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Last gasps of the rent seeking class?

geohot.github.io

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Re: Last gasps of the rent seeking class?

#121

Post by dragonwriter »

jmyeet wrote: post #59
dragonwriter wrote: post #53

Earlier quoted context omitted.

> This argument is a bit scattered. "Rent seeking" is being misused here. It's being used in a more literal-meanings-of-the-words sense ("pursuing monopoly rents") rather than the narrow economic term-of-art sense of "pursuing monopoly rents through influence over public policy by means that do not create, or which inhibit the creation of, additional wealth" (the definition you seem to be complaining about it not adh…

No, a moat is a competitive advantage/ OpenAI in particular is predicated on the belief that they will have a compeitive advantage. ASML is a compeitive advantage with EUV (for now). You can overcharge for if you have a compeititve advantage but that's not the same as rent-seeking. Rent-seeking is fundamentally intermediation like a health insurer putting themselves between a patient and a healthcare provider or priv…

> No, a moat is a competitive advantage

No, a moat is a barrier to people closing the gap of an existing competitive advantage. The barrier is literally the point of the metaphor. If there is no barrier, there is no moat, just a transitory advantage; that's the whole basis of the famous "we have no moat and neither does OpenAI" memo at Google; its not that the big established players had (at that time, or now) no current competitive advantage over open source competition, its that there was no structual barrier preserving it.

> Rent-seeking is fundamentally intermediation

No, rent-seeking is using influence over public policy as a means to extracting monopoly rents. State policy favoring intermediation is one manner of rent seeking, yes.

> Rent-seeking would be Microsoft lobbying lawmakers to require schools and governments to purchase Windows, for example.

That is an example, but lobbying for specific mandates for purchases from the specific firm is a fairly extreme case of rent-seeking, not the general case; a more common for of rent-seeking is firms in a narrow group of leading incumbents lobbying for various standards (either for public market access or government contracts) to be set for the industry that are not a particular burden for existing large firms to meet but which create additional friction for new competitors. In the specific case of software, this can include lobbying for rules that specifically treat open source solutions as suspect and dangerous, as well.

Re: Last gasps of the rent seeking class?

#122

Post by nine_k »

solarkraft wrote: post #86

> The best anyone can hope for is a free market, with everything properly priced. But for decades, the American market has not been free. It’s used purposefully added friction to exploit a time asymmetry between the business and you. And due to things like call centers, this has been very profitable for the businesses. Cable companies and insurance rely on the fact that your time is more valuable than theirs. They ca…

The market actually is not very free, because large companies increasingly use their weight to pull off things that smaller companies or individual customers cannot afford: lobby to obtain preferences, tax exemptions, exclusive deals, other favors that violate or at least skirt the law.

But running a call center overseas is not one of these things.

Re: Last gasps of the rent seeking class?

#123

Post by thelastgallon »

marginalia_nu wrote: post #111
kibwen wrote: post #83

> But for decades, the American market has not been free. The grand, boneheaded naivete to fail to understand that middlemen are an emergent and intrinsic property of free markets in practice.

Antitrust legislation used to be very effective at dealing with this sort of stuff. These laws were designed to put an end to the gilded age (Standard Oil in particular), and accomplished what it set out to do. Though Ronald Reagan dared asked what nobody else thought to ask, "what if monopolies ... good?", so now we're back with a new set of Morgans and Vanderbilts.

The Morgans, Vanderbilts, etc at least built things that create value (and extracted wealth from them), things that didn't exist before in the economy.

The billionaires of today are just pure rent extraction schemes on things that already exist, make money by enshittification of what is already there. Nothing of value ever needs to be created. They use the govt to help them, after all why create anything new at all, when you can just take it?

Re: Last gasps of the rent seeking class?

#124

Post by psadauskas »

solarkraft wrote: post #86

> The best anyone can hope for is a free market, with everything properly priced. But for decades, the American market has not been free. It’s used purposefully added friction to exploit a time asymmetry between the business and you. And due to things like call centers, this has been very profitable for the businesses. Cable companies and insurance rely on the fact that your time is more valuable than theirs. They ca…

A "free market" is one in which all the participants of the market have perfect information and act completely rationally. This is, of course, an academic ideal, similar to solving a physics problem that tells you to ignore friction.

