No.

Well, yeah. Democrats are going to have to solve the problem of poisoning the university system at the source, rather than resorting to shrieking at otherwise reasonably justices, when it's already too late.

Yeah, I agree with that for sure. People should be protesting this, not whether some loser comes to speak at your university.

https://www.theatlantic.com/business/archive/2017/02/antimonopoly-big-business/514358/

Apparently Clinton had promised to actually enforce antitrust laws. Do we think she actually meant it, or was she just lying?

In any case, I genuinely wasn't aware how much monopoly power has been increasing in America. I wonder why neoliberals don't seem to be in hysterics over it?

I thought that increasing monopoly power was all that left-leaning activists were talking about these days? But maybe you don't read much tech news (because the increasing size and scope of things like Google, etc., are things they complain about all day long).

No, I have basically zero knowledge of what Google is doing. I knew Google was sort of monopolistic, I just didn't think I grasped how widespread these articles are making it sound.

In fact, if you have any cool articles about Silicon Valley, please share them.

Well, a quick search on Hacker News turns up (version of?) a talk by Scott Galloway that Jon`C posted here when it was new:



And a similar search shows a bunch of news items where Google is running afoul of antitrust laws in... countries other than the U.S. (EU, India)? lol

E.g., from yesterday, a story title, "Google Risks New Antitrust Fines in the EU. The U.S. Lags Behind Again"

And I don't know if I read it here or there, but there is definitely the idea that Google reorganized into Alphabet in anticipation that it would eventually be broken up anyway.

And even the think tank that Google funded formerly funded concluded that the company should be broken up.

Also, the illustration in that article just showed me something--monopolies aren't tumors, they're balloons!

Whereas, a one Brit think we should fund something like the BBC to compete with the likes of Google.

Imagine if Mozilla were made into a publicly funded corporation! I don't think it would be half bad, actually.

Imagine if instead of making a government funded Facebook clone, governments made direct marketing illegal

Imagine if we deleted Facebook

So thanks for relinking that, I actually was looking for it recently but couldn't find it.

Yeah, so his argument is convincing, and I believe there was strong monopoly power in tech, but it turns out monopoly power has increased across all industries, seemingly due to Reagan no longer enforcing antitrust laws.

http://www.nber.org/papers/w23687

https://www8.gsb.columbia.edu/faculty-research/sites/faculty-research/files/finance/Macro%20Lunch/IK_Comp_v1.pdf

But, yeah, isn't this like, the one thing capitalists actually all recognize as the primary problem with the system? Shouldn't they be in hysterics right now that the system is failing? I dunno

I'm not so sure about that. I quick google search of the words "warren buffet antitrust" pulls up an op-ed piece in the FT which recalls how Warren Buffet has advocated for investing in companies that build "moats" around potential competition, and that the ideal company in his mind is one which has no capital investment, and yet grows. Does that kind of sound like a good description of what a monopoly might do? I.e., if you have no real competition, why invest?

And a quick glance at the website of the Antitrust Council of the U.S. Chamber of Commerce shows a blog post which chastises the E.U. for unfairly taking too long to slap Google with too large a fine.

It seems to me that capitalism is operating a lot like its proponents would like!

(Asking capitalists to stop looking for opportunities to invest in monopolies is like asking tumors to stop growing. You don't reason with them, you cut them out.)

(But maybe you mean people in academia)

Capitalism basically works "best" when there are no profits. No profits means markets are most efficient. Capitalism only benefits people when markets are efficient. If they're becoming less efficient, you're seeing a celebration of highwaymen, not anyone intellectually honest about its effects.

I mean, from a game theory perspective, being a monopoly in a market where everyone else faces strong competition is the best place to be in. So yeah Warren Buffett has room to cheer, he owns a bunch of stock.

Realpolitik: antitrust enforcement had to change during the neoliberal reset because America’s regulated competitive corporations couldn’t compete against Asian conglomerates.

Why could Asian conglomerates outperform U.S. companies?

Obvious answer: lower price of labor?

