How Monopolists drive the power and wealth divide
globaljustice.org.uk
globaljustice.org.uk
Recommended reading:
End Times: Elites, Counter-Elites, and the Path of Political Disintegration
https://www.amazon.com/End-Times-Counter-Elites-Political-Di...
"Peter Turchin, one of the most interesting social scientists of our age, has infused the study of history with approaches and insights from other fields for more than a quarter century. End Times is the culmination of his work to understand what causes political communities to cohere and what causes them to fall apart, as applied to the current turmoil within the United States.
Back in 2010, when Nature magazine asked leading scientists to provide a ten-year forecast, Turchin used his models to predict that America was in a spiral of social disintegration that would lead to a breakdown in the political order circa 2020. The years since have proved his prediction more and more accurate, and End Times reveals why.
The lessons of world history are clear, Turchin argues: When the equilibrium between ruling elites and the majority tips too far in favor of elites, political instability is all but inevitable. As income inequality surges and prosperity flows disproportionately into the hands of the elites, the common people suffer, and society-wide efforts to become an elite grow ever more frenzied. He calls this process the wealth pump; it’s a world of the damned and the saved. And since the number of such positions remains relatively fixed, the overproduction of elites inevitably leads to frustrated elite aspirants, who harness popular resentment to turn against the established order. Turchin’s models show that when this state has been reached, societies become locked in a death spiral it's very hard to exit."
It seems silly to waste reputation on something so menial.
Even under the most generous reading, if you want to make a point, then adding random noise isn't going to help.
* Google with ad-tech
* Amazon ecomerce
* There is a beer oligopoly with four breweries and > 90% market between them
* In mu country there is a duopoly of supermarkets
That is off the top of my head.
It's like saying Boeing has a monopoly on airplanes, when actually they can be said to have a local monopoly within a few hundred km of Seattle.
It's inconceivable that any forum dominantly by Apple, Microsoft, Alphabet/Google, Amazon, Meta/Facebook, Eli Lilly, Visa, Novo Nordisk, Walmart, ExxonMobil, JP Morgan Chase, Johnson and Johnson, LVMH Moët Hennessy Louis Vuitton and Saudi Basic Industries (SABIC) is ever going to propose anything to threaten that power.
You've already shown to be not entirely genuine in writing comments, so this seems like digging a hole. I'll give you another chance to come clean and engage productively, will you do so?
Just go away.
This might make sense if I was the one who wanted to engage first.. but it's just nonsensical in reality.
The problem is that if that dominant player does something (like raise prices), you cannot escape them. The rest of the market does not have the ability to absorb all the people who would like to flee the dominant player.
The problem is Always Late(tm) inventory combined with process optimization. No competitor has significant inventory or excess capacity, so nobody can respond to sudden consumer changes. Covid toilet paper shortages were a great example: industrial toilet paper suppliers were unable to deal with the shift to consumer and consumer toilet paper suppliers were unable to deal with the demand shock.
What the number should be is up to some interpretation, but I suspect that no market should ever allow a player with more than 25% market share no matter how you define "market".
IIRC Google controls about 90% of the online ad market out side the walled gardens like Facebook.
I think you may be nitpicking more than necessary here.
If you change it from “monopoly” to “dominant player” or “duopoly”, then there are many candidates, and ones which are (imho) causing problems:
- Google with search, with Bing a distant second, and Kagi and DDG being whatever.
- Google with user-created video via YT. TikTok has created a space for itself (so duopoly?), but YT is the elephant in the room for video.
- Amazon (various parts), with Walmart trying to figure out how to compete.
- AirBnB, with VRBO being a distant second.
- Facebook… FACEBOOK!!! It may have competitors, but it is the only dominant player in its section of social media. Ditto with IG.
- Uber, with Lyft being likely a permanent second (if it is able to continue existing).
As someone who has done business with Amazon, Google search/ads, Google YT, and FB, I will just say that they don’t really act like they are threatened by any competition — they are more scared of government interference/regulation. The efficiency of rent-seeking on their platforms is both impressive and appalling.
I’m not sure what the solution is, but I’m guessing that they will be whacked with the regulation hammer in some way due to having too much unilateral sway on business interactions.
As a simple example of what it might look like, the US federal government knows that it has a lot of potential power in contract negotiations, so it puts a lot of rules on itself so that it’s much more difficult for that power to be abused.
