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Comment by seg_lol | Hacker News Reader

I was at MS in the late 90s, left in 2000. It should have been broken up then. But to break up or be broken up is the wrong phrasing. It connotes a kind of destruction, to make something less than it was, but this is not the case at all.

Any value that something this large has, is in its ability to exhaust resources from the ecosystem, control the market, the workers and the ability to resist changing its behavior when better things come along. Companies exist in a system that should serve everyone and when an imbalance occurs the whole system morphs around them. They are no longer players but dictators, willingly or not. Their sheer size forces rules of the game in ways even they do not control.

Breaking up large companies isn't even about them. It is about us and the world we want to live in. Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay? [1] They ultimately controlled where those people worked (and their horrible commutes), who they were friends with, what schools their kids went to and who they married. All because the execs at these companies wanted to maintain total control of the workforce and suppress wages. That is too much power for a company to have or wield. And these large companies due to their size alone are doing this on an unconscious level. On a conscious level they can do much worse.

Microsoft stagnated for what 10-15 years? But it isn't just MS that is stagnating, it is all the people in those markets. There were a bunch of us WITHIN the company that wanted the divisions repotted so each could grow on its own. If value is being lost when an organization that large is distributed to a smaller number of units, then the value is selfish, it only serves the org and not the system it operates in.

What is the end state if we let this continue? 20 large corporations in America and a field of small feeder gig economy vendors? We will all be serfs (NPCs) in a feudal corporate cosplay.

[1] https://www.theregister.com/2012/01/20/doj_emails_anti_poach...

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This is a good point, there is more to antitrust laws than just economics, they were put in place to protect our democratic republic. Senator John Sherman is quoted: "If we will not endure a king as a political power we should not endure a king over the production, transportation, and sale of any of the necessaries of life." The Sherman Antitrust Act is the foundation of modern antitrust law.

I think this gets to the heart of the difference between republicanism and liberalism (the ideologies, not the political parties).

Let's add "communicate" to that. It's crazy how much of the world's communication is controlled by a few guys in Silicon Valley and their arbitrary ToS.

But you have such a large number of choices for communication: Meet, Hangouts, Allo, Messages, Duo, Skype, Lync, Skype for Business, and Teams.

Yeah and all of them will ban if you say the wrong thing

Lync is "Skype for Business" now, afaik.

And I think communication is one of the more open stacks. WebEx? Zoom? Slack? WeChat?

Those are all controlled by three companies, at most: Google (Meet, Hangouts, Allo, Duo), Microsoft (Lync, Skype, Skype for Business, Teams), and whatever company controls "Messages".

>Any value that something this large has, is in its ability to exhaust resources from the ecosystem, control the market, the workers and the ability to resist changing its behavior when better things come along. Companies exist in a system that should serve everyone and when an imbalance occurs the whole system morphs around them. They are no longer players but dictators, willingly or not. Their sheer size forces rules of the game in ways even they do not control.

This isn't really the whole story. Large firms don't just exist because of power, but also because to manage an increasingly complex environment (scientifically, economically etc) large institutions are required to hold the necessary knowledge to function effectively. The concentration towards larger firms is thus not just a power grab, but a necessary condition for modern production.

This was Schumpeter's basic insight. Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

The central dynamic around data collection in the information economy even amplifies that trend. Smaller firms are not going to reap benefits on the same scale as large firms can, and the primary economic case for break ups, which is that large firms are unproductive due to being unable to deal with complexity, has been turned on its head. Information now functions as a way to make centralisation more efficient, not less.

_ Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share._

Ah yes, this good ol’ myth. To debunk it, look around you at all the major players in tech who are hoarding cash like there is no tomorrow while doing incremental improvements to products rather than building something interesting.

The larger a company becomes, the more bloated and bureaucratic it becomes. Once they’re big enough, innovation is close to impossible, and the self-preservation instinct kicks in. Again, you can see that in almost all BigTech players today.

What I can see, literally, by looking around is that my phone is made by Huawei, my TV by Samsung, my medicine is made by a large pharmaceutical company, the train I take to work and the rail network are built by a state owned company, the web framework I used yesterday is made by a colossal tech giant, so is the text editor I use (granted that one may vary), and the cloud infrastructure my software runs on. So are the cars on the sideways looking out of the window. All big firms.

Large firms are quite literally who built all the complicated stuff at huge scale that pretty much everyone relies on all the time. I actually have to search around before I find something that was made by a small business.

And that's not because of some conspiracy, it's because they happen to make the best stuff cheap, which is a consequence of their scale. It's not a myth, you can literally confirm that by I suppose checking who makes the stuff you voluntarily buy each day.

