He also says bad rules have led to monopolies as well (through regulatory capture, lobbying, etc.).
So bad things (like monopolies) can happen due to the state or due to lack of the state. Maybe the problem here isn't the state at all.
I think IP laws and patent wars are a lot more salient when it comes to hardware (like Apple, Samsung, Motorola, etc), less so for those 3 examples.
And in any case, many tech giants exist around natural monopolies, either in network effects, either obvious ones, or those from two sided marketplaces or simply economies of scale.
Yes, network effect is a huge part of the problem. So much in tech requires user adoption, and typically users won't adopt until others adopt, thus creating chicken and egg problem. Overcoming the network effect is extremely difficult, as we've seen from competing platforms trying to unseat facebook and twitter (tho network effect is not limited to social networks, but they are the most obvious examples)
In fact, many people in China attributes Tencent's growth to its shameless copying of other people and companies' work and products. If that kind of view is true, than China's monopoly comes out because of lack of IP protection.
I would say it can be, but more importantly, it doesn't have to be:
> Well okay, there's plenty to blame the government about, but the government is the one institution that people can change... the one institution that you can affect without institutional change. That's exactly why all the anger and fear has been directed at the government. The government has a defect - it's potentially democratic. Corporations have no defect - they're pure tyrannies. So therefore you want to keep corporations invisible, and focus all anger on the government.
-- Noam Chomsky
And even if consumers are to be able to "vote with their wallets", if workers are supposed to to have a choice of employer and certain protections, there needs to be some regulation that goes for everybody, and is enforced for everybody. It's not going to happen out of generosity, or consumers researching everything on their own. How would you even make sure the food you eat is not toxic? Not that regulations make it 100% safe, but they can be a lot more efficient and very helpful, just like they can be horrible and backwards.
I really think a major obstacle is that people see government as something that acts on them, instead of something through which they ideally would act together as equals and improve their lot in a way that transcends the scope and lifespan of the individual. Yes, there is a lot of corruption, but the thing is, that's something one can get to work at -- when it comes to (some) corporations, it's too often consumers talking about them amongst each other, "hoping" things will change as they often get worse.
> People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
-- Adam Smith
When drug dealers or street gangs carve up territory, you might call that a form of local monopoly, and it comes from people themselves, no state intervention required. Usurping parts of the government for that purpose is something bigger gangs or corporations may do (also see "War is a Racket"), but it's not technically required I would say.
If something is almost a government, but not quite, and creates a monopoly, that would I suppose technically be a counterexample to the claim that monopolies are all caused by governments. However, while it would demonstrate the claim to be false, it wouldn't demonstrate that it is far from being true.
However, I wouldn't claim that all monopolies are all from government or nearly from government. I probably wouldn't even claim that almost all monopolies are.
Mao gave a very concise yet accurate description of this state of affairs: "political power grows out of the barrel of a gun".
And Mao didn't know shit. Violence is for those who do not have power.
> All political institutions are manifestations and materializations of power; they petrify and decay as soon as the living power of the people ceases to uphold them.
-- Hannah Arendt
Yes, in practice, it's threat of violence rather than actual violence doing the trick most of the time. But the reason why that threat is respected is precisely because the violence behind it is very real, and we all know it.
And this all has nothing to do with majority rule etc. A gang that has most neighborhood residents as its members is still a gang. And when gangs do get formed "for protection of both the group and the individuals", they still need to use violence (or threat of violence) towards that goal, oppressing those that would oppress them otherwise. So you might end up with a "good guy with a gun", but it's still a guy with a gun. Remove them, and government becomes an advisory council, making recommendations rather than laws.
I don't think tried to understand the distinction between power and violence that Arendt makes.
How does potentially getting arrested for breaking a law prove that political power comes from violence?
> Yes, in practice, it's threat of violence rather than actual violence doing the trick most of the time. But the reason why that threat is respected is precisely because the violence behind it is very real, and we all know it.
