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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: 4, Insightful) by Bot on Tuesday November 12 2019, @12:29PM (3 children)
There is no way free market does not degenerate in plutocracy. There is no way communism does not degenerate in party aristocracy and totalitarianism.
The solution? it is proposed as social democracy, but that is what the incumbent guys who are likely behind all of this degeneration propose. So I guess the problem is deeper and the solution goes beyond politics. Economy is a good starting point.
Account abandoned.
(Score: 5, Interesting) by Immerman on Tuesday November 12 2019, @03:46PM (2 children)
>There is no way free market does not degenerate in plutocracy.
Sure there is, but you have to *enforce* a free market - such a things can't exist on its own. And to do that you have to enforce the noninterference of the capitalists in government, which they'll otherwise inevitably twist to bolster their profits at the expense of the free market. That second bit is where we haven't had much luck yet.
> There is no way communism does not degenerate in party aristocracy and totalitarianism.
That does seem kind of likely, but that's a *really* strong statement considering that Communism has never existed at a large scale in order to degenerate in the first place. Plenty of groups have flown the banner, but ask yourself one question: are the government leaders living substantially the same material lifestyle as farmers and janitors? If not, then you haven't gotten anywhere close to communism yet. Meanwhile, small scale communism at the scale of communes and monestaries seems to work passably well.
It seems to me you have the same problem in either case - any time you concentrate power, the people holding that power are almost inevitably going to be corrupted (or be replaced by those who are already corrupted), at which point they're going to twist the rules to create an autocracy that benefits themselves at the expense of everyone else.
Democracy seems to be the only potential solution - keeping power in the hands of the masses rather than those of the would-be autocrats. Unfortunately we haven't figured out how to make it work very well yet. Representation seems to be essential, because most people don't have the time, knowledge, or incentive to make good judgments to do their some fraction of a millionth part of wielding government power. But when we give power to representatives, they seem to immediately set out to abuse that power for their own benefit as much as possible before we have the option to vote them out again - and then be on their best behavior in the lead up to the next election so that we'll forget their past abuse and make the same mistake again.
I've been working on an idea that might help, by never giving representatives a firm grasp on power. I call it optionally direct democracy: Every citizen can, if they choose, vote on every bill and other legislative action. But they also need to pick a Representative that their vote will automatically follow if they don't cast it themselves (i.e. the normal situation for most people most of the time). Importantly they don't vote for their Representative - there are no elections. Instead after any scandal, or when some new, more promising candidate rears their head, you can immediately say "My current representative sucks, I'm going to follow this other, better one instead". Representatives aren't casting votes on your behalf, they're just casting votes that your vote will automatically follow - unless you vote directly because you don't like their stance on something.
Right out of the gate that means that nobody ever "wastes" their vote by voting for a losing candidate. If there's a three-way 55:30:15% split in the candidates supported by a certain population, then those candidates will respectively wield 55%, 35%, and 15% of that population's legislative power. And if someone wants to select their wise old granny as their representative instead of some politician - that's fine too. We don't really need formally recognized representatives in such a system, though some sort of paid council of the N most popular candidates who can work full-time on governing is probably a good idea - they can cultivate the support of the minor representatives as they see fit.
It also means that Representatives will have a much harder time cramming through legislation in the face of widespread public opposition - the people always have the option of voting directly instead, the only power a Representative is guaranteed to be able to wield is that of their own solitary vote - no more powerful than any other citizens.
As an added bonus I think it would deal a severe blow to party politics, as well as discouraging corruption. No more "Vote for me or The Enemy will win" - I'll give you my vote until I find someone else that better represents my specific values. And that someone else will probably be another member of the same party, with similar positions on most things, just a bit more in line with my own values, or perhaps a bit more effective at getting things done.
Really, you could probably even do away with the ability for citizens to vote directly and still get most of the benefits - Representative A starts advocating hard for unpopular "Policy X", and people can switch their vote to Representative B, who's otherwise similar but opposed to X. After all, we can always switch back later. In order to hold on to power, Representatives would have to continuously reflect the ideals of their base as broadly as possible.
(Score: 2) by mobydisk on Wednesday November 13 2019, @04:24PM (1 child)
First thought: OMG this sounds genius. Has anyone else written about it? This is a frieking great idea. This is very similar to how corporate shareholder elections work. I've read articles comparing Condorcet with ranked-choice with 57 variations, but all are under the concept of electing a single representative. But this sounds like a much better approach. I'm really interested in hearing some discussion about it.
Now as I think... this works for voting, but there are other things a representative does. Where would we hold the debates? What is the process of introducing a bill? Who works with the lawyers and writes bills? And this won't work for offices like presidents and governors have individual powers. There's things to address on how exactly to make this work in practice.
(Score: 2) by Immerman on Thursday November 14 2019, @01:27AM
Thank you. I've never heard of anything like it, and am rather proud of it. I'm working on assembling a concise and evocative introduction as well as a more detailed "manifesto" in the hopes of getting it on the front page here to both get more feedback and spread the idea.
For a lot of the non-voting aspects, one simple "traditional" way would be to restrict those to a Council of the N most popular Representatives. You'd need to work out how to change them out, since you probably don't want daily or hourly churn at the cuttoff point. Maybe a periodic "election day", or perhaps something like a Schmitt trigger - e.g. for a Representative to get on the council, they need to take the seat of the least popular councilor by becoming at least T% more popular.
Debates might also be held amongst all Representatives (including your wise granny with her three followers) in some sort of online forum - screening by popularity would be easy, and you could also allow representatives to "mod" or "like" each other's posts to help the the most salient ideas rise top the top.
It admittedly doesn't work well for individual offices, and I see no problem with that - it doesn't have to fix all problems to be really useful. I conceived it as a way to get individuals more engaged with democracy, while making and legislatures, councils, corporate (or school) boards, etc, far more beholden to the people on a day-to-day basis instead of just during election season.
The same infrastructure might work well as an alternative to primaries and elections though. Instead of primaries, let everyone pick their favored Presidential candidate as their pseudo-representative, and let popularities shift and settle out over the course of the election season instead of relying on often biased polls and pundits to figure out which candidates are worth paying attention to. Then the most popular come election day gets the job. Hmm... Or perhaps there is no election day, and the job is treated as a single seat "council", with the incumbent being ousted whenever someone else manages to take their chair.