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On 4 November 2019, Techcrunch published an interview with Thomas Philippon, author of the book The Great Reversal: How America Gave Up on Free Markets, where he discusses the diminution of competition in many US market sectors.
From the Techcrunch article:
Economist Thomas Philippon's new book, "The Great Reversal: How America Gave Up on Free Markets," went on sale this past week, highlighting the United States' failure to block the country's largest companies from inhibiting fair competition.
"The broad picture is that competition is good, but surprisingly fragile," he said. "In today's environment, the U.S. is moving from a place where it was at the forefront of having free markets that worked pretty well for most people to being a laggard in many industries."
Philippon's premise isn't exactly breaking news, but the interview and his book give some good background as to how we got where we are, and how other nations are addressing these issues more (in some cases, much more) effectively.
The deregulation of major U.S. industries like telecom and energy in the 1970s and 80s sparked competition that lowered consumer prices and drove product innovation between competitors. Europe, on the other hand, lagged behind with more expensive internet, phone plans, airline tickets, and more until around 2000 when a major reversal of this trend began. Strikingly, when the EU strengthened deregulation and antitrust efforts to open its markets to more competition, it was the U.S. that reversed course.
[...] Based on Organization for Economic Cooperation and Development (OECD) data, the U.S. now has more regulations for opening a new business than every EU country except Greece and Poland — a complete reversal since 1998, when only the UK had fewer rules than the U.S. Per capita GDP growth in the EU outpaced that of the U.S. over 1999-2017. On a purchasing power parity basis, Americans have experienced a 7% increase in prices (relative to EU residents) for the same goods, due specifically to increased profit margins of companies with reduced competition.
The reason for this divergence? According to Philippon, corporate incumbents in the U.S. gained outsized political influence and have used it to a) smother potential antitrust reviews and b) implement regulations that inhibit startups from competing against them. As a result, the U.S. regulatory system prioritizes the interests of incumbents at the expense of free market competition, he says.
What say you, Soylentils? Is competition truly dead in many sectors of the economy, or are there ways to bring it back and keep it?
(Score: 2, Disagree) by The Mighty Buzzard on Tuesday November 12 2019, @12:21PM (26 children)
No, or low, barrier of entry is not a promise of capitalism or competition and never was. If it's an honest barrier of entry rather than someone running at a loss or otherwise trying to hamper competition, I have no issue with a high as hell barrier of entry; that's what investors are for.
My rights don't end where your fear begins.
(Score: 5, Insightful) by c0lo on Tuesday November 12 2019, @01:06PM (15 children)
Yeah, what were your words? Other people's money?
Will go until the small people's money run out** and only the big money people would get to invest... except there's no real motivation to do it, when mergers, acquisitions and reduced competition serve their interest better.
** those angel investors hunting unicorns? The scam is layering the shares, with guaranteed return for the initial investors and then "raiding" the pension funds at IPO stages - those are the only ones that small people still have money into.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Insightful) by The Mighty Buzzard on Wednesday November 13 2019, @01:37PM (14 children)
Dude, grow the fuck up and quit blaming others for your problems. Someone else having more than you does not mean you do not have enough. Thinking otherwise is the fucking definition of envy.
My rights don't end where your fear begins.
(Score: 3, Informative) by c0lo on Wednesday November 13 2019, @08:53PM (13 children)
Dude, don't waste your straws on me, personally I don't have problems in the financial areas now, I already have enough.
Others don't and I'm dispassionately looking on why is that.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2, Disagree) by The Mighty Buzzard on Wednesday November 13 2019, @11:17PM (12 children)
Then quit your bitching. You know fuck all about poor people and you're not inclined to treat them with even a thousandth of the skepticism you aim at employers. So stop speaking for them until you know what the fuck you're talking about.
My rights don't end where your fear begins.
(Score: 2) by c0lo on Wednesday November 13 2019, @11:51PM (7 children)
Free speech and all that.
Does it irritate you? Though if so, but not my problem to deal with.
[Citation needed]
(I might not know about all the poor people, but I know about enough of them. On this, you'll have to take my word for it. Or not.
But if you make categorical assertions about anything, be prepared to support them with evidence. Good luck)
Does free-speech come with the non-bias string attached to it or what?
What happen with your position "let them speak and refute them", you started to lose your might and get sick of it suddenly?
(I can be soooo boring repeating yourself. Yeah, my problem, I think I can deal with. Carry on.)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by The Mighty Buzzard on Thursday November 14 2019, @12:24AM (6 children)
You're confusing telling someone to stop being stupid with telling them stop being stupid or I'll force you to.
My rights don't end where your fear begins.
(Score: 2) by c0lo on Thursday November 14 2019, @12:43AM (5 children)
Thanks for caring enough about me, really appreciated.
To return the favor: TMB, your reply suggests that you may not be old enough to understand the futility of telling anyone to stop being stupid.