It can just as well be a mutual and voluntary agreement. It's not like people who don't rape or murder usually all just refrain from that because it's illegal and would be met with violence, so I would argue the opposite is also true, we made certain things illegal so we can deal with it in a structured manner where the laws ideally apply equally to each. Just like children don't just obey or imitate adults out of fear, just like many open source projects are successful without any threats.
The "violence" in "monopoly on violence" isn't any more sinister than the "road safety regulation" in "monopoly on road safety regulation", at least insofar every affected individuum is part of the entity that has said monopoly.
> So you might end up with a "good guy with a gun", but it's still a guy with a gun.
Yes, and? You just keep stating that as if it means something. What is your point, in relation to my original point of government being ours in principle, and being changeable? It's not like that there is no gun if you don't have a "good guy with a gun", that gun is a given, so why even bring it up?
If it were a completely mutual and voluntary agreement, then you wouldn't need a government as such, or laws, or any enforcement thereof. And that would be an anarchist commune, not a state.
Any place that has laws, and penalties for breaking those laws, has an implicit threat of violence against law-breakers - it's really that simple. And if it is making that threat at all, it's because it expects the law to be broken by some.
> The "violence" in "monopoly on violence" isn't any more sinister
I didn't say anything about it being sinister in principle. It's only sinister if it causes more violence than it prevents.
> What is your point, in relation to my original point of government being ours in principle, and being changeable?
I was specifically responding to another person saying that "a gang is a little bit like government", further expanding on that. It was not directed at you or your comment.
(I am currently too much of a statist to really reject the idea of a state being "legitimate" , in a way that probably distinguishes it from gangs in general.)
But what stops an aggregator from offering to put your ad on multiple search engines, so you pay for clicks from Google and whatever other search engines people are using? There may not currently be a lot of extra clicks available that way, but it's more than nothing, and you'd benefit from whatever improved competition might come up, and incidentally give it more resources to improve with and to cut Google's margins to your further benefit.
AFAIK this isn't happening, but why? Is there another moat I don't know of?
Well, Adsense / Analytics is another. Google can track you across the internet, and offer that information to search query bidders. If you don't want to bother spending money advertising to people who read HN, it's achievable. Less so for say, Bing or Yahoo. Being able to target better than other platforms alters your willingness to pay to advertise there vs elsewhere.
I suspect they also have a better grasp of the value of traffic acquisition. They pay a lot of web related tech firms to use their search engine over competitor's. We know the only time they lost a bid for Firefox's search placement was when a former Google executive was working for a competitor. It's not clear whether Marissa brought Yahoo some better insight into the value, or if she just needed to accept a higher risk of overpaying for traffic.
* Apple is able to charge a premium on iPhones relative to the best non-Apple alternatives because a lot of people are willing to pay it. (Do they have a monopoly on smartphones? Definitely not; there are loads of companies selling good phones. But they have a monopoly on their smartphones.)
* Fast food joints are forced into heated low-margin competition with each other because they're pretty interchangeable. If McDonald's starts charging too much, people will just shrug and buy basically the same food from Burger King.
* Classic monopolies are extreme cases. At one point if you wanted telephone service in the US you either paid whatever AT&T was charging or you didn't get telephone service.
When people hear Thiel's comments they tend to think of classic monopolies, but most of the examples he gives are of companies that have plenty of competitors -- and a durable advantage that they can use to maintain decent profits margins without customers jumping ship.
Sure you could use one of the alternatives, but then you won't get the content/people/apps/audience/... that are on those large platforms, which makes them basically useless.
Energy, agriculture, transportation - all built on the unintuitive building blocks of physics, and our approximate understanding of the universe. The clean abstraction layers and separation of concerns in IT is unparalleled, with powerful positive feedback begetting further innovations.
Applying advances to other fields also grew economies of scale rapidly, supporting innovation while barriers to entry were low. We're now approaching the end to low-hanging fruit and maturing into the consolidation phase, as further innovation requires greater capital and time commitment.
I spotted this (IMO badly mistaken) view of his when he first came out with it quite a while back:
Pay to drive the premium roads when you’re in a rush, or take the discount lanes with advertising printed along the roadway.
We could have quiet, porous asphalt with better water absorbtion. So many fantasies, I digress.