
America has a monopoly problem - Futurebot
https://www.thenation.com/article/america-has-a-monopoly-problem-and-its-huge/
======
OtterCoder
This is brilliant. I recently wrote in to my senator about net neutrality. His
reply was a breathtakingly convoluted justification of not regulating
companies like Comcast because antitrust laws would take care of it. I've
never felt so insulted.

~~~
chrisseaton
You felt insulted because he has a different opinion to you? Or did he write
something insulting in his reply?

~~~
nnash
You can count the number of companies that own all American media on one hand.
How is it that anti-trust is "taking care of it" again?

~~~
chrisseaton
Maybe he thinks more than one company is sufficient then? But that’s still
just a civil difference of opinion! It’s not insulting to be disagreed with
I’m afraid.

~~~
zanny
Except in the context he is speaking of, extremely few Americans have more
than one company supplying them with Internet access. It is definitionally a
monopoly, and to say existing anti-trust legislation is sufficient is saying
the monopolies as they exist now are acceptable and nothing needs to be done.

It is a dismissive comment from the senator, he should feel insulted. It is
like saying "help I'm bleeding" and the guy next to you saying "its not that
bad, get over yourself".

~~~
chiefalchemist
I'm not so sure monopoly captures the root of the internet access problem.
Yes, in many markets there is a single provider (e.g., Comcast). There are
other providers (e.g., Verizon). But neither enters the other's markets.

I'm not suggesting their is a spoken conspiracy. But when neither side
benefits from direct competition, what's the word for that?

~~~
OtterCoder
Trust, in the business sense of the word.

[https://en.m.wikipedia.org/wiki/Trust_(business)](https://en.m.wikipedia.org/wiki/Trust_\(business\))

In the days of Rockefeller, these things were a little more formal. Nowadays
companies know better than to put such silent agreements in writing.

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nikolay
Monopolies are a natural phenomenon in capitalism. I'm not sure why people
glorify capitalism as much, given the fact that competition is impossibly hard
in many areas, and that to reduce costs, and remove competitive pressure,
companies tends to consolidate, i.e. reduce competition. Neither socialism nor
capitalism makes sense today. We need a totally new system, but it's really
hard to make a dent into the status quo, which is well-entrenched, and would
resist any change!

~~~
astrodust
"Socialism" and "capitalism" are not switches you turn either on or off,
they're a set of policies and practices you can apply to varying degrees and
extremes.

The military is quite socialist as when you enlist you're given food, housing,
equipment, medical care, and other things to perform your job, but it's also
part of a large capitalist system where equipment and supplies are provisioned
from a (theoretically) competitive marketplace.

What we need to do is find the right balance between dog-eat-dog individualism
and insufferable collectivisim.

~~~
nikolay
I disagree that the solution is a balanced one somewhere between the only two
puristic and unrealistic options as in both money is key, and I disagree that
it should be the centerpiece of our society as it's already proven to be a
weak motivator and leads to very negative consequences.

There are good things in both orders, we need to learn from them, but
something in the middle we already have in EU, and it's not working so well.

~~~
astrodust
Everyone is in the middle because no country, no political state of any kind,
has ever been, nor likely ever will be 100% capitalist or 100% socialist.
Achieving such extremes is so impractical as to be impossible.

The difference between the EU and America is actually pretty slight on these
two scales, but tiny shifts in policy can have a huge impact on society.

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whistlerbrk
America has a corruption problem. The ability for companies to vertically
integrate and essentially make smaller businesses non-competitive can only
occur when you don't have to pay the taxes your smaller competitors have to
pay and don't have to obey the same laws your competitors have to obey.

We have a systemic corruption problem (manifested in lobbying) coupled with
greed on scales we've never seen before. Everything else is just a symptom of
that problem.

~~~
curiousgeorgio
Think of it this way: it's not that the larger companies are _breaking_ the
laws or simply _not paying_ taxes that they owe - they're just being more
innovative in how they approach those things. In a global economy, when
there's pressure to pay lower wages by outsourcing labor, pay lower taxes by
organizing some or all of the company abroad, or exploit loopholes in domestic
laws for greater efficiency, that's just what you're going to do (given enough
expertise and resources).

It's laughable to think a country could solve any of those things through
stricter legislation; that will simply encourage those companies to move
_more_ of their operations to jurisdictions with more advantageous
laws/taxes/labor/etc.