If you want to make a point about this instead, related topics, which companies fall into these buckets, etc., that's fine. But there's no need to disguise it.
Maybe you should have.
I get the feeling that you’re trying to win an argument over the use of the term “monopoly”, when what people are concerned about is anti-competitive behavior (which can happen in monopolies, duopolies, dominated markets, etc.).
As I mentioned before, fixating on the use of the term “monopoly” doesn’t accomplish much and seems to miss the overarching point of the discussion.
There's not that many HN users who can change what someone else decides, and you don't belong in that category, hence my opinion is just don't disguise it under a different angle.
Otherwise, I simply don't care either way about those claims.
Nobody thinks that money isn't a contract.
Calling everything a "social construct" -- or, rather, calling anything a social construct is meaningless. Everything is a social construct, even "I" as a concept.
I'm not completely sure about the answer to those questions, but they all derive meaning in a different way than money does. I think calling money a social construct just highlights that as far as mutually agreed upon meaning being focused on an abstract concept goes, money is pretty high on the list of having lots of meaning and being very abstract.
Even something as minute as considering a collection of atoms an "element", i.e. organizing things into discrete clusters, is a social construct.
The human brain has a CPU limit so it has to cluster things to interact meaningfully with material reality.
Glimpsing beyond this is nearly impossible because it goes outside the bounds of our abilities, but you can scrape at it if you abstract it enough like I'm doing here.
For example the adjective rich. Which means people with money. Rich people being rich due to their relationship with pieces of paper is fetishism.
They are people in a scheme of relations of production with others, namely, workers.
What if these things are offloaded to a secondary party, in exchange for a portion of the returns?
By taxing those earnings you reduce the demand for the shares which then reduces the amount of money the original workers can raise by selling shares.
The secondary market provides incentive to invest in companies.
Why is it that people of certain political persuasions always seem incapable of thinking through second and third order effects?
I am certain spending could be better allocated, but should corporations and billionaires be getting a free ride when they are gaining so so much from society? What are the downsides to taxing them more?
Billionaires and corporations are a misdirection, the actual policy that they will push is to raise taxes on people making upper middle class salaries.
Sometimes this is physical, like manufacturing machines that can be used to produce material goods that people want. Sometimes it is virtual, like the monopoly on force that forces people to pay taxes.
And that is for me - there are people who inherit fortunes, who by virtue of having fortunes, and who invest in anything sensible, even an index, will never need to work and contribute, and are virtual kings. This is a hard kink to iron out in capitalism.
In addition those who have fortunes and decide to work hard may direct that work into getting more unfair advantages (lobbying, for example, to ban better mousetraps) rather than doing stuff for the greater good (making better mousetraps). I think this too is a problem.
Capitalism + government intervention + free speech/debate might be as good as it can be for now, until abundance.
Capitalism is the worst economic system, except for all the others.
> The least we can do is
Putting it like that implies that there's a direction we should all be moving in. Presumably you have determined what this direction is and have determined that it is right for humanity.
Others may disagree.
> agree that money is a societal construct, and
Money is a simple technology that has gained wide... currency, but that doesn't mean it's an airy concept that can pop out of existence at any moment. It represents energy, effort, ingenuity, work.
> if money grows all by itself
You ever done a day's work? You ever start a business, make an investment, borrow or lend money? Nothing related to money happens by itself, except decay.
> then the gains should be fully taxed and
Again with the direction that you have determined that we should all go towards. Maybe not everybody wants a government with absolute power?
> given back to society.
Huge leap of faith here to suggest that taxes = giving back to society. The government certainly represent a good chunk of society in the form of numberless bureaucrats (some of whom are needed and useful) employed, and of the voters who are happy with the government. But there's a significant conflict of interest here; not one government has ever distributed its budgets perfectly. There's always the desire to increase headcount, to allocate more power to itself, to further its own goals.
None of this means OP has grounds to argue for economic totalitarianism.
Money is a technology people use. It has a literal physical presence that was invented and improved over time from rocks to bits.
I will concede that it's the wide acceptance of money that gives it it's value.
But the same is true for the wifi protocol and a billion other things that are also not a social construct.
Either way doesn't matter as far as OP's original argument.