None of those things were “invented” or truly brought to the edge of technological abilities by the companies you described. They piggyback off of existing invention, and pretty much are interested in keeping things as-is.

Your phone manufacturer doesn’t care about invention as much as they care about you buying the next, slightly better model.

Your TV manufacturer is interested in recouping the losses they have on selling you a cheap device by pushing as much advertising as possible.

The pharma company is interested in gouging as much money as they can through holding patents - they don’t develop medicine out of the goodness of their hearts.

You get the point.

> None of those things were “invented” or truly brought to the edge of technological abilities by the companies you described.

Actually, the large conglomerates do have R&D labs working on semiconductors, chemistry, manufacturing, and so on, so that they can come up with improvements to sell.

The reason why semiconductors get smaller, TVs get brighter colors, larger panels have acceptable manufacturing yields, is exactly because of this R&D.

A few large firms competing with each other is very different from a monopoly. Some of the things you mentioned have reasonable competition (phones, TVs, cars) and some are deeply steeped in anti-competitive practices (medicine, public transit).

Your argument was used to make Boeing into a monopoly and look how that turned out. It's easy to cherry-pick examples for either side, but I'd say take a step back and look at the trends and which way the evidence favors. At the end of the day it all comes down to incentives - and what incentive does a monopoly have to compete?

> few large firms competing with each other is very different from a monopoly.

very true but that's what we've been talking about in the comment chain, there's no actual global monopoly or one static entity, hence the explicit reference to Schumpeter's 'monopolistic competition'.

There is still competition between large firms, but the dynamism is temporal, few firms for years or decades seize outsized marketshare to dominate and innovate sectors before being replaced by other substantial firms, rather than a sort of bazaar economy of small firms competing at the same time. It's myspace being superceded by facebook maybe being eaten by tiktok that's going to drive technological innovation in social media, not mastodon instances.

Of course it's easy to cherry-pick, but you don't need to cherry pick. You can look at the economic development in mature economies vs developing economies. This tendency towards consolidation and innovation occurs in every single one. That's why South Korea and Japan have more large firms and are more productive than most of their Asian peers, it's why China with its economic model has outgrown India, where the same process is occuring now (see Jio).

And that is why the only innovation large corporations create is through acquisitions of smaller companies, which still have a creative spirit. Then they just consume the specifically desired parts of the acquisition and discard the rest.

And then the consumer/acquired parts become completely derailed/destroyed/super-monetized. This is conjecture, but awfully common.

Are we living in the same world?

> To debunk it, look around you at all the major players in tech who are hoarding cash like there is no tomorrow while doing incremental improvements to products rather than building something interesting.

Putting billions of dollars into VR/AR? Facebook acquired Oculus for >2 billion, and the project had mixed success, and Facebook is still investing more but into AR instead. Microsoft has had two versions of their AR product that are bulky and expensive, and with few users. But the 2nd generation of hardware much improved over the 1st. Apple is rumored to be developing AR glasses as well.

How about self driving cars? Google is the only company with actual driverless cars on the roads. Many startups made big promises but so far have nothing publicly available. Other large companies like Ford had previously announced their intent to develop autonomous cars, but backed out, saying the challenge is too hard. This shows that a truly large company is needed to develop autonomous cars, because billions of dollars are required for a project that carries high risk.

> Once they’re big enough, innovation is close to impossible, and the self-preservation instinct kicks in. Again, you can see that in almost all BigTech players today.

What about Amazon? Nothing could be further from the truth. They keep expanding into entirely new markets. In AWS, IoT, multiple retail stores, online video, healthcare, and probably other industries I'm forgetting.

And what about Google Stadia and Xbox game streaming? Or Facebook Libra? Or all of Google's NLP research? Project Loon? Fuchsia? Go? These are fundamentally new r&d projects.

> Your phone manufacturer doesn’t care about invention as much as they care about you buying the next, slightly better model.

Gestures broadly at 2G, 3G, 4G, LTE, and 5G Phase 1. Constantly improving display technology like OLED and transparent displays and improved cameras.

The things you are describing are not even close to being the revenue drivers or “reasons for existence” for the companies you listed. As someone who worked at FB, there is nowhere CLOSE to the amount of funding that Oculus gets compared to other parts of the company. I would venture to say the same about MS - Hololens is nothing more than an experiment, that is not the funnel in which Microsoft is pouring its revenue from other parts of the business. I am not arguing that companies don’t innovate. I am, however, arguing that companies, once reached a certain size, are less and less incentivized to do so.

