Peter Thiel (who works with YC) will tell you that monopolies are good for the world.
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America has a monopoly problem
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Re: America has a monopoly problem
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Re: America has a monopoly problem
#53America 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…
I think it goes a step deeper. Imho the issue starts with the fundamental distrust of government. Lacking the ability to see government as a valid leader, Americans turn to corporations and billionaires. They really do believe that Apple and Dow chemical can do a better job leading the country than any elected politician. They are not worried about the monopolies. They should be, any economist would agree that monopo…
This thread is confusing State granted monopoly with Market granted monopoly. Economists usually talks about the former.
Re: America has a monopoly problem
#54America 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…
> 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. That sounds a little too extreme. Has vertical integration never occurred without the help of tax law?
It's a little odd of a comment as well since there is a plethora of small business incentives that the big guys don't get.
It's much more complicated that what the OP laid out.
Re: America has a monopoly problem
#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.
Re: America has a monopoly problem
#56America 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…
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.
Re: America has a monopoly problem
#57[deleted]
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Re: America has a monopoly problem
#58Earlier quoted context omitted.
Yup. Amazon receiving 238 bids of localities falling over themselves to handover tax credits and other goodies is the example I've been thinking about recently. https://www.reuters.com/article/us-amazon-com-headquarters/a... How to fix it though?
The EU has a set of laws called State Aid, which disallows member states from subsidizing business to the detriment of their competitors (either other businesses or other states). Government can improve infrastructure, but cannot literally hand out cash to build a factory, or anything like that. This exists even though EU nation states have far more individual power than US states. https://en.wikipedia.org/wiki/State…
In reality, these days member states will introduce laws for certain players that then anyone can use. It's not state aid then, but the result is the same.
For example, Belgium recently updated certain tax laws to reduce the amount of withholding tax payable by certain major foreign investors, to keep the AB Inbev holding company in Belgium instead of letting the shareholders move their holding entity to the UK.
Re: America has a monopoly problem
#59> 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.
That's not what rent seeking means in this context.
Re: America has a monopoly problem
#60America 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…
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…
so if if someone takes performance enhancing drugs that has not yet been discovered isn't cheating, they are being innovative.
treat it like the olympics. if an athlete that takes a performance enhancing drug that has yet to be prohibited, they still loose their medals and cannot compete.