Other candidates: lack of environmental regulations; state-sponsored corporations

Conglomerates can use profits from other parts of the company to fuel dumping. Sometimes overtly, but often in ways that are harder to detect (e.g. product sold at above manufacturing prices, but with internal vendors and overhead paid by other business units). Conglomerates can also use their heft to get opportunities that other companies can’t get. Sometimes illegally, like tying, sometimes legally like if they not only compete against your product, but own all of the stores that might sell your product.

For many many years, GE was the only real conglomerate in the US. The rest had been broken up, or were never formed in the first place. The US figured out that it would be a living nightmare to have a society where the person who built your house, built the tools that built your house, built your car, fuels your car, grew the food you eat, employs you, and owns the bank where your pay check gets deposited, are all the same company. Conglomerates fell out of favour for a lot of reasons, both cultural and legal. But this wasn’t odd in e.g. 1960s Japan, or modern South Korea. At the risk of prognosticating, I don’t think it’ll be odd in e.g. 2030s USA.

Not a coincidence that GE was the first company to go to China tho.

https://twitter.com/TheAtlantic/status/1017229481851965440

"Calls from the left to ‘abolish ICE’ have grown louder in recent weeks, but the movement's goals are still murky"

???????????????????????????

So basically they can harm competition, and have more power to seek rents. But were the Asian markets that big as to force the rest of the world to respond that way? Couldn't this have been nipped in the bud early on, by like, demanding they break up their conglomerates a bit and collectively tariffing them until they do?

Also isn't it your thesis that China is basically one big conglomerate?

Doesn't seem like a coincidence that the "living nightmare" you're describing is effectively how the dystopian Wyland-Yutani corporation functions in the Alien movies, nor that the corporation is in part a Japanese-owned conglomerate. The fear that conglomerates would take over every aspect of life must've been particularly acute then, as was the fear that foreign companies would take over American industry.

Did you read the article?

It's probably not a coincidence either that many say Trump's foreign policy views were formed in the 70s and 80s. Protectionism is one way to respond to international competition, and I'm sure there was no shortage of Americans who argued for it as the best way to contend with Japanese economic ascendency back in the 70s and 80s.

It seems like the limitations of this approach, though, is probably exemplified in the limitations of the current administration's China policy. It's difficult to get other countries on board (although admittedly, Trump isn't trying to do that). Giving other countries an ultimatum that they can have access to an Asian market or to the US wouldn't necessarily work in the US' favor, in the same way that it would if the choice was, say, the US or Iran or the US and Paraguay. The US doesn't really have the clout to organize collectively, because, frankly, people want to buy goods made in Asian markets, and many of the other countries aren't really in a position to compete with Asian conglomerates anyway. And tariffs don't really provide enough leverage to force a country to eliminate the very thing (or one of them, anyway) that give their companies a competitive advantage (and, hence, an important source of income that the governments can tax).

I suspect that protectionism would've imposed a major obstacle on the American PC industry early in its history (just to name one example), because the rise of American tech companies in the 70s and 80s (especially hardware, I suspect) was largely dependent on importing technology from Japan.

I haven't read the passage you're talking about, but it sounds to me like Buffet's not talking about monopolies here, as much as he's talking about sustainable businesses, by which I mean companies that are profitable and are able to grow by spending their own revenue on expansion rather than relying on capital investments from outside investors.

You must be right about that. However, I think a monopoly would be a (very nice) special case of that state of affairs.

At any rate, from what I've heard Peter Thiel wrote a book basically telling people they need to build a "moat" if they wanna make it to the big time and rake in the cash. Well, this is not so much a formula for doing so than it is an apology for those who have, but, minor detail....

I mean, Jon used this terminology in an earlier post, when he was talking about exceptionally talented employees and hours logged working on products. I think when Thiel and Buffet use this terminology, they're not saying much more than that successful companies need some kind of competitive advantage that's directly related to the value proposition of the company, whatever that thing is. A moat is just an edge that can't be easily obtained by competitors. I don't think they're saying that success is contingent on, say, rigging the system (although getting special treatment from the government or some other unfair advantage certainly seems like it'd count as a "moat").

Moats don't make a castle impregnable. They offer enough security so that someone who wants to storm the castle will have to try really, really hard and dedicate a lot of resources in order to be successful.

So... plenty of room for Amazon stock to grow?