> I am, however, arguing that companies, once reached a certain size, are less and less incentivized to do so.

Well, I am not sure I agree with that. Large companies can afford to take the risks. For medium-sized companies the same effort is much higher chance of going out of business. e.g. If a smaller company like Sonos announced development of an AR product I think that would be really surprising.

Clayton Christensen covered that in Innovators Dilemma. Large companies, on average, are very risk-averse.

Magic Leap comes to mind.

Magic Leap is a startup, I mean established mid-sized companies. The ones that are making money and steadily growing. For them taking a big risk can end the company. A startup is already expecting that they'll go out of business, and funding a startup is a big risk in general.

Sorry, where are you getting these views from? Every tech company I've worked at, or have talked to people who work at them, become incredibly risk averse to innovation as they grow.

The only time they makes serious investments in innovation is when they buyout smaller companies that pose a risk to their business, or who have innovated and proven that their innovation might actually be useful. And the reason for those investments is more to protect their business rather than to foster innovation itself.

> Large firms don't just exist because of power, but also because to manage an increasingly complex environment (scientifically, economically etc) large institutions are required to hold the necessary knowledge to function effectively.

Large firms don't exist because of power, but because with their power they can use resources to do things other firms can't?

Sounds like they exist because of power. And it sounds like unnecessary complexity is something they would evolve to create, not diminish, because it's a great moat for them to hide behind.

Is that what we're hoping to accomplish? Create a few hypercorporations with tens of thousands of people working bullshit jobs because they've shaped industries in such a way so as to force that bullshit to be the cost of entry?

No thanks.

I think Barron92 is drawing a distinction between "lust for power" vs "effective use of power".

To be frank that approach is historically best described as "nationally suicidal". Deciding to ignore advances because it would "unfairly centralize in somethinf other than us" tends to lead to no longer existing and either a subordinate replacing the leader in a coup and moderated because the other see that insisting on charging massed rifle instead of adopting them is a losing strategy or sticking to it and letting reality assert its brutal toll. Knowledge is power can be literal and it not being something you personally can understand is not the same as "nonsense" or "doesn't work". The benefits of capital investment are real and clear and "banning it" won't make things better, just the opposite really.

>The central dynamic around data collection in the information economy even amplifies that trend. Smaller firms are not going to reap benefits on the same scale as large firms can

I think data collection and company size is a very interesting topic. It's very hard to effectively anonymize data. It's been shown numerous times that just a little bit of extra information can undo that.

A large company, such as Google, can use the data they collect themselves. They are capable extracting value from this data through other products and ideas. A small company is much less likely able to capture the value from the data they have. So they sell it. They will anonymize it and do everything that is the standard at the time, but in the long term that data probably won't stay anonymous.

Would you rather have a megacorp use your data themselves or for your data to be bought and sold by different (smaller) companies that may or may not use your data? Which one would lead to less abuse of the data?

My intuition hates this but intellectually I’m forced to accept it. I’ve handed a huge portion of my private life to Google in the form of my browser, my phone, my search engine, my email, and a handful of other services. I arrived at that for the reasons you lay out - better all my privacy eggs in one basket where I know what they intend to do with it than to spread them around to several smaller orgs who may have more incentive to use it in ways I wouldn’t approve of.

One of the fundamental tensions I see in economics is this:

Cooperation enables greater efficiency. You don't burn resources in efforts that exist just to harm your competitor. You get all of the economies of scale of sharing information, expertise, and technology.

But competition incentivizes greater efficiency. A monoculture can stagnate because there is less risk from failure, less urgency to grow and improve.

I think the point of maximum efficiency is somewhere in the middle where there's enough scale that you don't have the economic equivalent of millions of subsistance farmers each using hand tools to hoe their own patch, but where there are enough independent players to create some urgency and make regulatory capture harder.

The hard part is that there is no stable equilibrium near that regionn of efficiency. Businesses naturally consolidate and form cabals and capture regulation, so you have to constantly push against that.

I pretty much completely agree with this comment. I would add: the sweet spot is different in different industries (and may different in the same industry at different points in history), and economic policy would do well to recognise that rather than advocating for a blanket policy for everything.

"Cooperation enables greater efficiency. You don't burn resources in efforts that exist just to harm your competitor. You get all of the economies of scale of sharing information, expertise, and technology."

Exactly if you consume or spoil all the resources you get Tragedy of the commons [1] "The tragedy of the commons is a situation in a shared-resource system where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action."

Market players can self regulate and cooperate for the sake of common interest if not then it becomes zero sum game.

