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Comment by jessriedel | Hacker News Reader

Strongly recommended blog post: ‘“No inventions; no innovations," a History of US Steel’ by Brian Potter

https://www.construction-physics.com/p/no-inventions-no-inno...

Thanks for sharing. This is a disturbing read in some ways:

> To maintain prices in the face of fluctuating demand, Gary would gather the industry’s leadership together in regular “Gary Dinners,” where price levels would be agreed upon and Gary would “exhort the chairmen, presidents, or other major owners of steel companies to maintain rank.” Those who refused to cooperate would be “disciplined” by the others. Many former Carnegie Steel executives, schooled in the intense competition of the Carnegie years, were allergic to this strategy, and departed for other steel companies.

> Under his leadership, the company successfully fought off a Justice Department lawsuit to break up the company as an illegal monopoly. (Perversely, the court ruled that the Gary Dinners proved that US Steel did not have the power to set prices, and thus couldn’t be a monopoly).

This makes me wonder if we just need totally different laws that are not going to be mired in lawsuits that drag out for years while monopolies and oligopolies continue making money. Maybe we just need higher taxes for the biggest corporations.

>Maybe we just need higher taxes for the biggest corporations.

Seems to me that'd exacerbate the problem. We need more efficient business, not less. (An evergreen need, while !utopia.)

Why? I'm not trying to troll, but I am wondering what the goal is? To me it seems like encouraging fair competition and letting deserving smaller companies survive is a sort of efficiency. A lot of big companies seem to be big because they're doing something shady - like the US steel example, or Microsoft with browsers (and now AI), or Apple with app stores and payments.

> what the goal is?

Economies of scale.

Economies of scale still work with small companies that specialize.

Generally there is a maximally efficient scale beyond which further growth actually decreases efficiency through diseconomies of scale.

https://www.investopedia.com/terms/d/diseconomiesofscale.asp

We need both efficient businesses, with their large economies of scale, as well as efficient markets, which reward innovative efficient businesses by allowing them to get larger.

The trick in any attempt to create economic policy like taxes is to balance these two needs of capitalism, and right now the balance is sorely in favor of the former against the latter.

Small efficient businesses are being bought by larger ones (and are often taken apart), reducing their impact on the market by reducing their ability to threaten larger businesses. Since capitalism helps people by reducing prices through competition, the ability for oligopolies to use market control to reduce threats to themselves ultimately creates market inefficiency that translates into larger consumer expenses and less common good.

Because we're experiencing oligopoly control in most market places, breaking them apart and reducing them with taxes are the two largest levers to create more market competition. I hope this makes sense.

Kinda need them now. The oligopoly game is currently bleeding the middle class dry (what was left of it anyway).

There is this ongoing talk that the courts and laws are somehow the power we need to use to defeat the abuses of wealth but there’s a strong argument to be made that the courts have quite consistently been one of the most conservative forces in the US throughout its history.

Thanks for sharing, good article. I work in the Steel industry but was not all that familiar with the US history, my experience from the last 20 years is that the JKT area (Japan, Korea, Taiwan) have been the leaders with innovative technology and operating expertise, more recently Europeans have been doing interesting things with Hydrogen/green steelmaking for example.

The feeling I get at the moment is the industry is very much entering a transitional phase, I think we are seeing the sunset of the Blast Furnace era, it's kind of where the open hearth furnace was at the dawn of BOF, something is going to have to replace BFs but it's still not 100% clear what the replacement is going to look like (or even if there will be a one size fits all replacement for Blast Furnace, it's possible that several processes will emerge suited to different regions) companies are reluctant to blink first and back the wrong horse. The capital costs are very high so backing the wrong technology and needing to pivot later could be ruinous.

Over the next 5 years or so I expect we will start seeing more (and larger) pilot scale projects but I don't think BFs will truly start getting displaced until early to mid 2030's. Companies still clinging to BF into the 2040's will be in trouble in my opinion.

> Today, it makes just 12% of American steel...and employs around the same number of people as online pet retailer Chewy.

That's...surprising.

Automation makes a difference!

Also this Planet Money episode [1].

[1] https://podcasts.apple.com/us/podcast/planet-money/id2907834...

+1. I read this a few weeks back and it really stuck with me.

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