To be clear, Americans were the unusual ones here, not Asians. Canada had Seagram and J.D. Irving, Netherlands had Unilever, Switzerland had Nestle - I could keep going for a while. Opening up US capital markets meant Americans were rather small fish in a large pond. I'm actually not entirely sure how it worked out as well as it did. If you look at the ultimate beneficial owners of a lot of American brands, I suppose you could argue that it didn't.

Yes.

Protectionism is an umbrella term, and a loaded one at that - protectionism comprehensively accounts for everything you can do about anticompetitive foreign firms other than a race to the bottom (which is what the US ended up doing).

Basically,



It's protectionism, but calling it protectionism is honestly too grand. It's Big Crybaby Trump taking his ball and going home. There's no deeper thought at work here, or honest attempt to contain an ideological foe. It's about rolling back the clock to the 1950s and 1960s when the US had access to a global market and had no competitors.

The US is the largest market for English-language goods, and, well, pretty much everything else. It's a great market full of great customers, and people want to sell there. That's about it, though. If the US takes access to American customers off the table, the discussion is over because the US sure isn't offering anything else.

China's domestic market is incredibly restrictive, which isn't good, but at least they're offering some kind of value.

Thinky bits were all made in California, and the rest was relatively straightforward. I'm not sure it would have limited things too much, at least on the supply side. Demand side would have stung more. I know if I ran a country in the 1970s and the US said "no export, only import" about computers, I would have done almost anything to block US access to my market and build my own.

Supply side would be a bigger issue today: computer PCBs and semiconductor fabs use crazy amounts of incredibly toxic chemicals. EPA crackdown is why Intel moved their fabs overseas, for example. The whole Bay Area is a superfund site because of Intel and Fairchild dumping those chemicals. Intel might have to use cleaner, more expensive processes if trade barriers keep going up.



Nope, moat is economic rent. I meant it the same way Thiel and Buffet did. The only way you can survive today is if you are the beneficiary of some market barrier that prevents titanic conglomerates from crushing you with money and manpower. Individual creative achievement and hours logged are not enough. Copyrights and patents sometimes are, but just barely. The sweet spot is winning the network effect lottery, but that's only good enough to get you bought out.

****'s baaaaad. This is why almost nobody's starting businesses in the US anymore.

Amazon isn't even really a conglomerate yet.

Well, it's never a good idea to cite someone's own words back at them and tell them what they really meant, but...



Seems pretty clear that you were using moat as competitive advantage here. (Something is still a moat even if its not effective. It's just a bad moat.) But I'm not going to push too hard on this. (And, whatever, you can claim there's some amount of ambiguity in the scare quotes surrounding the word "moat").

And it's also pretty clear that Buffett was also using the term to mean competitive advantage when he first said it here in 1999:



http://archive.fortune.com/magazines/fortune/fortune_archive/1999/11/22/269071/index.htm

Mind you, competitive advantage includes economic rents, but it's not reducible to or coterminous with it.

Heh, the end of Buffett's talk (which was from 1999):

Go figure that Louis Brandeis coined this term! The left should really talk more about Brandeis. It seems like in Brandeis there's a relevant and moral (and economic) vision of America that could be retrieved and tied to an historical figure as a way of casting economic reform as something that's genuinely American, rather than as something that's un-American (which is a move that many conservatives make, for example, when they cast the rise of the DSA and Alexandria Ocasio-Cortez' primary win as heralding the "Europeanization" of American politics. They also sometimes say the same thing about Trump, as if "populism" were some kind of foreign import that has no precedent in American history and so must have come from without).

Anyone else notice how the terminology for what Trump, Geert Wilders, Marine Le Pen and, formerly, UKIP, keeps changing? It's been a long time since we called it neo-nationalism, but in some ways I think that was the most apt term for it. Populism isn't horrible, inasmuch as it captures the aspirations of the masses to disrupt the political and cultural elites' hold on power and elect leaders that more directly pursue the interests of "the masses" against the more privileged classes in society -- certainly relevant. But I think neo-nationalism captures better the discontent with the perceived decline of national sovereignty given the current state of the international system. Responding to weakening national sovereignty in the face of "globalism" seems very much to be the impulse behind "America First", for example.