So how do you "level the playing field"? One way would be bringing those
advantages to smaller companies through businesses that exploit those same
loopholes / tax strategies, providing them as services to companies who
otherwise couldn't afford doing it themselves (i.e., exploiting legal
loopholes as-a-service, international tax strategies as-a-service, etc).

Or, you embrace the global economy, specialize in what your country can do
most efficiently (hint: it's _not_ manufacturing anymore in the US), and make
it advantageous for companies to keep operating domestically. You lower taxes
for everyone, so even the companies with few resources can enjoy the eased
financial burden of taxes that normally only the big guys could avoid. In
short, you _compete globally_ rather than stick your head in the sand
pretending that your country is somehow isolated from the rest of the world
and you can fix everything through legislation.

~~~
Synaesthesia
You’re not mentioning the outsize influence that corporations have on
government which leads to them permitting these loopholes. It can be fixed by
legislation.

In 1952 corporate tax in the US was 33% of total revenue. Today it’s less than
9%.

~~~
charlesdm
Corporate taxes abroad were also often higher than the US rate at the time.
Now they are much lower. If you sell X in, say, the UK -- as a company you
often have the option: book the profit in the UK, or in the US.

There's not much laws can do to change that, that is just the way having the
flexibility to structure your business in whatever way you prefer works.

If you were to reduce the US corporate tax rate to 10%, a lot more profit
would be booked in the US again.

~~~
Clubber
>If you were to reduce the US corporate tax rate to 10%, a lot more profit
would be booked in the US again.

Until other countries lower theirs, then it's just a race to the bottom, no?

~~~
refurb
_then it 's just a race to the bottom, no?_

The "race to the bottom" is the reason why free markets are so prosperous.
Each business independently works to reduce costs and competition forces
companies to share those savings with consumers.

The best example of the "race to the bottom" stopping are monopolies (often
gov't supported) like Comcast where they can sit fat and happy raking in a ton
of profits and telling consumers to shove it.

~~~
s73ver_
But in this case, we're not talking about business. We're talking about the
funding to pave our roads, run our schools, be able to fight fires, and all
that other good stuff we need.

~~~
refurb
The gov't is well within their right to change the tax code as they see fit.
And they do all the time. It's not like we're seeing tax receipts declining.
They've done nothing but increase over the last 100 years.

~~~
ionised
> They've done nothing but increase over the last 100 years.

Have they increased in line with the larger national budgets required for
basic public services?

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scarface74
From the article

 _Firms like Microsoft led in the innovation in creating new barriers to
entry. How could one compete with a browser provided at a zero price._

I think what happened to Microsoft is the perfect example of how to overcome a
monopoly.

20 years ago, everyone thought that Microsoft’s monopoly was unassailable.
Google barely existed, Facebook didn’t exist, Amazon was a bookseller and
Apple was basically bankrupt.

20 years ago, Netflix had a few million DVD customers and AOL was the largest
ISP.

Who knows what will happen in the next 20 years?

~~~
marinman
But importantly, the government went after Microsoft for anti-trust and
actually won even if they didn't break them up. It's impossible to really know
the counter-factual of what would have happened if it wasn't sued for anti-
trust. But, you can safely say it wouldn't have thrown a lifeline to Apple
with the investment and it may have been much more aggressive in these
emerging spaces. I still think it was still not fundamentally "ready" for the
Internet and mobile but I do think that lawsuit made it much, much friendlier
to newcomers.

~~~
scarface74
_But, you can safely say it wouldn 't have thrown a lifeline to Apple with the
investment and it may have been much more aggressive in these emerging
spaces._

Microsoft "saving" Apple is apocryphal at best. The $250 million that MS
invested wouldn't have made a difference when Apple lost a billion the same
quarter and spent $100 million buying out PowerComputings Mac license.

Microsoft tried aggressively to get into mobile, search, and the music
business. They failed at execution.

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athenot
> _We have become a rent-seeking society_

It just dawned on me while reading the article that this accurately describes
the shift from licensed software to SaaS that has been happening in the past
decade.

~~~
wu-ikkyu
The digital landscape seems to be growing increasingly feudalistic. Users have
increasingly less control over the products and services they use.

-Instead of buying a movie or a song, you stream it

-You don't own your data in the cloud

-You don't own the music you buy from Apple

-You can't even take the battery out of many newer model phones

~~~
deusum
feudalism

n.

A political and economic system of Europe from the 9th to about the 15th
century, based on the holding of all land in fief or fee and the resulting
relation of lord to vassal and characterized by homage, legal and military
service of tenants, and forfeiture.

