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America has a monopoly problem

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Re: America has a monopoly problem

#101

Post by emodendroket »

jasode wrote: post #77
losteric wrote: post #68

Earlier quoted context omitted.

I agree - didn't feel it was worth mentioning considering the original and the criticism I linked to :) I like drawing parallels between economics and ecology... monopolies are farms, massive artificial monocultures that suppress natural competition and extract value for the profit of a few. They embody a cycle of growth and stagnation. A healthy economy is more like a jungle, innumerable smaller competitors with div…

>A healthy economy is more like a jungle, innumerable smaller competitors ... that leads to fascinating innovation. I think you missed PT's point. The word "monopoly" has overshadowed his message. He wants people to pursue "blue ocean"[1] ideas to be innovative . Instead of starting a company that makes another generic clone of aspirin, you pursue a drug that cures breast cancer . Or instead of building a business th…

Does the typical investor really care if the idea is a cure for breast cancer or "driving all existing providers in some space out of business and then mopping up the market"?

Re: America has a monopoly problem

#102

Post by zanny »

chrisseaton wrote: post #83
nnash wrote: post #81

Earlier quoted context omitted.

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?

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.

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".

Re: America has a monopoly problem

#103

Post by rayiner »

Synaesthesia wrote: post #92
rayiner wrote: post #82

Earlier quoted context omitted.

Corporations have outsize influence on the government because they control jobs, which is the single thing Americans care about more than anything else. The Fortune 500 directly employ 17% of the U.S. workforce, and indirectly employ many more ( e.g. employees of parts companies that sell to Ford/GM, contractors who install fiber for AT&T). The tax provisions companies take advantage of aren't "loopholes," they exist…

I don’t think so. Why then the phenomenon which the government has permitted of outsourcing US jobs? Have the tax cuts created more jobs? Was there a condition attached that they need to employ more people? It’s quite simple, with financial power comes political power. Elections cost a lot of money these days and if you look at the donor list of both parties it’s dominated by large corporations. Edit: a more useful m…

> Why then the phenomenon which the government has permitted of outsourcing US jobs?

The government doesn't "permit" outsourcing of U.S. jobs. Thanks to the technology created by folks here on HN, there is nothing the government can really do if IBM decides to fire a worker in New York and hire one in Bangalore. The only thing the government can really do is offer concessions and incentives to reduce the bleeding.

> It’s quite simple, with financial power comes political power. Elections cost a lot of money these days and if you look at the donor list of both parties it’s dominated by large corporations.

The party that spent the most money just lost the most recent major election, so I'm not convinced money really matters much. In reality, we spend a minuscule amount on politics given the size of the country. About 0.0037% of GDP on Presidential elections, and 0.019% of GDP on lobbying. For context, we spend less on lobbying each year than we do on specialty coffee.

If money really bought elections, companies would spend a lot more of it trying to do so.

Re: America has a monopoly problem

#104

Post by zanny »

athenot wrote: post #55

> 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.

Intellectual property in general is rent seeking. The fixed costs of producing IP are on the hands of creators, who often use third parties (or parent companies) that act as middle men who take fixed resources and extract infinite revenue from them through rent seeking on either licenses or subscriptions.

This is how all the stores selling IP make so much money, how all the streaming services are so profitable, etc all while not producing any original content themselves. And it applies to creators who direct sell themselves, because they aren't charging marginal costs on IP licenses - they are rent seeking their existing properties. Often to fund the creation of new ones, but I don't think many people argue the morality of rent seeking based on how the owner spends the rent. Any landlord can invest the rents they collect into new building construction, but that will still just lead to generating more rents.

Re: America has a monopoly problem

#105

Post by s73ver_ »

charlesdm wrote: post #67
Synaesthesia wrote: post #64

Earlier quoted context omitted.

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%.

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%,…

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

Which would do what, exactly, for most people? Precisely nothing.

And they'd use loopholes to bring their tax burden down to 0 anyway.

