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Comment by lotsofpulp | Hacker News Reader

This is the inevitable result of efficiencies of scale. With computers, databases, instant communications, why would a business be restricted in anyway to expand as far as it can once it has perfected whatever it is selling.

In the long run, it would be beneficial for all consumers to be able to select from multiple sellers, but in the short term, it's beneficial for each consumer to purchase from the whomever is giving them the best value. That means everyone uses one of the top few banks, one of the top few retailers, one of the top few electronic device manufacturers, etc.

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I think what it comes down to is the appropriate amount and type of regulation that suits the market. As market concentration happens, those corporations must necessarily become more regulated to ensure consumer choice and employee rights.

The less concentrated the market, the less regulation required because natural market forces will have larger impacts. Once a corporation reaches a significant size, they largely outgrow the market being able to influence them in a large way, hence the need for more (and stricter) regulation.

Monopolies, if well-regulated, aren't as evil as they seem.

Do you think monopolies like PG&E in California are well-regulated? If not, could you tell me why this isn't due to systemic difficulties in setting up a well-regulated monopoly?

EDIT: I should put my thesis in here: It is easy for regulatory capture to happen in the case of monopoly and regulator. I would also expect the monopoly plus regulator to perform more poorly than either a competitive company or a public entity.

Regulation generally is not the same as regulation specifically related to antitrust. You can create a well regulated monopoly where none of the regulations are designed to prevent negative effects of being a monopoly.

The hardest part of regulation is not erecting artificial barriers to entry.

There are a lot of examples where regulatory capture happens to ensure that a near monopoly can comfortably maintain its position, and it strangles competition from startups.

Target antitrust.

We want to benefit from efficiencies of scale while decreasing the size of every company's "moat". That is, consumers would benefit most if it was easy to start a competitor if/when the top bank/retailer/etc tried to take advantage of its position.

> That means everyone uses one of the top few banks, one of the top few retailers, one of the top few electronic device manufacturers, etc.

That may explain Google search, but not e.g. Luxotica, which is a monopoly in eye-wear. I'm not sure how much of the centralization is of the "I go to the best provider for me" kind, vs. the "Katamari Damacy" style, but the former is only good for customer in the short term, and the latter not even then.

Free markets and democracies are good at a lot of things, but self preservation is not one of them - that has to be applied from "outside" the system, early and often.

This is why junk yards and small businesses are a true blessing. I can pay someone $500 to put a $1000 engine into my car and get another 100,000 miles out of it, rather than "sorry that's not allowed, please go to the dealership and buy a new car".

In some countries, said behavior is literally illegal or impractical. Killing small business would be the death of capitalism and freedom.

"Killing small business would be the death of capitalism and freedom."

Capitalism and capitalists would be fine. They would just operate in a non-competitive market. Which is preferred anyway once you have a dominant market position.

Preferred by the monopoly and nobody else, is what you mean, yes?

Which is to say it is against the will of the people,

Are you asserting that capitalists care about freedom and the will of the people?

Crony capitalists (what I would call mercantilists) certainly do not care about the will of the people. They are tyrants who hide behind a word they are corrupting.

However I will defend to the death my right to exchange goods with you. I'm assuming you and I are just normal citizens who don't control multi-billion dollar businesses?

I'm going to use the first definition of capitalist I found on google:

"a wealthy person who uses money to invest in trade and industry for profit in accordance with the principles of capitalism."

As we know there is a huge spectrum of investment strategies, from VCs to Bond holders etc.

Some capitalists like VCs, absolutely value market freedom, others likely don't, but it's too large a swatch of people to generalize by saying they don't care about economic freedom.

Which behavior is illegal? Consumers are choosing to patronize businesses that offer them the benefits of efficiencies of scale.

I am not sure of the current regulations but engine swapping in Sweden and other modifications were completely illegal since the 90s and basically what Americans consider to be normal and acceptable is flat out not allowed on the roads in Sweden by police or inspection authorities.

This means that 100% stock vehicles are in demand, and Volvo and Saab and BMW benefit heavily compared to a modified Jeep, which would make more sense for Sweden's enthusiasts

Sometimes. I'm totally unhappy with spectrum formerly time Warner. They're awful and I have no choice. I'm also super happy with my sewage and I have no choice. The danger is that we get de facto monopolies like Google and wind up paying $5 for a mouse click and we really have no other options.

I'm not sure it's fully from efficiency of scale, especially outside of manufacturing. What I keep seeing is using one's size to keep out newcomers as the most important factor. You have more patents and more lawyers and can accept financial losses longer on specific products to keep them out: products A and B subsidize C when C is threatened. And you can bundle multiple products into "special deals" the way a single-product producer can't. And there's the network effect that social networks use: you need more customers before you can get customers.

In short, economic bullying.

Since the early 80's I've watched Microsoft grow, and don't see it about raw merit at all. It's poker, not chess.

Amazon is the archetypal example. They didn’t litigate their way to dominance. Amazon is just better than all the mom-and-pop alternatives, and that is fueled by technology and scale. Wal-Mart is another example, except optimizing for price. Apple is another.

I'm mostly talking about after one gets dominant, not how they got dominant. Microsoft was already dominant in PC software by the late 1980's.

you're suggesting we optimize along a single axis of a (probably infinite) multidimensional system.

the simplistic retort would be that "value" condenses all that complexity down into a single metric, but we know how well optimizing for one metric works out. we get all kinds of distortions and mis-aligned incentives. we might even name that class of problems "externalities".

the corporate free lunch ain't free. bigness gets paid for by us little people being subjected to thousands of small cuts (decision short-circuiting caused by information assymetries, paying usurious fees on loans, etc.). don't fall for that duplicitous platitude.

I'm not suggesting we optimize along a single axis, I'm stating what the reality is. Short term, it makes sense for each individual to use Costco/Target/Walmart/Amazon/Google/Apple/BoA/Chase/Nordstroms/Trader Joes/Aldi/United/Delta/American/Hilton/Marriott/Home Depot/Lowes/AMC/Regal/P&G/J&J/Conagra/UPS/FedEx etc. These big organizations have achieved efficiencies of scale (and political clout) to be able to offer services at a price that others can't. Long term, we are ceding pricing power to fewer and fewer sellers (and buyers on the labor side), but I doubt people will stop and start giving business to the local retailer or bank or hardware store, if they still exist.

Obviously, I'm not talking about infrastructure monopolies as the consumer has little to no choice there between things like mobile/internet/electric/gas/water/sewer/waste removal providers.

but it also "makes sense" to patronize small and local businesses over large businesses if you care about anything (any other axis) other than just price (a single axis).

your argument is a form of reductio ad absurdum because you're saying your preferred option (buy from large corps) is the only smart and practical choice (so why consider anything else?). but people (like me) choose differently all the time.

with that said, yes, people do take that shortcut (limit choice to large corps) because it's less cognitive load in a world overloaded with moneyed, attention-seeking (self-)promotion, but that certainly doesn't mean it's the best or only choice given the plethora of considerations.

Monopolies are not beneficial for customers. They are always maximally beneficial to the monopolist, because customers have no choice.

Therefore, customers will be forced to always pay the maximum amount for a good, instead of being able to bargain for a lower price.

As capitalism is based on creating efficiencies of market through customer choice, I have to wonder why mercantilism is back in vogue with a new coat of paint.

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