The fact that people give it a certain status is inherently social. It has no utility except in transfer from one person to another, giving it to your pet fish is meaningless to the fish and burning it for fuel utilizes it quite differently.
Armies stand out as a social technology. EDIT ^W^W^W^W my bad, that link was irrelevant.
a : the practical application of knowledge especially in a particular area : ENGINEERING sense 2 medical technology b : a capability given by the practical application of knowledge a car's fuel-saving technology 2 : a manner of accomplishing a task especially using technical processes, methods, or knowledge new technologies for information storage 3 : the specialized aspects of a particular field of endeavor
If its as vague as "applied concepts for practical goals", Catholicism is also technology.
Yes. A very effective one. Up there with the wheel for staying power; I imagine the Catholics are proud of what they've built.
So when the OP is flirting with arguing for tearing it down, there are three alternatives: 1) reform but stop short of tearing it down (legislation has done this several times before), 2) propose an alternative system that has a realistic way to preserve modern life, or 3) admit that you're going to destroy modern life in order to attack wealth inequality.
For 3), you're going to find very few people who are willing to go along with you. For 2), if you can't convince us that your plan is realistic, we're going to assume that you really are at 3).
As for 1), you're going to have to get it through Congress. It's been done, as I said, but usually after a major crisis. You probably don't have the urgency in voters' minds to drive it now, and Congress isn't great at passing anything right now. (Am I the only one that thinks that "can't pass a budget, which is the basic job" should mean "fire them all"?)
Aggressive. The OP would be in a very unusual position if they haven't done most of those things.
You don't have to do much to make money grow at about 8% per year on average, if "not much" is defined as something else you can do while maintaining a full time job and raise a family. That's faster than wages grow, so get enough of it you can literally stop working. Granted "not much" is not the same as money growing on it's own, but it's a good enough approximation.
> But there's a significant conflict of interest here; not one government has ever distributed its budgets perfectly.
I don't think that was the claim. The claim is that governments distribute wealth more evenly that a corporation would, which I consider to be self evident.
Also I notice you mentioned government money paying bureaucrats, but didn't mention it spends money building roads, hospitals and running schools. In fact the vast bulk of the money goes to the latter. If a democracy is functioning well, meaning it has an informed electorate and fair voting, the governments are under considerable pressure to deliver as many of those services as they can for the dollar. You do that by shrinking the bureaucracy as much as possible.
I suspect you also believe corporations do things more efficiently that governments. In reality study after study has shown government bureaucracies are about as efficient as corporate ones. About the only thing that clearly does better than both is a competitive market (as opposed to a free market). One outstanding example of this comes from comparing the cost of going to a USA hospital versus one in just about every other country on the planet. It's an interesting comparison between hospitals in the USA are invariably run privately, whereas in the rest of the world they are partially funded by governments to varying extents. Turns out in just about all systems where the government has a say in how hospitals are run, they delivery more services for less cost.
No it does not grow on its own. It usually shrinks, actually.
Non-currency assets can "grow" though
A decent authority on the subject is Matt Stoller's book Goliath [1], which lays out the history of US monopolies and how they formed the bedrock for these modern tech companies. Their strategic dominance is no mistake. He argues that our era of monopoly power goes back to the resentment of New Deal reform, which began percolating in the economics department of University of Chicago in the 1960s and, in the 70s, entered public policy.
[1] https://www.amazon.com/Goliath-100-Year-Between-Monopoly-Dem...
Anyway, Davos/the WEF is one of the most powerful tribes getting together to decide what is important and in their best interests. It will shape politics because they will decide what political ideologies get funding and advertising, and in a few years the legislators will start aligning to the Davos opinion and writing laws. Assuming there is consensus in Davos and it isn't one of the rare occasions where the elites are frustrated.
How it affects real people is informal but the pathway is clear.
Many countries are democratic and social media makes things viral, so even with bribes and centralized media, I think if people worked together they could elect people who would redistribute the wealth. But a decent number of people seem to be against wealth distribution, and most won't vote for a politician who makes it his entire platform (Bernie Sanders) over someone whose less genuine.
More importantly I wish people would vote for someone who has an engineering mindset and prioritizes how to get common things done (like increase everyone's standards of living by increase efficiency) instead of what kinds of things to get done. Because even though said person can just hire these people, based on how inefficient the government is, I believe the people in charge don't have the capability for even that.