~~~
trophycase
Parent clearly means feudalism in the abstract sense.

~~~
deusum
Honestly, I searched for the definition expecting to disagree. I posted it
when I realized parent was right, and figured I'm not the only person who
hasn't studied feudalism in a while.

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thecombjelly
America has a capitalism problem. What the article fails to address is that
the root cause is really capitalism. Under capitalism wealth and power always
concentrates, which in the case of businesses, that eventually means bad
monopolies. Under a representative democracy that also means politics will
always be corrupted because those with money and power will always be
benefited by controlling politics, and they have the money and power to do so
(who owns the news media? who can afford to buy off politicians, whether they
start corrupt or not?). While the power of monopolies ebbs and flows as those
without capital get angrier, the monopolies will always come back because
that's what capitalism does.

Monopolies are not inherently bad. It's entirely possible to have a monopoly
and have a great thing that everyone likes and is happy with and which keeps
innovating. But under capitalism the primary incentive is the accumulation of
capital which rarely lines up with creating something great long term.

~~~
ianai
I can think of at least one way to diminish companies power over legislatures.
Pay representatives enough that they’re indifferent to corrupt forces. It’s
not like there an expectation for representives to be broke.

~~~
beart
Define "enough".

I don't think this solution really works. For some folks, nothing is ever
enough. Then you also need to consider that it is less about money for some
and more about friends and power. Maybe I don't do what corporations ask
because they are going to pay my campaign. Maybe I do it because it makes me
feel like a big man being the person they all come to for favors. Maybe I do
it to gain acceptance into an aristocracy. I don't know how you can compete
against that on a government salary, no matter how big.

Donald Trump is supposedly worth $3.5 billion. Do you think paying him more
money would change the way he governs? I only use him as an example because he
is the richest US politician, but there aren't too many poor ones at the
federal level.

I guess I just don't see how you could ever pay a politician enough to be
"indifferent to corrupt forces".

~~~
ianai
I’m dismissing Trump as an example as he’s a clear outlier.

How much do you figure you would have to pay Bill Gates to babysit? Unless
you’re in his immediate circle that’s going to cost quite a lot of money.
People react to incentives in relation to their current wealth. A chartered
flight or sweatheart real estate deal will mean a lot less to someone making
plenty for their job of representing the people. They’ll also be much more
sensitive to scandals.

------
menerva
Capitalism on a smaller scale is broken. Once you have achieved a monopoly
they become entrenched in the socio-political system.

On a global scale, where laws can't protect I.P. we will see innovation coming
out from new sources. If America is happy to stagnate, we will see India and
China leading the future.

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pc86
Web link doesn't work if you've already visited the site, including incognito.

~~~
autopoiesis
Archive link: [http://archive.is/02i6P](http://archive.is/02i6P)

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wiremine
American has an optimism problem. Or rather, optimism seems to be unequally
distributed. Feels like we need some leadership to raise our eyes to all the
opportunities out there, and how we can get to a better spot.

~~~
irrational
So, we need someone to show us how to make America great again?

~~~
wiremine
No, I think the opposite: current leadership is driven a lot of FUD. We need
some honest optimism.

~~~
ionised
The reason we don't have any of those people is becauses they all recognise
the rigged, cynical quagmire we have built for ourselves.

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brndnmtthws
Peter Thiel (who works with YC) will tell you that monopolies are good for the
world.

~~~
rayiner
They often are, because companies in highly competitive industries don’t have
the excess profits to reinvest in research. Computing as we know it is largely
the story of monopolies. Bell Labs bankrolled by the AT&T monopoly. Xerox PARC
bankrolled by the Xerox copier monopoly. The Internet bankrolled by the
ultimate monopoly (the military). The modern web bankrolled by the
Google/Apple duopoly.

~~~
wu-ikkyu
>companies in highly competitive industries don’t have the excess profits to
reinvest in research.

On the flip side, monopolies often have little incentive to invest in
improving their products/services, and find they can profit from making their
products cheaper/worse.

~~~
emodendroket
Or outright killing research that threatens their main revenue drivers. Like,
OK, we eventually got digital cameras, but Kodak didn't do anything with it
for a long time because they wanted to keep selling film. With graver
consequences, Exxon decided to suppress its own findings about climate change.

~~~
kazagistar
Another ongoing example: suppression of research into male birth control due
to fears of cutting into profits from the cash cow that is female birth
control.