[1] https://en.wikipedia.org/wiki/Tragedy_of_the_commons

> Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

Except when companies don't, and instead use that surplus profit for:

- lobbying the Government for laws favorable to the company - funding laws and groups that favor breaking up the power of workers (e.g. no increase in minimun wages, anti-labor union laws) - investing that surplus into buying back the shares of the company, enriching its investors

There have been some investments in pure research and product R&D, definitely. But expecting companies to invest the majority of gains from centralization into research isn't what we've observed over the past few decades.

> This was Schumpeter's basic insight. Monopolistic competition is more dynamic than the free, small-firm dominated market. Size gives companies the ability to earn surplus profit which is turned into long-term innovation rather than short-term fighting for market share.

what was schumpeter's evidence for this?

> They ultimately controlled where those people worked

[citation needed]. I was a "victim" of that scandal, but if I ever decided to change employers I knew where the door was and I knew my résumé would get me considered at the other players. The agreement was mostly to keep their phone bank of recruiters from polling me continuously and the managers like four levels above me from playing pachinko with the pay and benefits packages (to the detriment of the folks at my level).

Regardless, the agreement was illegal and existing law broke it up without breaking up any of the companies. I don't see how the existence of that scandal supports the hypothesis that larger corporate breakups are either needed or beneficial.

Microsoft of today is an OS company, browser company, videogame development company, and cloud computing company, and they seem to be doing pretty well overall at it; happy users, good products, decent inter-operation.

There is a lot to unpack here, but I think it needs to be addressed since your comment is getting so much exposure.

>> They ultimately controlled where those people worked

This is entire point of the anti-solicitation agreement. I don't need to cite anything.

Read the transcripts from Jobs and tell me again how it was to protect you from recruiters. How did you get sufficient protection after they lost the suit?

The point is showing the behavior of large companies that wield too much power and control large portions of the market, either from the customer's standpoint or the employees. They stopped their behavior only after being sued by the employees, who gained very little, the lawyers won and the GAFS ultimately profited from this endeavor.

Microsoft today is immaterial to the MS that should have been replanted in the 90s. Does not follow.

BTW it is hard to respond when your post is continually ninja-edited.

> Microsoft today is immaterial to the MS that should have been replanted in the 90s. Does not follow.

Microsoft of today follows from the MS that wasn't replaced in the '90s. Of course it's material.

Follows it in time only. MS today is not because of the stagnated Microsoft, but in spite of it. Nadella saved MS.

You are committing fallacies of conflating cause and effect and surviorship bias.

You claim MS "should have been replanted" in the '90s, but that claim makes the assumption that the end-result would be better than what we have now, does it not?

I don't think that's a safe assumption.

> The agreement was mostly to keep their phone bank of recruiters from polling me continuously and the managers like four levels above me from playing pachinko with the pay and benefits packages

Do CS majors not understand marginal thinking? High-level people in business certainly do.

Yes, each of those things might not sound that bad - who cares if the recruiters don't poll me if I "know the door." The problem is that phone polling does have a real impact on people switching jobs and it does depress wages if businesses agree to not do it.

Not really in an ecosystem where there's some hundred startup opportunities in addition to the big established players. The mathematics on that are far more complicated than "big company doesn't pay more ----> everyone's wages are lower."

Besides, I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field. Apple, Google, Pixar, et. al. employees are extremely well-compensated.

> Besides, I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field.

Ah. So yes, CS majors don't understand marginal thinking.

Or they're not as monetariliy greedy. There's multiple forms of value.

So you've retreated from "actually there was no harm" to "maybe CS majors don't care if they are paid substantially less than they could be due to collusion in the labor market."

I'm not going to continue responding.

It really depends on how you define "harm" and who is harmed. Classifying "not paid as much as some theoretical model claims a person should be paid" as "harm" without examining the theoretical model in detail is naive.

For example, let's assume we care about improving people's lives. It's probably a short walk to assume that more independent software companies (both big players and smaller startups) satisfy that goal better than only a few players, or one player.

A collusion-free labor market encourages players at the top to spend on labor until they bleed. Eventually, if nothing checks that cycle, they bleed out competing for a small pool of top talent, with the winner being the one with the deepest pockets who can afford to bleed longest. Then, the winner gobbles up the talent and resources of the bankrupting companies, and there are fewer players in the market (and the remaining players get to dictate labor prices on the grounds of being the only players).