It rarely works in general and it never works when the person telling it shows signs of stupidity himself**
---
** before you ask - yes, that is in part derived from personal experience. Maybe you should try looking at you through the eyes of an outsider to really grok this lesson, your position of "I'm always right" can be a serious impediment to such learning
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by The Mighty Buzzard on Thursday November 14 2019, @12:52AM (4 children)
Rarely is enough. Every little bit of unnecessary stupidity avoided makes the world measurably better.
My rights don't end where your fear begins.
(Score: 2) by c0lo on Thursday November 14 2019, @01:06AM (3 children)
As an exercise, TMB:
* Look in the mirror
* Realize that the person you whose reflection you are seeing is the one over which you have the greatest control.
* Now, apply your advise to yourself too, the world may be better because of it. Or it may make little-to-none difference to the world, in which case you should come to the realization about where your true values stays - which may not be related with an advisor role.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by The Mighty Buzzard on Thursday November 14 2019, @01:31AM (2 children)
I already do that way more than is healthy. Have you tried it yourself?
My rights don't end where your fear begins.
(Score: 2) by c0lo on Thursday November 14 2019, @01:45AM (1 child)
Must admit I skip the mirror step, no longer necessary in my case.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 4, Funny) by The Mighty Buzzard on Thursday November 14 2019, @02:01AM
I had to stop that bit myself. It's hard to stay humble if I don't.
My rights don't end where your fear begins.
(Score: 2) by c0lo on Thursday November 14 2019, @02:13AM (3 children)
On a not grinning line.
First, show me were I specifically blamed employers.
Second, I'm absolutely ok with the 'You have to give a go to get a go, and giving a go does not always guarantee getting a go in return" This applied on all sides involved in giving or getting go-s.
The problem starts when no matter how much go someone gives, the chance of getting back a go is small to almost nill. Then something is amiss. And if it happens to enough many not receiving the go in return, you may have enough data to point to at least some causes. It doesn't mean other causes don't exist or aren't important. But also doesn't apriori mean that the causes one see or chose to point to are invalid.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by The Mighty Buzzard on Thursday November 14 2019, @03:06AM (2 children)
You get that's precisely why there are so few with so much, yeah? Because life is hard and people with mad life skills are rare as fuck.
Punching a clock will not get you there. It never has and it never will. Hard work will not get you there. Amazing ideas will not get you there. Ambition will not get you there. Being able to see how to get there will not get you there. It takes a combination of hard work, amazing ideas, ambition, and thoroughly understanding how to get from po to sick bling. Just staying in the middle class takes things a hell of a lot of people simply do not mentally possess. It has nothing to do with anyone trying to keep you down; it's all about you simply not having the ability to do any better.
There's nothing wrong with the above. That's just life being as life should be. Giving lots of people something they value is how you get rich. Giving a small to moderate amount of people something they value is how you get to be generic ownership class. Giving the previous two classes of people something they value is how you get middle class. Giving them what they barely value at all is how you stay a broke motherfucker for your whole life. You get what you put in according to its value not according to how hard it was for you.
My rights don't end where your fear begins.
(Score: 2) by c0lo on Thursday November 14 2019, @04:17AM (1 child)
Agreed. Your listed the necessary but your continuation show that you believe is sufficient.
Disagree.
To keep me down? No, I'm not that paranoid.
To keep many or anyone getting ahead? Yes, apart from the "play fair, may the best win" that's the other solution to the competition game**, an easier one once one gets enough clout.
And it does require sociopathic skills to take this path - "if I can't win on merit, then let's cripple the others that can". Unfortunately, after enough time in the competitive game, this becomes the only solution to stay ahead.
Don't tell me you believe in perpetual exponential growth in a limited world. Once most of the competitors got to the point in which the next competitive advantage can be obtained only at cost higher than the ability to extract profit (and the law of diminishing returns guarantees there is such a level), the fair play gets a boot and the "if winning means stepping on dead bodies, let's do it" sociopathy comes in.
This is one of the reasons why the big corporation of world started to behave the way they do.
Very much like the corruption and bureaucracy in other societal structures, the sociopathy necessary just to stay ahead in late stage capitalism is something that fits with "the fish rots from the head down" - if the CEO or the head of govt get no other option but to behave sociopathic, in a quite short time everybody in the hierarchy will behave the same.
---
** see the Prisoner's Dilemma for a very simplified and limited analogy
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by The Mighty Buzzard on Friday November 15 2019, @01:02AM
That is an issue once you get a significant market share, yes. It shouldn't be but it is once you enter Big Business. Short of that, the corporations really don't give a flying fuck about you because you're costing them less than lawyers and bribes would.
My rights don't end where your fear begins.
(Score: 2) by sjames on Thursday November 14 2019, @07:57PM (9 children)
The problem there is that high barriers to entry prevent effective competition and so prevent the benefits of a market economy.