As long as we keep fighting amongst each other about various ideological issues, we're never going to make progress on the things posing an existential threat.
But I don't think you need a conspiracy hat to see that.
People are easily distracted.
They can be also fooled by claiming that something is cause of something else (that it actually is not).
There are also foreign adversaries that take advantage of asymmetry that Western freedom of speech offers for them.
Meanwhile, the Fed fecklessly raises interest rates over and over, refusing to acknowledge that it didn't work because the conventional economics-textbook wisdom that money supply dictates inflation wasn't the biggest factor here.
Not to get into a wider political debate, but the Biden administration's (and the Democrats') failure to call out the fleecing of America by monopolies represents their limp or nonexistent messaging overall. And when it costs them the White House, it will cost us all a lot more than expensive meat.
* The Fed's got a mandate for price stability and employment, but broadly speaking the social expectation is that they're keeping the economy afloat, and I expect that's how they view themselves as well. I'm not arguing they're doing a good job or that that's what they should do, but I think that's the broadly-held view of their role.
The interest rate hikes did work. The inflation rate has dropped by over 5% from it's peak [1]. Real wages rebounded right after the Fed started raising interest rates [2].
Where do you get that? It's far more likely evidence of monopoly/oligopoly power.
Immigration is very much an economic issue and discussing it is absolutely reasonable and shouldn't be automatically painted as racism or a social issue (even if it is a social issue to some very loud people!). Guess who absolutely loves cheap labour?!
> someone who has an engineering mindset and prioritizes how to get common things done
Iran had a president who studied engineering and that wasn't awesome depending on your point of view. It's also really hard to get things done in the states regardless of your mindset in politics today.
Look at what happened in Venezuela. The country had great engineers extracting oil. Then Chavez happened and started "redistributing wealth" and putting its generals into stealing as much as they could putting his (incompetent) families and friends on all companies like PDVSA, controlling the gold mines and everything else.
They extracted as much wealth as they could for their selves in the shortest amount of time.
All the great engineers and doctors and technical people leaved the country. PDVSA output remained stable for a while, while the infrastructure laid by the engineers lasted until it started collapsing by lack of maintenance.
I went to Venezuela two months ago. It is accident after accident. Oil spill after oil spill by obsolete infrastructure and lead by incompetent people.
Now a small country like Guyana extracts as much oil as Venezuela.
>based on how inefficient the government is,
If you believe US or any western country's Government is inefficient, you have to see socialist countries to really see orders of magnitude more inefficiency.
In Russia, China, Venezuela or lots of other countries in the world have at least 50-60% corruption rates. You pay X millions to develop radar defense systems and most than half of the money goes to corruption.
Sometimes it is the Government(China) itself that forces you to accept bribes so it has a weapon against you in case you become too powerful for the people in power.
Shower thought: I'd argue we need a "politics school" for engineers.
>We are a democratic social justice organisation working as part of a global movement to challenge the powerful and create a more just and equal world. We mobilise people in the UK for change, and act in solidarity with those fighting injustice, particularly in the global south
Seems like you might want to vet your sources, this is a highly, highly polemic group: you can especially tell because moderately polemic groups will at least try to obfuscate their bias.
I'm applying a heuristic.
Because it's not worth debating to us and the vast majority of us aren't policymakers when it comes to matter of global-economics.
...I suspect the link was to posted here to HN on the off-chance a CTO or tech-savvy CEO of an influential SV company sees it and decides to bring it up at Davos this week - just like how other NGOs take-out ads in The Economist around this time of year. So it's pretty flattering to the HN crowd to imagine that we all virtually rub-shoulders with the world's elite.
What? This argument is certifiably nuts! The biggest players can launder their size into the appearance of impartial organic consensus, yes, but observing this in action isn't a reason to trust them!
Besides, your heuristic sucks. Just because it formally sucks due to being an ad-hom doesn't mean it can't informally suck on other dimensions, like mindless deference to authority. Logic has nothing to say about that, but when considering bias it's something you should probably try harder to keep in mind.
The point is, the market through money becomes natural. I mean by that evolution is the law. Everything needs to transform to survive. This create monopolism, because most of the competion will die. Every CEO would be glad if he did not have competition.
Not distributing money make the society natural. Everyone needs to change to economically survive. Money is the variable, like time and spaces are for physics.