Ironically, a soft salary cap can benefit the ecosystem in the long-term; employees aren't paid as much as they could be, hypothetically, short-term, but there's more job security because a price spiral is unlikely to disrupt their employer. And there's a more diverse set of independent companies in operation, likely leading to a more diverse set of software solutions and more improvement in people's lives than if salary spirals meant that only big players could afford to play.

It's one scenario among many possible, but it's interesting to observe how maybe not paying software engineers much as they could be in a completely laissez-faire market creates long-term benefits for the engineers, their employers, and consumers.

> salary spirals meant that only big players could afford to play.

The collision was between big players, who were already outbidding smaller players except Facebook with had absolutely massive funding. Smaller players weren't helped by this. (Pixar was smallish but in context it's best seen as part of Apple/Jobs)

> laissez-faire market

Calling anti-collision regulation "laissez-faire market" is strange.

Are you assuming all of these companies are going after the same top talent? There are plenty of average and above average talent who they can hire and not "bleed". You don't need to hire a team of Ken Thompsons to build a CRUD service.

If companies would stick to hiring the developers they can afford given the needs of whatever project they are hiring for, there would be no (or less drastic) upward spiral of labor cost.

In the case of Apple / Google / Pixar / etc., yes. They are definitely trying to grab every Ken Thompson they can. For Google in particular, I believe it is part of their hiring goals.

It's undoubtedly true that these companies' actions suppress wages at the margin. The first order effect is some level of harm to the impacted employees.

I can understand the argument you put forward about second order effects but I don't agree with it, underpriced labor will lead to overconsumption compared to what is optimal.

I'd also like to note that the soft cap is the outcome of laissez-faire policy, it's regulations and law that is attempting to remove it.

This talks to a society wide problem, basic logical thinking tools (thinking at the margin, elementary statistics, etc) aren't taught in school and most of the population are ignorant of them.

They're not the most difficult concepts to grasp but high school students are busy memorizing facts instead, and these thinking tools are only taught in very specific university courses that not everyone will take.

There's an interesting book on how learning these tools changes one's political philosophy.

https://www.amazon.com/Myth-Rational-Voter-Democracies-Polic...

> I have a hard time worrying about if my wages were lower than they "should" be when they're already more money than I'd see in any other field.

Never get complacent. Always demand more. Give it away if you don't need it, but get what you're worth.

That's one philosophy but not one I subscribe to. I target win-win.

You won’t be hired and you won’t work for a company in the first place if it wasn’t a win-win agreement between the employer and employee.

What working for lower wages than you’re worth contributes to is a win-lose situation between employers in your field and employees in your field where the employees lose.

It will become a problem for you not now, but in the future when you are looking for a different job or when you want a raise (even if you’re satisfied now with your salary, inflation can catch up with you quickly, for example).

Win-win is a fine philosophy when negotiating person-to-person. Not so much when it's person-to-organization.

How do you feel about profiting sharing?

It doesn't seem like a bad idea.

Google’s minister of misinformation Laszlo Bock explained it at TGIF as

1) Google did nothing wrong because 2) Outbound recruiting has no effect 3) So execs just spent a ton of time working out a complicated arrangement to prevent outbound recruiting

It amazed me that Google would brag about hiring “the smartest people” then feed them directly contradictory information and expect them to buy it, which shockingly many did. For all the typical criticism of Trump supporters being a misinformed cult coming from Googlers, I saw a ton of similarities in the logical brain turns off when dear leaders explain things.

> just spent a ton of time working out a complicated arrangement

A few emails and phone calls isn't a complicated arrangement.

Anyway, just because the defendant said something doesn't mean the plaintiffs believed it.

> depress wages

Which is not even close to OP's extreme claims.

I think OP was just listing out the consequences of switching jobs.

They also engaged in agreements to not counteroffer in competition with each other above their initial offer so that employees couldn't negotiate between offers.

do you know Fred Huxham? What you say about "mostly recruiters" is literally false

I'm afraid I don't. All attempts to learn more are telling me about track & field, which is not what I assume you're referring to.

> decent inter-operation

We don't want interoperation only between Microsoft products, but between all products. Customer lock-in is an anticompetitive act. That's a big deal, and breaking up companies would be very advantageous to the consumer in that regard.

Would it? Because in general, when I look at the software ecosystem (in the open-source community and the closed-source cross-company community), I see a minefield of impedance mismatches and a programmer's lifetime of writing shim code.

The one-company ecosystems are incentivized to make their software work with its siblings. I've never seen any such strong incentive in other environments. I'd expect open-source to succeed at it, except instead it's a compatibility nightmare because people are interested in their own apps and not in making them talk to each other.

