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Comment by benreesman | Hacker News Reader

Basically everything Dan posts online is deeply insightful, fearlessly honest, thoroughly footnoted, and dryly humorous.

I think even he is a little averse to straight up saying it out loud (we’ve discussed it many times): software and product outcomes have gone to shit because we don’t enforce anti-trust law already on the books, let alone update it in light of 50 Moore doublings.

You want a smart phone? Here are two vendors with the same App Store vig at payday loan shark rates. You want to rent cloud compute? Here are several vendors where the 4th place vendor charges the same as the first place vendor. You build disruptive encrypted messaging app? You better live on a boat and watch your six like Jason Bourne Mr. Marlinspike.

Is it even a little surprising that everything from Google search to Netflix is a shittier version of itself ten years ago? There’s no incentive to make it compelling!

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this is a tangent for sure but I doubt you can find payday loans that lend for 30% APR (Apple Store takes 30%). People really have no idea what realistic rates are for people with bad credit. If you have a sub 580 credit score the average APR for unsecured loans is 100%.

I was being generous to the App Store vendors.

The better analogy is Tony Soprano with a migraine.

But Tony Soprano sucks the blood out of pre-existing economic activity while Apple created a brand-new playing field for billions of $ of new activity, complete with the hardware platform and app hosting.

On economic activity? Apple has generated a lot in the last few decades.

On human welfare? Every other day a new study comes out on the destructive force that heavily marketed smart phones represent: Phillip Morris and Enron put together couldn’t collapse the birth rate in a nation.

This debate is about economic activity as a good a priori. A lot of people assume that.

Some are ill-informed: they haven’t read the designer of GDP talk about the perils of GDP as a metric.

A small few know how mathematically comical the fucking Laffer Curve is and who thought it up and where and prey on the good intentions of the former group.

They’re going to catch a guillotine no matter how much caution I or anyone else advocates for.

"Catch a guillotine"? (!!)

Collapsing the birthrate?

Human welfare?

We're talking about the App Store my friend. You need to take it easy on the ideology.

No we’re talking about Apple and the ostensible economic impact as opposed to the humane assessment of outcomes friend, and we can talk about anything from child labor in Foxconn factories to union busting at Apple stores to parts pairing around right to repair before we even get into how fucking illegal the App Store shit is.

Have you "de-apple'd" your life in anyway so that you're at least not helping to finance the illegal app store shit?

I’m rotating things out of walled-garden mega ecosystems and into e.g. Proton.

It’s not done in a day but I’m on track to finish in 2025.

Nice, thanks. Making similar strides myself. Moved over to a Framework machine (which has been surprisingly pleasant) with Linux (also not too bad as a desktop OS in 2024) - coming from an M1 Pro. Photo's is my current sticking point though, do I really push everything into Google photos...

Endorsing this, because an upvote is invisible. Also consider: is it the phone that’s the problem, or is it TikTok/Twitter/Instagram/whatever? And even for them, is it the app itself, or is it the other people?

The problem with X is… the other people who use X.

At what point does a "new" playing field become an "existing" playing field? Surely they don't deserve an outsized cut forever, and we're more than 16 years in.

Their hardware sales shouldn't entitle them to a cut of the software used on it, and the hosting is not worth particularly much.

Of course they do? Just because they created a platform long ago doesn’t make it public property all of a sudden?

The value of their platform is in both hardware and software by the way.

> Of course they do? Just because they created a platform long ago doesn’t make it public

If that's what you think matters above all else, would you support a literal mafia group taking a cut if they had started the market in that particular city?

> public property

It's a market, not property.

But Apple owns none of the iPhones, so why do they get a say?

> The value of their platform is in both hardware and software by the way.

They shouldn't be artificially tied together by DRM.

A legitimate business created an asset. There’s no good reason to believe they should cede ownership simply because 16 years have elapsed.

> But Apple owns none of the iPhones, so why do they get a say?

This is an interesting point. But the key thing is people buy iPhones in part because of the walled garden, and Apple bakes it into the price. Without that App Store revenue, those $999 iPhones would simply see a price increase.