Pretty much everything Smith had to say about markets assumed that buyer and seller were within an order of magnitude or so in economic power. Of course, he also warned against grants of corporate charters unless there was truly no alternative and even then that the corporations be kept on a tight leash and held strictly to their charters including a public good clause.
It's also noteworthy that competition needs to have more independent players than you can count on one hand if it is to have any hope of delivering on the promise of keeping prices under control and maintaining reasonable service. Transparency of information is also necessary to the process. 30 resellers of two products where they randomly switch which one of the two they slap their name on is not effective competition.
(Score: 2) by The Mighty Buzzard on Friday November 15 2019, @01:07AM (8 children)
A) Waah! I don't want to have to earn my way or sell the idea to investors!
B) Only if you're an idiot. I've started more than one business with pretty much nothing I didn't already have at my house.
Now that we agree on. You need competitors or there is no competition. Without competition, you might as well be communists. That's not saying communism is a good thing, it's saying lack of competition is that harmful to capitalism.
My rights don't end where your fear begins.
(Score: 2) by sjames on Friday November 15 2019, @04:56AM (7 children)
I think you mis-understand my first point. There are many markets, some have fairly low barriers to entry, others have high barriers. The markets where the barriers are high will suffer from too little or no competition while people like you and me out of necessity go in to other markets that we can afford to enter.
The ISP is a great example. Back when 33.3K dialup was the best most people could afford, barriers were low and ISPs were legion. I personally knew more than one that started out in their garage. Prices slid downwards for several years while time limits went away. Then technology marched on, but the barriers to entry went WAY up, so many areas have only one or two to choose from. No amount of talking to investors fixes that, they're not interested in that market because the barriers are so high that ROI will not happen in a timeframe they like (if ever).
(Score: 2) by The Mighty Buzzard on Saturday November 16 2019, @07:43AM (6 children)
You think? Hasn't been what I've seen. Mostly I've seen established markets (as opposed to growth markets) causing the lack of available, excited investors. That's always happened and will continue to happen, barring someone seeing a good opportunity to take most of the market share for themselves.
My rights don't end where your fear begins.
(Score: 2) by sjames on Saturday November 16 2019, @07:47AM (5 children)
So you do not, in fact, believe that markets work?
(Score: 2) by The Mighty Buzzard on Saturday November 16 2019, @03:06PM (4 children)
Does not logically follow.
Most all markets eventually hit a point where they no longer offer much in the way of growth, only a steady profit. Investors don't generally like putting huge money into startups for these markets because growth makes them a better return on investment. That's not broken, that's just life. Nobody ever said you should be capable of starting any business you like and nobody ever said someone will invest in any business you start. Conducting whatever legal business you are able to should be an entitlement, conducting any business you want to is bloody stupid to even suggest.
Now a side effect of lightly regulated capitalism is there needs to be someone watching the landscape to make sure some asshole doesn't buy up every competitor so they can turn a competitive market into a monopoly or even just drive the amount of competition down to where it's no longer effective at driving innovation and keeping prices low. You know, some kind of commission to regulate trade, preferably on the federal level. Wait, we have one of those already. I guess what we need are some methods of better holding them accountable then.
My rights don't end where your fear begins.
(Score: 2) by sjames on Saturday November 16 2019, @07:12PM (3 children)
We have markets where there are less competitors than fingers on one hand with high barriers to entry that investors aren't interested in. That either means we will never have enough competitors there to bring market forces to bear unless those barriers are drastically lowered or the government itself enters those markets in some form.
This isn't about my (or anyone else's ) right or entitlement to enter those particular markets, it's about promoting the general welfare.
(Score: 2) by The Mighty Buzzard on Monday November 18 2019, @02:14AM (2 children)
Yes, and the solution to that is roughly the same solution as we used with Bell back in the day. Monopolies, duopolies, and such are extremely bad for capitalism. That's one of the few areas the government legitimately needs to swing its regulatory dick around.
My rights don't end where your fear begins.
(Score: 2) by sjames on Monday November 18 2019, @04:34PM (1 child)
Breaking the link between local and long distance worked out OK, but the rest of the breakup just caused a bunch of name changes while they re-assembled like liquid metal in T2. It also failed to create competition in local phone service
The whole line sharing thing to foster competition in DSL failed miserably when the free market uber alles crowd removed all the teeth from regulators and the baby bells prioritized requests from Covad et. al. slightly below polishing the payphones.
Try counting how many different places you can get various items. You might be surprised how frequently you only need one hand to do it and how infrequently you need to take a shoe off.
(Score: 2) by The Mighty Buzzard on Monday November 18 2019, @08:18PM
Yeah, dyed in the wool capitalists hate what's happened with the phone carriers, especially wireless, more than anybody. That the US government has fallen down massively on its anti-trust responsibilities, that's one bit everyone but the merging companies and the folks they've bribed can agree on. Capitalism requires competition or it dies. Still better than socialism but regulatory capture and abuse of monopoly or monopoly-like powers are definitely not on my Christmas list.
My rights don't end where your fear begins.