A textbook example is interop in email vs interop in instant messengers. Email was standardized, while instant messengers are left to the whims of individual companies. Normal interop isn't a hard problem, unless there's complicating circumstances (but then you have bigger problems), it's just that companies are incentivized to restrict it for their benefit.

> They ultimately controlled where those people worked (and their horrible commutes), who they were friends with, what schools their kids went to and who they married. All because the execs at these companies wanted to maintain total control of the workforce and suppress wages.

This is ridiculous. It was a non-recruitment pact that led to lower pay (for already wealthy people, just not as wealthy ad that execs), not wage-fixing nor non-hiring nor control over where people live or went to school or who they marry.

And the insulation that the wealthiest 1% of people are entitled to send their child to a better school than their non-tech-star neighbors is horrific. It exposes a worldview that extreme inequality is only bad if you aren't on top

> NPCs

What does this even mean? Being poorly paid and not having healthcare is bad, but being an "NPC" has nothing to do with it. How is being employed as a driver/cook/whatever more of a "PC"?

I think by NPC the parent meant a total lack of agency/mobility, perhaps comparable to feudal serfdom. Sure, you have a means of sustaining yourself, but if any job you can take or business you can create all involve a kickback to a monopolistic tech company, then your existence tends to serve their interests more than yours.

How would you have broken up MS? The Office programs are better together, Windows might be split of from the rest, but then what about IE? You can't sell a browser anymore, so either that dies (which would be bad back then because it was the most advanced browser) or it gets bundled with something else and the problem continues.

I'd keep all the software together - Windows, Office, CRM, etc.

Spinning out Bing/Microsoft Ads and Azure as separate companies feels kind of obvious, and could be interesting. I'm sure Azure could easily stand on it's own (might even be beneficial?!), but I wonder about the financial dependencies between Ads and Windows?

They get this big by buying up that many successful startups. I don't know about microsoft because it was for my time but Amazon bought Kiva Systems and now it is called Amazon Robotics. This ensures Amazon is the only company able to extract value from Kiva's robotics. Their robots drive the inventory around in fulfillment centers where order get picked on a rate of 300 per hour. Because they had a double frog leap on the competition Kivy would probably have IPOed by now.

All of the technology companies have a specialized VC arm which rake up extraordinary talent before they become a competitor. Whatsapp was build with 12 engineers when they hit 1 billion users. FANG have a talent kartel.

It is no news that big-co can induce great harm, but let us not get swallowed into conspiratorial thinking. Large companies first and foremost benefit from economies of scale, not any dictatorial dynamics they might pursue.

This is important, because when we decide to draw a line based on size (easy) and not on demonstrated harmful behavior (difficult), we have to answer the question "how big exactly we should allow corporations get then?". The answer to this question will determine if we as a society can enjoy certain things or not, because some goods' and services' existence requires that economies of scale.

> Breaking up large companies isn't even about them. It is about us and the world we want to live in. Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay?

How is multiple companies colluding related to the question of a single company being broken up? Again, what they did was wrong, but let's not smuggle unnecessary emotional rhetoric into a rational argument.

> That is too much power for a company to have or wield.

Power concentrates whether we like it or not. Who should wield that power? Nation states? Religions? Or do we mandate a constant break up? You might break up your nation's companies but that doesn't prevent another country's corporations dominating the world market including yours, unless you pull a NK.

Yes corporate power concentration can/does cause great harm, but I haven't heard a suggestion that can actually work in the real world. How about strengthening the opponent process of government and other democratic processes to undertake the difficult task of disincentivizing demonstrated harmful behavior? Developing mechanisms more sophisticated than "just break it up"? American big-co's are not the only big-co's in the world, maybe compare notes with how other nations handling these?

Being able to significantly alter public perception and influence the political process is one of the most important advantages of scale.

Yes, and maybe our political and public perception apparatus doesn’t scale well to the long tail of public interest topics and a singular strong entity with clear goals is simply taking advantage of that mismatch.

> Large companies first and foremost benefit from economies of scale, not any dictatorial dynamics they might pursue.

Economies of scale are dictatorial dynamics. Economy of scale means you're putting unbalanced pricing pressure on suppliers.

> Economies of scale are dictatorial dynamics. Economy of scale means you're putting unbalanced pricing pressure on suppliers.

I think you are confusing economies of scale with monopolistic/monopsonistic dynamics.

Nope. Not confused at all.

But economies of scale are independent of the supplying market - having one skilled industrial engineer (who may be the owner) set up a fully automated line to make screws would be an economy of scale as the automated would sustain a lower price per item vs a manned line or masses of tinkers machining every screw by hand.