The demand is not for Apple to give up ownership of their own store.

And if they baked the price into the phones, at least that would be honest. But they likely wouldn't increase the phone price by that much.

If you think they're being dishonest by betting on future app revenue from iPhone users... buy an Android.

I assume you mean "buy an Android and do nothing else", but in that case I think it's unreasonable to suggest I'm not allowed to want companies to be honest 99.9% of the time, and I can only express it once every few years while I'm choosing what phone to buy.

If you didn't mean that, I'm not sure why you gave me that advice. I'll keep it in mind but I'd prefer we keep the discussion focused on what Apple is doing and whether it should be accepted by the general public, both in terms of popularity and legality. And Google too, because this discussion started about both app stores.

> Without that App Store revenue, those $999 iPhones would simply see a price increase.

Why would that happen instead of Apple taking less profit overall?

I suspect that Apple's pricing for phones is based on primarily on what the customer is willing to pay rather than on the amount needed to be profitable.

At one time we had somewhat reasonable sounding protections via copyright and patent.

Today that’s so captured that Mickey Mouse is still in copyright and insulin for diabetics costs more than the saline it’s in.

It defies both the law as written and the human sense that wrote it to advocate for unproductive rent seeking: sixteen years? With a few point patches along the way? Thirty percent.

The Europeans find it ridiculous, the FTC finds it ridiculous, anyone who likes innovation finds it ridiculous.

But it’s mostly ridiculous because history is unambiguous on this point: you tell the peasants to eat cake long enough and you’ll swing from a dockyard crane.

Let’s seek to avoid that kind of thing?

> If that's what you think matters above all else, would you support a literal mafia group taking a cut if they had started the market in that particular city?

This is called being a "landlord" and it's actually completely legal.

You buy some land, you build a mall, you invite shopkeepers to set up shops and sell to customers visiting the mall, and the shopkeepers give you $$$$ every month, forever. If they ever stop paying, they lose their shops.

Even though it's shopkeepers that draw customers to the mall in the first place, and even though the shopkeepers are covering all the maintenance costs of the mall, you get paid anyway. Because you own the mall.

So if a mafia group created a market, took a cut from every shop, and threw out anyone who wouldn't pay them their cut? That's actually a legitimate business.

That doesn't quite hold when talking about a piece if hardware someone can own outright, like a phone. If the mall allowed shop owners to buy the store they'd have to function more like an HOA, collecting dues rather than rent.

That analogy still doesn't quite hold as you legally agree to pay HOA dues when buying the property and agree the property can seized eventually if you don't pay. No such agreement is made between phone owners and Apple, Apple just sells you the thing and puts some of it's functionality behind ongoing fees.

That's the point - the mall doesn't allow shop owners to buy their store. And Google doesn't let you own your phone outright. If they did, they'd have to give up that recurring revenue stream!

I don't like the app store model at all, but it's a stretch to call it rent. Google can't repossess your phone simply because you don't buy any apps.

I have heard the rent argument made for property tax and it holds better there. Own your house outright but fall behind on property taxes and the government can take your house and land - now that feels a lot more like rent.

Analogies between physical commerce and what the Cartel is up to are offensively wrong by 19 orders of magnitude or so.

There is no useful analogy from an idyllic high street with people shopping at leisure to what happens when you give sociopaths unbounded compute and legal carte blanche.

I struggle with this as a meme and I have a more and less charitable theory. My more charitable theory is that people never learned finance seriously. My less charitable theory is that people stand to benefit personally and are indifferent what it costs, as long as someone else pays the cost.

None of these concepts are in the bedrock law of the land: shopping mall, home owner’s association? Which amendment protects HOAs?

It is completely possible to change all of this, and while we should deliberate thoughtfully before making sweeping change, I mistrust anyone who just asserts dubious shit as bedrock laws of nature.

Maybe we’ve got a pretty sickening system composed of dubiously legal and strictly unethical status quos and it’s time to make some changes at arbitrary effort and cost.