None is interested in make possible that all people start with the same possibilities on this planet.
Monopolism and Capitalism create inequality if money are not given back to the society to improve it.
"Work" (e.g. building products) is only possible in a society, which means for others.
Divided wealth is inherent in the nature of the tool of money. Divided power is inherent in the tool of democracy. However, the nature of the power divide is different than is widely percieved. Like businesses, governments also are successful due to monopoly secrets. Functioning democratic republics are what prevent massive genocides, sometimes if not most often attempted in the name of wealth redistribution and with subtextual ethnic cleansing goals.
Monopoly is the bedrock of business. Business is the bedrock of preventing populations from being enslaved and killed by foreign governments, as global businesses fund militaries in a zero sum global wealth environment. That is, if you choose to impoverish your society, this means a vacuum for another government to economically fill and dominate. Strongly consider that anyone who wants you to be poorer hates you with a murderous passion.
In a global business environment, monopolies are essential to national security for a variety of reasons. As discussed, one of the most important being the ability to compete globally. There is no moral logic that can argue that it is moral to dismantle a monopoly for the benefit of competing governments.
The article's logic and conclusions are both childish and insane.
The time for railing against monopolies was prior to when the same types also wanted to create an economically globalist society.
I stated that global competition is "one of the most important" justifications for monopoly.
You adding the phrase "primary purpose" and attaching it to "fund the military, and then answering your own statement with a rhetorical question, is barely worth responding to.
>then there's no issue with taxing them more or even nationalising them, is there?
If you are so sure of you're reasoning, then why the rhetorical framing?
I don't agree that you've made a rhetorical point, at all. There are figuratively a dozen reasons not to nationalize nor overtax them.
Perhaps the best of which, to start, is that I haven't seen presented logic that it makes sense.
> If you are so sure of you're reasoning, then why the rhetorical framing?
Because I'm not putting in more effort if my counterpart refuses to. I'm not going to dignify the "economically globalist society" part with a response unless I'm forced to, I'm still not sure you sincerely believe that, but I can't reason someone out of a position they weren't reasoned into.
Market warping commodity monopolies are rare, due to regulation. Proving them takes a lot more than a neo-communist rant. Modern monopolies are most often predicated on IP. Protecting them is protection of the global market for their goods, which in turn protects the all-important trade-balance as well as GDP. IP protection is not cartelization / price fixing.
>Because I'm not putting in more effort if my counterpart refuses to
You responded to me by inventing a strawman argument and then basing a rhetorical question on it that, in turn, justifies itself by assuming the strawman. I'm not your counterpart nor did I ask you to participate. Your particiaption should be self-evidently valuable if you want to be considered a participant in a debate. Your mode of response was not valid. Ie: if you respond to a statement with a false strawman and a question that assumes that it is correct, then expect that to be called out.
> I'm not going to dignify the "economically globalist society" part with a response
No one asked you for a response. I could care less if you respond, but will point out the flaws in your response if you do.
Incresing internal wealth is always predicated on importation of foreign currency. This is why sanctions work to impoverish nations, in spite of possession of valuable items like oil. Nations can sell their production internally all they like. They'll remain third world hellholes without an export market.
Dear god, which rock have you been living under if you're somehow not even able to conceive of the similarities with the other industries where monopolies are good, actually. Coase did good work but clearly he was a disaster to public education, if you're not even able to at least recapitulate his arguments. Wait, wait, you do at least know what a marginal cost is, right?
> You responded to me by inventing a strawman argument
Ah yes, the strawman of microfoundations. I really wonder how some heterodox economists manage to even take themselves seriously sometimes. I assure you that having microfoundations for your model is much stronger than not having any foundations whatsoever.
> Your particiaption should be self-evidently valuable if you want to be considered a participant in a debate.
See, pigeon chess. There's no point in debating you lot, I mean Adam fucking Smith, the commie bastard he is, wrote a book about that mercantilist BS, so if three centuries hasn't been long enough for it to sink in nothing I say or do will.
> Incresing internal wealth is always predicated on importation of foreign currency. This is why sanctions work to impoverish nations, in spite of possession of valuable items like oil.
Like, wow, this is some breathtakingly novel take on the paradox of plenty right here, we should get this published so you can win the next Sveriges Riksbank Prize.