Said situation also says nothing about your suppliers as a bunch of small steel producers vs one massive steel monopoly themselves.

The economic power wielded is a maximia of the difference per item in efficency essentially - as any attempt to leverage it would result in the old less efficient way being cheaper and negate the competive edge.

To call the hypothetical sole industrial engineer "dictatorial" is quite the strange definition.

Automation and production efficiency isn't what people mean by "economies of scale", though, especially in relation to antitrust. When large companies make gains from "economies of scale" it's almost always because they've attacked margins, usually by wielding enough power they can convince suppliers to make less money, sometimes by replacing other parts of the vertical market by doing things in house.

If you think about the tech giants, they're not making gains by automating more production. They're buying up fiber, building their own chips, creating their own shipping companies, etc. They are big enough to alter most markets in ways that are favorable to them.

Break them up! The recent jump in engineers pay the past few years can be attributed to stopping this conduct by the large players:

>Remember the wage fixing scandal between Pixar, Google, Apple and bunch of other companies in the bay?

In addition when it comes to monopolies I always think of the Snapchat situation where a healthy, dynamic company comes up with a creative feature(stories) only to have the monopoly that is facebook completely rip it off and copy it in their own products thereby depressing snapchat's stock price and siphoning off its users. The fact that pinterest, twitter, and snapchat are not $100B+ companies and thriving is almost wholly due to facebook and its illegal monopolistic practices.

Even with the price fixing scandal, TC is still much higher at the big corps than at small companies, isn’t it? Seems like the monopolistic largesse outweighs the competition factor, at least for tech work.

The economics are different in other ways too: a big company hires someone who’s good at CS fundamentals and gives them time to learn whatever stack, while a small one needs someone with experience in exactly the right version of a framework. A big company can hire people for long term R&D while a small one needs features right now.

It may be best for the economy that the spoils of monopoly be redistributed, but we are partly the beneficiaries of them.

My thoughts on this:

- Microsoft stagnated or reversed computer software in many ways during the 80's and 90's. How long did we go without multitasking? (on the other hand, it was solely responsible for the commoditization of hardware which gave us countless benefits)

- being an employee in a company with robust competition is the best. (also for customers) Working in a company that is either too dominant or weak is an easy way to a job that lacks meaning.

Microsoft stagnated only because of leadership executing on a weak vision. Microsoft was at war with open source under a mantra of make the world Microsoft and their market didn’t care. It’s like Microsoft was executing from the same playbook as Apple before Apple discovered media licensing even though Microsoft was 20x larger. Outdated vision. By embracing the opposite approach they turned things around.

> We will all be serfs (NPCs) in a feudal corporate cosplay.

Perfect.

Great statement, excellent articulation.

" isn't even about them. It is about us and the world we want to live in. "

... we have to recognize that 'we don't own this stuff'.

Yes - I do support anti-trust and possibly 'breaking up companies' but we have to be very, very careful at how we intercede into private groups affairs.

The agents doing the 'breaking up' might just believe that they have incredible ability to 'oversee markets' and leverage the power for what they believe to be the 'greater good'.

The power of 'free markets' is often overstated but we should remind ourselves that there is a lot of value there, more importantly it's not obvious. In the short run, it's easy for someone to delude themselves in to the view that 'one's responsibility to the ostensible greater good as governor' combined with 'the grand view of markets' should legitimately empower towards control and market manipulation. After all - a bunch of 'really smart analysts' should be able to maximize social utility through some kind of restructuring of whatever exists at any given time in the markets.

It's a vey slippery slope and a hard thing to 'get right' - so any gains to be made here are going to be really correlated with how thoughtful and intelligent government will be on this one. Even with the greatest intentions it could be a mess.

Whoever doing this needs to be really, really smart about it.

> private groups affairs.

No such thing. They are relying on societal assurances that contracts they enter will be enforced, that property they hold will be protected, etc. Society is free to regulate those "private group affairs" since they are externalizing the costs onto society.

> there is a lot of value there, more importantly it's not obvious

Sure, but generally in the cases where politicians mistakenly intervene in markets with distortionary effects, economists are pretty united that the intervention will be a bad idea (see: rent control).

On anti-trust, economists recognize monopolies as a pretty clear market failure and it seems to be the tech employees who are deploying the "free market" arguments in defense of Google, FB, et al.

" Society is free to regulate those "private group affairs" since they are externalizing the costs onto society."

Private property, freedom of association is a very real thing.

It's a very serious thing to take private people's stuff from them.

So we have to be careful.