I’d contend that the term “rentier” is more general and basically all economics from Smith and Ricardo up to Art Laffer was no big lobby for extractive rent seeking.

Profit margins and low-friction competition go hand in hand, if one endorses the one without demanding the other?

I’ll show you a pretty small-minded person with distressingly little empathy.

All property is public property in the sense that the duly constituted government informed by the wishes of the electorate has an iron monopoly on the use of force and in this case enough force to make anyone do anything.

Some internet platform thing stops being socially useful from competitive innovation and starts being an extractive rent?

The public has the power to dictate terms to the people running it. It’s a power the public hasn’t exercised a lot recently, but it’s only been about 30 years since LA 92, a little longer to Watts and Detroit.

It would be a grave error to mistake the public’s kindness for weakness.

> payday loans that lend for 30% APR (Apple Store takes 30%)

You have to flip the percentage. The fraction of money that goes to the intended destination after a 30% tax is 70%. The fraction of money that goes to the intended destination with a one year 100% APR loan is 50%.

Though there's no reason to assume a year in particular. If you take a six month loan at 100% APR, you have to pay back 141%. Paying back 141% is equivalent to a 29% tax. And if the best comparison is "six months of compounding payday loans" that's even worse than the initial comment suggested.

I think that we should either refer people to serious treatments of bond pricing or say nothing on the matter: it’s very easy to confuse everyone with “sort of” explanations of important math.

Anti-trust laws, and their enforcement, are only feasible in the very-large-monopoly space. Even in smaller monopolies, where not a lot of a money is moving around, you'll get a crappy product. Do you see Linda Khan going after Workday?

The “Magnificent Seven” represent like 25-30% of the S&P 500 by cap.

We’re not in the “very large” regime?

Payday loan shark rates?

> payday loan shark rates

Do you know what the retail markup on things you buy in your local shop?

If a product costs $1 from the producer, the distributer sells it to the retail shop at $2. And the retailer sells it at $4.

Indeed. There is a nascent alliance forming between socialists like myself and libertarians like many I respect: a “market” that has profit margins to increase prices but little or no competition to put downward pressure is a despotism. It’s a vampiric wealth transfer on the scale of great power GDP and many of us have fucking had it.

If you can hear this, you are the resistance.

The retailer has to pay a lot in shipping and stocking that a digital storefront doesn't. More importantly, the retailer doesn't prevent me from buying it directly for $1 or $2.

>I think even he is a little averse to straight up saying it out loud (we’ve discussed it many times): software and product outcomes have gone to shit because we don’t enforce anti-trust law already on the books, let alone update it in light of 50 Moore doublings.

None of the examples of crappy software from the OP are Magnificent 7 companies, are they? Those companies seem to be capable of hiring the best talent.

A critical input into the build vs buy decision is whether your company is actually capable of building. Suppose Dan was advising the company that made the crappy Postgres/Snowflake sync software on whether to build vs buy a supporting component. Given that their main product is already crap, can they really be expected to build a better supporting component in-house? Seems like they might as well buy, and focus their energy on fixing the main product.

Dan advocates vertical integration here, and elsewhere says engineers get better compensation from FAANG than startups. This suggests that big companies made up of lots of talented engineers have natural efficiencies, relative to the alternatives.

A natural interpretation of "antitrust" is: break companies up into their smaller business units. That basically replaces an in-house "build" relationship with an inter-business "buy" relationship. So it seems antithetical to the OP.

Dan, if you're reading this, I encourage you to write a reply here on HN tearing me apart, like you did to all the other HN commenters.

Your build/buy analysis is pretty astute if you accept the axioms: when reasonable people disagree firmly it’s almost always their starting assumptions.

I’ll challenge the notion that enriching mediocre people at the expense of society is either reasonable or useful. Enlightenment ideals around the sanctity of personal property fall apart when you extrapolate that to millions of people in passive index funds who don’t vote on governance.

Neither the United States Constitution nor the Universal Declaration of Human Rights nor the Geneva Conventions have any protections for rent seeking assholes as a bloc.

