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Economic Termites: Monopolies not noticeable enough for most of us

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Re: Economic Termites: Monopolies not noticeable enough for most of us

#271

The fundamental problem all these examples are linked to is the rise of centralized power in the economy, and the antidote has been known for a long time, see this 1952 book by John Galbraith: https://en.wikipedia.org/wiki/American_Capitalism > "...private decisions could and presumably would lead to the unhampered exploitation of the public, or of workers, farmers and others who are intrinsically weak as individuals…

The utility sector has a 10% profit margin. Hardly an example of a monopoly abusing its position. If utilities were nationalized the maximum possible gain is 10% and the potential loss is the unlimited capacity of the government to waste resources.

10% profit margin says not much.

Maximum 10% gain is not true for example because a contracted utility has little pressure to improve services, create new services, invent new energy processes, open or serve new markets. They can go with the generic political will and collect their garanteed 10%. Private enterprise wins or loses potentially big specifically by not doing that.

Maximum 10% gain is also not true for example because there is little pressure to "do it right" from an economic outcome point of view (when to plan expansions, how to schedule maintenance). Skipping the extremely politically incorrect example.

Maximum 10% gain is also not true for example because the current sector rarely has the opportunity to expand dramatically to support a dramatic new industry. (In that case, the gain would come from the new industry - AND the expanding utility sector) Even the Pacific North West did it the other way around: available surplus energy caused new industry to settle there.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#272
post #246

Earlier quoted context omitted.

> Again, you're conflating "how people feel about the economy" and "how the economy is actually doing". Indeed. And you're suffering from the delusion that there's some kind of distinction here that matters. There isn't. The economy fucking sucks. It sucks because normal people feel trapped and helpless in the face of corporate power and constant, rampant unethical conduct and cheating that seems to permeate literall…

Yeah. For normal people, "I am the economy". That is, I don't care about the national economy or the world economy. I don't care about how many widgets get produced this month. What difference does it make to me if the national economy is doing great, but I'm going broke? I care whether I can afford to buy what I need this month. To me, that's the economy. (With "I" meaning the average person, not me personally.)

Yet as a whole, people estimate the nation's economy worse than their own. Clearly this can't be the case if everyone thinks their economic circumstances are the nation's economic circumstances, because if that were the case you'd expect them to align on a national basis.

https://www.pewresearch.org/politics/2024/05/23/views-of-the...

Re: Economic Termites: Monopolies not noticeable enough for most of us

#273

Earlier quoted context omitted.

That’s a pretty weird take to me. Crime stats and polling of people’s perception of crime show this as clearly the wrong approach for instance. Most studies show that no matter what direction crime is going in, a substantial majority of people think their neighborhoods are safer and that everywhere else is basically a war zone that is getting worse. There’s a total disconnect locally/nationally in perception that is…

It's probably related to how much or little we read about crime more than any true crime level. If we see 10 news articles everyday about crime, then we think there are a lot of crime around. If we read zero articles about crime, then it barely exists in our perception. What happens in reality does not affect our perception as much, as we probably seldomly see it for ourselves and when we see it, it would be difficul…

I don't buy this completely.

The measure of the perceived crime level in one's neighborhood isn't really dictated by stats or news, but your own and your neighbours lifes.

I know where I live is quite calm bar some occasional burglar, and I know it because I live in the place and talk to people everyday.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#274
post #84

Earlier quoted context omitted.

Why do you exclude the possibility that talking heads in news and politics are pedaling the idea that consumers feel it’s terrible? Most everyone I know seems to be living it pretty good with much less concern for the future. Certainly compared to 2023 and even compared to 2019.

What's the statistical relevancy of your "everyone I know" sample for US population in general? Are people you know of different ages, social classes, races, upbringings and living locations to capture the sentiment of population? Or are they all well off people in a few rich areas?

They are concentrated in a major metro area that was among the worst affected by the pandemic in America. They span many ages, social classes, races, upbringings, and jobs, from tech to blue-collar union work.

Be that as it may, my point is that the possibility exists and is almost equally as likely. Not that it is correct.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#275
post #263

Earlier quoted context omitted.

It's not about the size of the mill, but the capital cost to build a new one. No one is willing to invest the capital in building new mills because the old ones can always undercut their prices and kill them long before they turn a profit. It's the economic equivalent of a prisoner's dilemma.

That works against a large new entrant. No industry is going to lower their massive collective profit just to shoo away a small new entrant.

Lumbermills are a local industry since transportation is a very significant fraction of the final cost. No one is shipping wood from Oregon to a mill on the East coast to sell to a construction company in California, so every mill is very much sensitive to local competitors.

Ironically it's the larger mills that are insensitive to this dynamic, since they supply huge national customers like the big box stores or export to international markets. If Home Depot or Lowes decide their suppliers need a new mill, they finance it and it gets built.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#276

Four. That's the magic number. There have to be four competitors of significant size before prices go down. There are both EU and US studies substantiating this. It's been seen in cellular phone networks, ISPs, drugstores, and banks. Drop below the threshold of four, and the magic happens. Prices go up, margins go up, and consumers lose. Four should be the basis of antitrust policy. Less than four, and there are two…

Speaking generally, not to you specifically, it seems like a ton of people see the problems created by capitalism and decide the solution is even more capitalism.

I don't think there's a magical number of competitors that fixes things. We see an interesting phenomenon in commercial landlords where we have a ton of players but they all use the same software [1], which creates an effective monopoly even though it's not a classical monopoly.

The problems we see in so many sectors were accurately described in the 1800s by just analyzing the workers relationships to the means of production. Internet access is a textbook cexample. National ISPs should not exist. They are rent-seeking parasites. The best Internet is in places with municipal broadband.

It's just not feasible or economical to have 4+ broadband networks being built in an area. [1]: https://www.propublica.org/article/yieldstar-rent-increase-r...

Re: Economic Termites: Monopolies not noticeable enough for most of us

#277
post #263

Earlier quoted context omitted.

It's not about the size of the mill, but the capital cost to build a new one. No one is willing to invest the capital in building new mills because the old ones can always undercut their prices and kill them long before they turn a profit. It's the economic equivalent of a prisoner's dilemma.

That works against a large new entrant. No industry is going to lower their massive collective profit just to shoo away a small new entrant.

[deleted]

Re: Economic Termites: Monopolies not noticeable enough for most of us

#279

Four. That's the magic number. There have to be four competitors of significant size before prices go down. There are both EU and US studies substantiating this. It's been seen in cellular phone networks, ISPs, drugstores, and banks. Drop below the threshold of four, and the magic happens. Prices go up, margins go up, and consumers lose. Four should be the basis of antitrust policy. Less than four, and there are two…

How many more humans would be needed to support 4 of every company type?

Re: Economic Termites: Monopolies not noticeable enough for most of us

#280

Earlier quoted context omitted.

How about Uber vs. Lyft, for example? Do you think there is competitive pricing here?

- they compete with local taxi firms - they compete with other modes of transport - prices have risen substantially after the VC land grab tailed off

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