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Comment by knolax | Hacker News Reader

Controversial opinion here but I support monopolies. Compare the innovation that came out of Bell Labs when Bell had a monopoly vs. the stagnation that exists with the current telecom oligpoly. Most tech companies are natural monopolies so they're never going to exist on a purely competitive market, so it's a choice between oligpoly and monopoly, in which case the latter is far better for funding research.

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I think this is a good point that doesn't get discussed enough.

Was Bell bad for the consumer? Yes, probably. Was the benefit of the increase in innovation a net benefit for society when compared to deadweight loss incurred by monopoly pricing? I don't know.

There is almost no way to answer this question in a rigorous manner, and yet it's extremely important for policy. The only thing I can think of is experiment over a long period of time between distinct geographies and see what happens.

In what way was Bell Labs bad for the consumer? I don’t know the history.

Not Bell Labs specifically, but its parent company AT&T had a vertically integrated monopoly which gave them control over essentially all communications technology, and also virtually all telephone service, which it used to dictate (high) prices and constrain the growth of their competitors.

Now, the monopoly profits AT&T may have been worth it, because without them, AT&T would not have funded Bell Labs creating among other things C, Unix, the transistor, the laser, and photovoltaic solar cells.

I will just note that if you want to measure it was worth it, consider what the GNU in GNU Linux is commonly held to stand for.

If basic R&D is underfunded by the public, allowing monopolies to overcharge consumers and pass some of that money on to their proprietary research departments isn't a great solution.

We should guard against monopolies and increase public funding of researchers.

Perhaps, in some cases, monopolies should be publicly-owned, rather than private enterprise.

It's a loose comparison, but a monopoly is like monarchy, competition is like democracy.

If a country has a king that is truly capable, caring and trusted, he can get a lot of things done that no other system can compete with. If he is Robert Mugabe, tough luck.

If the country has a democracy, there is limit to the amount of damage any one leader can do. And there is a hope that over time, the system will promote the "better" leader.

Similarly, when there is on a monopoly, and the leaders really care about developing the space, lots of good can come of it. Such as AT&T for a time, and IMO Google back in Sergey Brin's days as CEO.

But when they have gone south, it brings down the whole sector. Whereas with competition, there is a limit to the stagnation and anti-consumer behavior, and a hope that the favored companies will generally prevail.

Over the long run, I am pretty sure that democracies / competition is the better bet for progress.

<OT> Abrahamic religions pine for a king who will be perfect (a "Messiah"), since that has the benefits without the risk. Meanwhile, the religions compete with each other, which is a arguably better than if one had complete control.</OT>

Google X / Moonshots seem like a viable model, though I can't comment on how well they've done. I think the economic incentives are too different for the likes bell labs to exist anymore. It's hard to justify basic R&D to investors. The days of Bell inventing transistors only to have intel benefit is over, research need to be justified and monetized now. Basic research at Bell / Xerox / IBM labs existed in a time where there was some sense of charity.

> Most tech companies are natural monopolies...

What? Why? ISPs like Bell are "natural monopolies" because last-mile right of way is expensive and digging up the same street 10 times to lay 10 different lines is hugely redundant. There's nothing natural about Google's monopoly in advertising, Google just acquired most of their major competitors.

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