Don’t shoot the messenger: in my reading of history either one group backs down or the other slaughters them.

I’m lobbying for the peaceful resolution.

Your analysis seems really handwavey. Of course, rent seeking is not considered particularly valuable. But some amount is inevitable. You haven't been very specific about the rule change that you think would reduce rent seeking, or why you believe it would be helpful.

I see very little downside in an extreme form of campaign finance reform where basically any interaction between industry and legislature is deemed briber and treason and is a capital crime.

I’ll also advocate for a punitive wealth tax: not to raise revenue (who cares) but to cripple billionaires who aspire to nation state power. 50 million seems like plenty to live in arbitrary luxury but not enough to buy policy. Seize everything above that.

Today this is a comment. It will become a proposal. Then it will become an ultimatum.

What happens after that is unclear. War possibly.

>basically any interaction between industry and legislature

If legislature doesn't talk to industry before regulating, expect lots of incompetent, ignorant, economy-crippling regulation.

You don't have to change anything in the US if you want this. Just move to Germany.

>cripple billionaires

You might be able to persuade Trump of this, actually, if you sell it as increasing his power over the other billionaires.

More seriously -- It sounds like you have a strong desire to live in an authoritarian country, where the state possesses unchallenged primacy over its citizens. I support your right to do that. There are many available to choose from.

I'll bet if you do enough research, you can even identify an authoritarian country which also has crippling regulations. That should be perfect.

These talking points went mainstream around the time Reagan got elected, around the time stuff like the Laffer curve got taken seriously.

The United States was mounting a vigorous defense against the Warsaw Pact in 1960, and again in 1970, and straight up through 1979 before Reagan was elected and we took the Laffer Curve straight off the back of a napkin and to the legislature.

There is a way to run a participating democracy without a dystopian upwards wealth transfer, without unlimited political spending, without a catastrophic class segmentation that will lead to war. And we can do it all while opposing unbounded statism.

It sounds like you’re doing well under the current system and trying to frame it like that makes a system good.

Fuck you.

>Fuck you.

This will be my last reply in this thread (unless you apologize).

>These talking points went mainstream around the time Reagan got elected, around the time stuff like the Laffer curve got taken seriously.

Unfashionable isn't the same as wrong. It's telling that you're responding by saying "this is why you're unfashionable", rather than "this is why you're wrong".

>There is a way to run a participating democracy without a dystopian upwards wealth transfer, without unlimited political spending, without a catastrophic class segmentation that will lead to war. And we can do it all while opposing unbounded statism.

Are you aware that median wages in the US are some of the highest in the world?

https://ourworldindata.org/grapher/daily-median-income?tab=t...

Regarding class divisions and political spending, you might find these links interesting:

https://www.noahpinion.blog/p/america-doesnt-really-have-a-w...

https://slatestarcodex.com/2019/09/18/too-much-dark-money-in...

I actually care more about global inequality than inequality within the USA. I would sooner support effective foreign aid than welfare.

But really -- It's not your specific policy ideas that disturb me, so much as your attitude. Your politics aren't the politics of benevolence or charity. They're the politics of envy, ego, bitterness, and resentment. That never ends well:

https://iea.org.uk/publications/socialism-the-failed-idea-th...

>It sounds like you’re doing well under the current system and trying to frame it like that makes a system good.

Currently surviving off of savings due to a chronic illness. I haven't had a good source of income for multiple years. My Medicaid coverage just renewed. I rent a room in an undesirable area. I don't have a car. I won't get a chance to see my family for Christmas.

But you know what? I am "doing well". That's because "doing well" is more about your mentality than your material resources.

I hope you get the support you need in that area. Merry Christmas.

One example is Google maps. There are two ecosystems: Google and Apple. Apple is kinda meh but lacks user information (ie: menu photos for a restaurant). Google maps has become simply horrendous but here is the catch: There is no third viable alternative. There used to be Foursquare for finding stuff nearby but that's gone. It's a very legitimate market. Businesses want to be found. Users want to find information and legitimate ratings. Money can be made as Google is monetizing Maps.

