Hacker News Reader

Comment by stale2002 | Hacker News Reader

stale2002

> Which moral frameworks?

Well probably the moral framework that lead to courts prioritizing consumers in the first place, and for society to support that. So a pretty common moral framework that literally got baked into the law.

> Almost universally the point of economics and governance is to produce value for all people

No actually, distribution of that value is a large part of governance, and society takes action to redistribute that value all the time even at the cost of value somewhere else. And large parts of society are happy with that goal.

Such as, for example, redistributing that value to consumers that is baked into our legal systems interpretation of these laws.

View on HN

In welfare economics, a Pareto improvement formalizes the idea of an outcome being "better in every possible way". A change is called a Pareto improvement if it leaves at least one person in society better off without leaving anyone else worse off than they were before. A situation is called Pareto efficient or Pareto optimal if all possible Pareto improvements have already been made; in other words, there are no longer any ways left to make one person better off without making some other person worse off.

Ok, the point stands that our legal system and morals that underpin it have found very good reasons to prioritize consumers for distribution reasons. Thats why the courts value this. This is completely uncontroversial that courts prioritize consumers in monopoly/market power cases.

This happens in all parts of our economy as well, where the government subsidizes or taxes certain things, which technically has "deadweight loss" in the strictest, most basic and reductive econ 101 manner, and yet society has good reasons to do those things anyway as well as prioritizing consumers.

Why does society have good reasons to subsidize this case?

Deadweight loss implies there was no externality being corrected... Usually there should be.

Again, what is the externality being corrected by subsidizing these transactions?

> Why does society have good reasons to subsidize this case?

You are asking why courts and society would priority large swaths of regular consumers over that of a few companies in an oligopoly?

Well I guess the reason is because the courts and society cares more about large swaths of regular consumers than they do about a few companies in oligopolies. Thats just definitionally the reason.

> what is the externality

There is no externality. The courts just care more about this group than the other group, and society is fine with that as well.

> Usually there should be.

No, there doesn't have you be. You can instead just care more about 1 group than another. Thats perfectly normal. And a thing many people society do.

I know the basic econ 101 arguments. Here is a pro-tip though. Economics isn't a morality class. Its descriptive. It says nothing about values. One's value system can simply be to care more about 1 thing than another.

It is not weird at all to say that many people care more about large swaths of regular people than a few massively valuable companies, as is the case in basically all market power court cases.

But why should this one, small group of consumers be subsidized? You haven't answered that. Meanwhile capital is getting sucked up for unproductive uses, putting our entire economic system at risk and driving up costs for other products.

Because people value and care about consumers and regular people over that of large trillion dollar companies. Probably because the trillion dollar companies have enough money and market power and few people are sympathetic to wealthy people losing a bit of money, so thats why.

This isn't a complicated argument here. It is literally baked into our court system to prioritize consumers over multi-trillion dollar companies. Those trillion dollar companies will be fine and people find its ok to help out the little guy over the trillion dollar companies.

When a good is overproduced, and that good has negative externalities (emissions, water pollution, et cetera), there are real people being harmed. It doesn't matter if the "trillion dollar corpo" (401k holding for most people) is taking a loss. We all take a loss. We are all losers, except for a small group of subsidized consumers. Consumers =/= regular folk, arbitrarily. Much of the LLM business is B2B, so the consumer might be billion dollar corpos themselves.

> When a good is overproduced there are real people being harmed.

Its more complicated then that, actually. If you go back to your basic economics 101 text book, a price being outside of the equilibrium price cause total "deadweight loss", but still produces real benefit for one of the parties.

> We are all losers, except for a small group of subsidized consumers.

Actually it would be the very tiny group of multi trillion dollar companies taking a loss, and their customers winning.

> so the consumer might be billion dollar corpos themselves.

I am sure there are some. But the wide swath of all of employees and customers at all those billion dollar companies put together make up a much larger amount of less powerful people then the couple thousand or so at a few oligopolistic labs.

This is why, once again, courts value consumers over trillion dollar companies, even when its comparing b2b market share (in which case, it is very very clear which side has more market power here, and which side represents a large number of "regular" people).

> We all take a loss.

Actually no. Go back to the econ 101. The couple duopolies lose, and their much larger amount of customers win. Go back to the courts again, which spell this all out very clearly and prefer consumers for a reason.

Reply on news.ycombinator.com