There's no state of nature where people are engaging in private transactions with legally enforced contracts, creating corporations with limited liability up to the size of the investment, etc. Those are all constructs of society.

Your idea that there are these transactions and property 'outside of society' that we have to protect from interference from society does not seem coherent to me, when the existence of a society that does grant private property rights is what allows a Google to exist in the first place.

This is totally upside down.

What is 'coherent' is a civil society that is consistent with the application of it's constitution.

Of course 'private property' is a construct - but that construct is fundamental, Constitutional. It's like voting.

If you take away people's property, your making some very deep transgression of the societal compact, and it's wrong.

There are cases where we need to make change - like lowering or increasing the voting age, we have to be careful with that.

It's also a very serious thing to use the resources of society to protect people's private accumulations.

If people get to use the force of law to keep their stuff from being stolen, they do have an obligation to pony up for the shared costs of that law enforcement.

Sure, markets are hard to beat with central control... But if the market is sufficiently consolidated, it's got a lot more in common with central control than what we would call a free market.

Markets work because people can use purchasing power to solve their problems. When you have only one (or two basically identical) players in a market, there's no ability to use purchasing power to signal that one approach or another is better for your needs. Part of the point is that the best system might involve many approaches for different kinds of end user. What we currently have in many situations is people's problems are being ignored because they don't have any real alternatives.

Simultaneously, Facebook (for example) is ultimately incentivized to solve the problems of their paying users (ad firms and political advertisers) over their non-paying users (humans). They've aggressively bought the competition which ensures that remains the reality.

Political regulation of markets exists to ensure that the interests of the polis are ultimately served by businesses, precisely because markets have MANY failure modes that prioritize other interests to the detriment of overall societal health.

Exactly this. Markets are incredibly powerful, but it's a double-edged sword.

They also have failure cases and it is important to be aware and guard against those cases.

Thank you for painting such a memorable picture. Too often we retreat to abstract intellectual arguments about what's right or how the world works. We have to remember that these decisions are about our wellbeing, as industry workers, consumers and the ecosystem as a whole.

Very insightful comment. I also focus on the element of the world we want to live in, and whether the status quo or where we are heading is really it.

> What is the end state if we let this continue? 20 large corporations in America and a field of small feeder gig economy vendors? We will all be serfs (NPCs) in a feudal corporate cosplay.

The reality is that this is what we're moving to, break-up or not. The ownership of these publicly traded companies remains the same disparate set of high-capitalization funds.

very true

People don't seem to realize that sooner or later EVERYONE will be under attack from this sort of '10 large companies that own everything' model

They seem to think - Oh my job is safe, so what do I care if taxi drivers/waiters/delivery people/warehouse workers have a tough life

sooner or later you will be a target, and then you will wish you had not ignored when everyone else was being taken out

because there will be no one left to save your job

Definitely there is a problem with people not realizing the oligopoly problem.

That said, I'm not as confident that changing public perception will actually have any impact on what the law does. There is pretty compelling evidence that in cases where public opinion and the opinion of large capital holders diverge w.r.t. a law, there is no relationship between the public opinion and what law is actually passed. [0]

[0]: https://scholar.princeton.edu/sites/default/files/mgilens/fi...

Very well put. The game is about concentrating wealth into as few hands as possible. If we allow it to continue in that direction, it will keep getting worse and accelerate. If we allow the economic elite to have their way and we turn a blind eye to their manipulations, it will be a signal for them to dial up the manipulations even more.

If you are not sufficiently connected to the financial and political elite, you will eventually lose everything. It will happen in your lifetime. Nobody will be left to protect you against gross injustice. Worse than that; nobody will care.

We all have to take a stand and make a small effort at least.

Already, highly intelligent people are beginning to fall through the cracks of the system by the millions.

Thats why i m already hoarding Brawndo stocks.

Good idea. After Monsanto (excuse me, Bayer) falls and there are no more plants, we'll still need electrolytes. Definitely a long-term growth stock.

South Korea?

This is a great take.

> What is the end state if we let this continue?

One of the pillars of capitalism is the idea of "creative destruction" (https://en.wikipedia.org/wiki/Whale_fall). That is, when a moderately-sized company falls apart, it's actually a long-term positive for the economy as a whole. It's decomposed, sold off, and its former pieces are repurposed for the good of all.

One purpose of antitrust law is to keep the cycle of whale falls going. If antitrust law is unenforced, the whales never fall, which has a negative impact on the fragility of our economy: if and when these megacorps become anemic, they threaten to take down the whole economy/whale-decomposition process with them.

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