Sometimes I wonder if the free market has stopped working.

How, specifically, has Google Maps become horrendous?

>Sometimes I wonder if the free market has stopped working.

The "free market" means people have the freedom to compete. It doesn't mean they are guaranteed do so. You might as well blame society for getting lazy and complacent.

"The "free market" means people have the freedom to compete."

The "free market" means nothing as nothing like that existed at any point of human history.

Like anything, the term “free market” fluctuates in semantics like hemlines.

But “the effective freedom to compete” is a reasonable TLDR on versions of it that lead to peace and prosperity.

The “money for nothing” kind of capitalism? That kind gets regimes and their apologists killed in my reading of history.

I’ll admonish you to endorse a better plan.

It’s got the same disease as the rest of Google? What gained monumental trust by being a useful and accessible library of high-quality information is now a place to shove higher oCPM because fuck everyone?

I really admire Google over time, it’s a special place that still has engineers you can’t find many places.

But once they let climber TPMs write their own performance review by just ransacking the dwell? An even worse crop (Altman, Amodei) was inevitable.

Can you give me three recent instances where you were trying to accomplish something with Google Maps, and you weren't able to because it's gone to shit?

Without concrete examples your comment is just vibes.

You don't seem to be arguing that Google is a bad company actually. You're arguing that it was once a good/altruistic company, and now it's more ordinary. This strikes me as an entitled attitude. A company behaves in a good/altruistic way, people get used to it, they don't show appreciation, but they do start cursing if the altruism diminishes even a little. "No good deed goes unpunished"

The reason we like the free market is that there is guaranteed to be competition in a free market and that's guaranteed to lower prices and improve features, which are not things that happened in communism. If those things aren't actually true then why do we like the free market - how's it any better than communism?

"Guaranteed to happen" vs "doesn't happen at all" is a false dichotomy.

If you think a company is doing a bad job of serving its customers, compete with it.

If you're right, and you can do a better job of serving those customers, you are likely to become rich.

If you aren't interested in competing, maybe you don't actually believe it is possible to do much better.

I agree that in principle, there can be a role for the government in removing structural barriers to competition. I haven't seen that role particularly well-articulated in this thread, though.

2GIS is fantastic, it's light years ahead of both on map quality, and has very detailed information about companies, various points of interest, restaurants, etc. But it only covers a few ex-Soviet countries and is very unlikely to come to your side of the world under the current political climate.

Markets sometimes experience market failure: markets are a great tool but they’re no more divinely infallible than any other human institution.

High-paying work in the US right now and software in particular is in a bit of a doldrums where the locally useful needles are like, friction to leave the platform, and the absolute limit of remnant ad load before people throw their phone at a wall, and taking a big cut out of everything, and lying constantly about what foundation models can and can’t do and shit.

I suspect it feels this way because this is a pretty exceptional run where the Valley just doesn’t have shit for the LPs. It was Web3 and then the Apple Watch (or vice versa) and then it was WeWork and then it was the Metaberse and now it’s “AI”.

But it will get better: dumb, lazy, corrupt management eventually gets rotated out. This crop is really hanging on by their fingernails, but the writing is on the wall.

> Here are several vendors where the 4th place vendor charges the same as the first place vendor.

That, uh, is kind of what you expect in a competitive commodity market, isn't it? I don't think that's the example you want. (No disagreement about app stores).

You raise a good point but I think it’s actually a great argument for the corruption. Modern cloud compute is priced at such absurd margins that AWS subsidizes the price dumping of the whole Amazon retail business: there’s a reason Jassey is second only to Bezos in clout.

When vendors 1-5 are all running 20, 30, sometimes 50 percent margins while their share varies from like 40% to like 5%?

That’s called price fixing.

The high profit margins, if those figures are correct, are a much more compelling argument than merely having similar prices. Those can be deceptive too, but I haven't looked into it...

They’re both worthy of scrutiny. The combination is pretty damning.

Luckily both the US and EU are working on breaking Google's app store monopoly. Though the US might stop that if Google manages to convince the new top guy that it's anti-woke.

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