Re: America has a monopoly problem

#106

Post by s73ver_ »

refurb wrote: post #84
Clubber wrote: post #73

Earlier quoted context omitted.

>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?

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 cons…

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.

Re: America has a monopoly problem

#107

Post by bythckr »

whistlerbrk wrote: post #14

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. Everyt…

"America is NOT corrupt. Every corrupt practice is being lobbied to be legalized. USA has legalized corruption." - a quip I heard somewhere.

Re: America has a monopoly problem

#108

Post by nickpsecurity »

rayiner wrote: post #82
Synaesthesia wrote: post #64

Earlier quoted context omitted.

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%.

Corporations have outsize influence on the government because they control jobs, which is the single thing Americans care about more than anything else. The Fortune 500 directly employ 17% of the U.S. workforce, and indirectly employ many more ( e.g. employees of parts companies that sell to Ford/GM, contractors who install fiber for AT&T). The tax provisions companies take advantage of aren't "loopholes," they exist…

"Corporations have outsize influence on the government because they control jobs, which is the single thing Americans care about more than anything else."

They have influence on government because they pay politicians bribes that get them elected. Endless evidence to support that where companies or industries give money, politicians get elected, and politicians pass laws to give those companies benefits they want that aren't good for voters or even the voters money. The politicians get wealth and power in return. End of story.

The rest is narrative the politicians use to distract from that. Now, they do like bringing jobs and contracts into their districts to increase their votes. They operate on money, though. Recent example with ISP's:

https://www.theverge.com/2017/3/29/15100620/congress-fcc-isp...

The oil companies make it even more obvious. They're making insane profits but still get tax subsidies from the politicians they paid off.

https://www.theguardian.com/environment/2015/may/12/us-taxpa...

Re: America has a monopoly problem

#109

Post by charlesdm »

s73ver_ wrote: post #105
charlesdm wrote: post #67

Earlier quoted context omitted.

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%,…

"If you were to reduce the US corporate tax rate to 10%, a lot more profit would be booked in the US again." Which would do what, exactly, for most people? Precisely nothing. And they'd use loopholes to bring their tax burden down to 0 anyway.

You're right, it would do nothing. The reduced tax base is just the result of increased tax competition, offering businesses a better alternative. I don't believe you can bring it back.

If you want to lower or eliminate corporate taxes (with a positive effect for people), you would need to increase dividend and capital gains taxes to compensate. You don't need to collect more corporate tax than is collected today, but if you can create more jobs, that's a net win.

Re: America has a monopoly problem

#110

Post by alasdair_ »

abandonliberty wrote: post #96
whistlerbrk wrote: post #14

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. Everyt…

What you have is natural selection. Systemic corruption is itself a deterministic outcome/symptom when corruption is an adaptive trait. Unfortunately many undesirable behaviors are adaptive: the risk-adjusted rate of return is positive. 'Bad actors' have much more to gain from engaging in them than watchdogs have in stopping it. You will always lose the fight against corruption in the long run because as the war goes…

From the Iron Law of Oligarchy page: "no sufficiently large and complex organization can function purely as a direct democracy"

I'm not sure this is proven yet. Certainly in the past, I'd have agreed, but with communication via the Internet making realtime decision-making between all members of a democracy possible, I think direct democracy is theoretically possible at least.

If not absolutely direct, then at least having the ability to instantly revoke a mandate from someone you have entrusted could go a low way to limiting the power of an oligarchy, as could entrusting different individuals and groups with a single person's vote, depending on the issue. For example, maybe I'd trust a particular economist to vote on my behalf for specific economic proposals, but I'd want Greenpeace to vote on my behalf for anything to do with, say, baby seal clubbing.

So long as the individuals can instantly take back the voting power they have entrusted to someone else, a reasonable semblance of direct democracy could work.

In practice, of course, it would be a hell of a mess to get everything functional, I just don't buy the notion that it's impossible in a world where everyone can communicate with everyone else essentially for free.

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