum. It's an equilibrium in a purely mathematical sense, but not the equilibrium we aim for as a society.

A change might come at the expense of one person, but can potentially help many more.

A 50.1% majority does seem to be what we use to decide things (with some edge cases meaning sometimes you need more , but rarely do you need less). One person, one vote and all that. Systems not perfect but it's a lot better than restricting to property owners

AT&T and DARPA were monopolies when transistor, the Internet were invented, no?

My doubt is about these economic theories. I worry about the many dangers with Amazon's burgeoning monopoly.

DARPA is a government agency.

sure, that makes it state-managed monopoly or whatever else you call it; keeping to the topic, any competition?

What did DARPA have a monopoly over exactly? They were and are a defense research agency.

Late Columbia professor Seymour Melman demystified this in his book "Pentagon Capitalism" back in 1970. And, for a summary, http://www.thirdworldtraveler.com/Chomsky/PentagonSystem_Cho...

A lot of preconceptions may be in the way though in trying to understand this.

People forget that just 20 years ago - August 1997 - Apple was on the verge of going under. Microsoft kept them afloat with a massive (at the time) $150M purchase. Microsoft was in the middle of their anti-trust fight so they couldn't afford to lose a "competitor" no matter how absurdly mismatched they were. iMacs, iPods, and eventually iPhones fundamentally changed everything.

The economic behemoths regularly change shape, form, and function and others replace them. Believing that we're at the final result of everything seems misguided at best.

> Microsoft was in the middle of their anti-trust fight so they couldn't afford to lose a "competitor" no matter how absurdly mismatched they were.

That's one possible explanation. I think a much more plausible explanation was that Steve Jobs needed a significant amount of capital infusion to turn-around Apple but he needed the terms to be reasonable, which was why he leveraged on his longstanding friendship with Bill Gates even though they were (unequal) competitors at that time.

It's next to impossible to get any form of capital for a dying company, whether debt or equity without having cut-throat clauses included to protect the investors' capital.

Jobs had leverage in the form a long-running lawsuit that he agreed to drop in exchange for the investment:

"In a remarkable feat of negotiating legerdemain, Apple co-founder Steve Jobs got needed cash — in return for non-voting shares — and an assurance that Microsoft would support Office for the Mac for five years. Apple agreed to drop a long-running lawsuit in which they alleged Microsoft copied the look and feel of the Mac OS for Windows and to make Internet Explorer the default browser on its computers — but not the only choice."

https://www.wired.com/2009/08/dayintech_0806/

> competitive pressure is what drives progress

Except when it doesn't. It's perfectly possible to have, for example, a bunch of scientists crazy motivated to learn the answers to their questions and all collaborate as cooperatively as possible toward that end. Adding competition could result in duplicated effort, secrecy… or to added pressure and motivation… I mean the one thing we can say is that there's no guarantee that competition is good or bad for progress, it depends on so many factors.

You can reasonably say that competition can drive progress. Your sentence implies that it is the primary (or sole??) driver of progress, and that's nonsense.

Consider Richard Dawkins' tree analogy: competition is what drives trees to become super tall, but that means they spend tons of energy doing that. Being tall in itself has no value to the trees. Yes, evolution inherently creates ecosystems around tall trees, but that doesn't mean that particular ecosystem is somehow better than other possibilities. It's more true that competition is just a fact of life rather than that we know it to be good or bad. There are tons of cases where reduced competition and increased cooperation can provide more progress.

It would be fascinating to know which factors make cooperations and which competition strive. Families and circles of friends quite likely work better on cooperation, large amount of anonymous actors like our economy probably with competition. Countries utilize both. In Star Trek on the Enterprise there seems to be mostly cooperation happening and it is very believable to me. Very interesting topic. Does anyone have good resources about this?

>> competitive pressure is what drives progress

>You can reasonably say that competition can drive progress. Your sentence implies that it is the primary (or sole??) driver of progress, and that's nonsense.

actually competitive pressure is the primary driver of evolution. Some aspects of evolution when applied to humans we call progress.

>There are tons of cases where reduced competition and increased cooperation can provide more progress.

cooperative behavior in a group evolves when it helps the group to compete, and thus it may result in increased competition between the groups. Organized human society would be an obvious example of cooperative behavior. Massive battles and wars and other atrocities inflicted by the human societies upon each other, and overall effect of the human society upon the rest of the Earth species doesn't seem to qualify as reduced competition. If anything, increased competition between organized human societies, like wars for example, has significantly sped up the tech progress as a result of the need for weapons development.

Sounds a bit circular, are you somehow saying the definition of "the primary driver of evolution" is "competitive pressure"?

> Some aspects of evolution when applied to humans we call progress.

And that is key. Indeed, competitive pressure drives evolution (but isn't the strictly sole driver or the mechanism of evolution itself). The most important point is: evolution only values survival/reproduction, it doesn't value "progress".

There's a very strong argument that humans now understand evolution enough to make conscious decisions not to just play the natural competitive game. We can actually make a better world by refusing to follow that natural game. Life in competitive natural circumstances is brutal, painful, and short. We value progress as in human (and non-human even) flourishing, happiness, scientific progress, etc. and we get those things best by refusing to just act like competitive evolution but instead by rising above that. For example. we have no evolutionary benefit in caring for the least among us as an entire global human society but when we do so, it's because we recognize the ethical value.

> competitive pressure is what drives progress

Up to a point. E.g. in non-equilibrium thermodynamics systems can change from negative feedback and stability to positive feedback - finally they explode and reorganise themselves. Like society or the market. Nice model, as long as we are not in the middle of such an explosion.

Most of the giants today actually thrived without the competitors and were stunted only because of it. Who were the legit competitors to Amazon, Google, Facebook, Tesla? They grew into monsters without that competition, which is why they try to keep each other in check. Google made a social media platform and Microsoft made search engines.

And that competition made the opposition better, the argument goes. Except it didn’t.

Amazon: Barnes and Noble

Google: Yahoo!

Facebook: MySpace

Tesla: The Automotive Industry

Those were nowhere near the same level in quality and weren't competed with. The market needed the better solution.

Do you mind defining progress?

Is the eradication of small business in favour of cheap mass delivery progress?

It probably looks like progress on Amazon's balance sheet. But I doubt everyone in the supply chain is as happy as them.

Going off of your Walmart comment, I must say that company has shown the world what logistics can be. They have brought RFID to the state of the art, such that an entire container can be inventoried at the loading dock automagically. Amazon has 10X as many innovations, and keeps many of them pretty out in the open. I agree will OP’s chilling assessment, but appreciate the effect of innovation at scale on the rest of the world.

ideal endgame

It doesn't make it the ultimate endgame though. For example, Marx would say then the workers rise up, institute a state with differing priorities and either provide guiding regulation or take over Amazon and increase wages. We shall see!

I think Amazon has one major advantage over Walmart: they don't care about profits and generally run things at break even. This in itself is super powerful, b/c Amazon investors can take their profits by selling the stock (e.g. capital gains) whereas Walmart needs to pay dividends from profits.

A decline in profit will lead to a significant hit in the stock price for Walmart.

Let me add, not only are people paid very little, but they have no ownership (in the legal sense or otherwise) over the company they work for, and have less autonomy, which I believe leads to a less fulfilling work life.

We similarly give up our privacy in exchange for convenience. Even tho we know its bad, Its just too damn convenient and easy for the majority of the population.

which is why btw why Adam Smith (yes that Adam Smith) wanted a strong government to balance these interests out against agreed upon social standards.

Consider software. Free market capitalism has driven the price of it to literally zero! How amazing is that?

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