What we have is a "capitalist market", where those with more power (capital) within the market leverage it to exploit the other participants. Capitalists use their money to extract as much money as possible from a segment of the market, usually destroying it in the process. But for a beautiful moment in time they created a lot of value for shareholders!

Re: Last gasps of the rent seeking class?

#125

Post by zozbot234 »

dragonwriter wrote: post #121
jmyeet wrote: post #59

Earlier quoted context omitted.

No, a moat is a competitive advantage/ OpenAI in particular is predicated on the belief that they will have a compeitive advantage. ASML is a compeitive advantage with EUV (for now). You can overcharge for if you have a compeititve advantage but that's not the same as rent-seeking. Rent-seeking is fundamentally intermediation like a health insurer putting themselves between a patient and a healthcare provider or priv…

> No, a moat is a competitive advantage No, a moat is a barrier to people closing the gap of an existing competitive advantage. The barrier is literally the point of the metaphor. If there is no barrier, there is no moat, just a transitory advantage; that's the whole basis of the famous "we have no moat and neither does OpenAI" memo at Google; its not that the big established players had (at that time, or now) no cur…

> If there is no barrier, there is no moat, just a transitory advantage

A moat can very much be transitory and caused by natural (or at least, not specifically intended) factors. Perhaps we could then call it something different, like a river as opposed to a moat, but the strategic effect is the same either way so it makes sense to use the established term for it.

Re: Last gasps of the rent seeking class?

#127

Post by bigbadfeline »

adi_kurian wrote: post #126
altairprime wrote: post #108

Earlier quoted context omitted.

People often confuse “free” with “unregulated”, too.

No they don't. That is the very definition.

>> People often confuse “free” with “unregulated”, too. >No they don't. That is the very definition.

Using that definition amounts to classifying all real markets as non-free.

Unregulated markets cannot exists in reality or in a sound theory, only in wishy-washy fairy tales.

Re: Last gasps of the rent seeking class?

#128

Post by temp8830 »

yabutlivnWoods wrote: post #89
WJW wrote: post #77

Earlier quoted context omitted.

People used to call him "egohot" back in the day when he was cracking playstation games, because he was already incredibly arrogant even at a young age.

Yeah. This has strong self-selection bias. Egohot thinks about this stuff a lot so obviously everyone does! Most people only care about money as they have no choice. Absent a cash-first system money has become a social construct. The valuation of a dollar is entirely ephemeral now. I see that social reality becoming more realized and the existing social system around money collapsing due to generational churns attenu…

How is paper money any less of a social construct? How is a gold coin that you can't actually use in any other way than trading it to another hairless monkey?

Re: Last gasps of the rent seeking class?

#129

Post by JambalayaJimbo »

mtlynch wrote: post #27
palmotea wrote: post #15

> The best anyone can hope for is a free market, with everything properly priced. But for decades, the American market has not been free. It’s used purposefully added friction to exploit a time asymmetry between the business and you. And due to things like call centers, this has been very profitable for the businesses. Cable companies and insurance rely on the fact that your time is more valuable than theirs. They ca…

> If a company has the capability to hire literal people to waste your time, they can deploy more AI than you to waste the time of your AI. I don't totally buy OP's argument, but I think you're dismissing it unfairly. His point is that in the pre-LLM world, if a company wants to waste your time, they can hire a call center employee overseas for US$4/hr and make you wait for an hour to talk to them for 30 minutes. If…

But the company can deploy economies of scale to make their AI chatbots defeat yours? Company A can still hire someone in India to continually change their chat bot protocol or whatever to make it difficult for you chat bot to succeed in getting support.

Re: Last gasps of the rent seeking class?

#130

Post by registeredcorn »

marginalia_nu wrote: post #111
kibwen wrote: post #83

> But for decades, the American market has not been free. The grand, boneheaded naivete to fail to understand that middlemen are an emergent and intrinsic property of free markets in practice.

Antitrust legislation used to be very effective at dealing with this sort of stuff. These laws were designed to put an end to the gilded age (Standard Oil in particular), and accomplished what it set out to do. Though Ronald Reagan dared asked what nobody else thought to ask, "what if monopolies ... good?", so now we're back with a new set of Morgans and Vanderbilts.

If you haven't, I'd encourage you to give "The House of Morgan" by Chernow a read.
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