Comment by Animats
21 days ago
"I bemoaned that humanity seems to be serving technology rather than the other way around. I argued that tech corporations have become too powerful and their power must be curtailed."
That's a generic problem with corporatism and monopoly, not "tech".
It shows up in "tech" because "tech" scales so well and has such strong network effects. But the US's tolerance of monopoly is the real cause. There need to be about four major players before markets push prices down. The US has three big banks, two big drugstore chains, etc.
Tough antitrust enforcement would help. Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.
Tough labor law enforcement would help. No more "gig worker" jobs that are exempt from labor law. No more "wage shaving". No more unpaid overtime. Prorate medical insurance payments based on hours, so companies that won't pay people for more than 30 hours a week pay their fraction of medical insurance. A minimum wage high enough that people making it don't need food stamps.
> Prorate medical insurance payments based on hours, so companies that won't pay people for more than 30 hours a week pay their fraction of medical insurance
Attaching medical insurance to one's job is a market distortion caused by government tax policy. I.e. it enables one to buy insurance with pre-tax dollars rather than after-tax dollars. Making medical insurance premiums fully tax-deductible would fix that.
> A minimum wage high enough that people making it don't need food stamps.
That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.
> Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.
Google is already in trouble because AI is disrupting their search/advertisement business model.
I'd be careful about destroying big business. The US is only part of the world. Destroying US big business means other countries will have those companies, and it's lose lose for the US. Do you want Big Tech to be American companies, or foreign companies?
> Attaching medical insurance to one's job is a market distortion caused by government tax policy
Here in the US, FDR had a wage freeze as part of his policies [1] to deal with the continuing Great Depression that WWII had not stopped yet by 1942. Because of that, companies needed to get inventive about ways to increase benefits but not illegally increase wages. Companies started offering insurance plans.
That's where the employment/insurance coupling started.
1. https://en.wikipedia.org/wiki/Stabilization_Act_of_1942
That's correct.
It’s not that simple. Pretax premiums could be wiped out with the stroke of a pen.
I worked at an entity with 300+ thousand employees and Probably another 200k retirees… I was able to pay full cost to retain my health insurance from them.
The benefits and out of pocket costs are incredible - my current CEO asked me why I do that rather that use the company insurance and I walked through it with him. It’s not possible to buy that coverage, between the legacy insurance plan and huge risk pool, only the largest entities can have the best insurance.
The “simple answer” is pretty easy. Put a 10% payroll tax with a $5M income cap, and build out Medicare with whatever benefits are doable under that cost structure. Let the market compete for extended benefits, which would work like a traditional insurance market.
The doctors and medical industries would be happy. People would gain newfound job mobility and freedom. Most people would save money vs the payments they make today. Rich people would be sad because taxes.
> People would gain newfound job mobility and freedom
Something tells me the people in charge most definitely do not want this at all…
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> only the largest entities can have the best insurance
Exactly. The bigger the better.
I'm still baffled why local and state govts aren't easing into a public option.
Ditto the largest (self-insured) employers. It'd be so easy to extend benefits to their partners, local supporting businesses (eg daycares), and so forth.
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> Attaching medical insurance to one's job is a market distortion caused by government tax policy. I.e. it enables one to buy insurance with pre-tax dollars rather than after-tax dollars.
Also the ACA Employer Mandate[1]. Get rid of that and maybe figure out some sort of "nutrition label" style thing to make it easier to compare offers that are more cash vs more benefits.
[1] https://www.irs.gov/affordable-care-act/employers/employer-s...
First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.
But let's put that aside. What we have now isn't amarket distortion caused by using pre-tax dollars for employer insurance. It's that an employer can collectively bargain for insurance in a way that an individual never can.
If you have 100,000 people in a group then statistical norms come into play of how often you'll need to do a transplant or [insert expensive procedure here]. Plus you have the negotiating power to get better coverage at a lower price than an individual ever can.
So individual insurance can never work regardless of tax policy. Tying insurance to employment is bad for pretty obvious reasons. And this is how we return to "private insurance shouldn't exist".
>First, private insurance shouldn't exist at all. It is rent-seeking of the highest order. There's no need for it. The US is the only country that works this way.
Some other countries have private insurance as an option. For example, you can buy private insurance in the UK and some provinces of Canada if you want. Some people obviously feel it is worth it to them to do so (faster time to treatment, private versus shared hospital rooms, etc.). The difference from the US system is that there is a public system available without this expense.
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> That just makes those people unemployable, and will need food stamps even more.
This doesn't actually bear out. Minimum wage increases really don't have a history of making minimum wage employees unemployable, or destroying the companies affected. In fact, the opposite tends to happen, as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.
> Do you want Big Tech to be American companies, or foreign companies?
I'd argue that you can't just airdrop these companies into another country and have them be as successful as they are. Even with much stricter monopoly laws, there is a LOT about America that incentivizes these companies to locate there, and frankly I'm not convinced they'd move.
And as a Canadian, I don't even want Big Tech to be American. =) The US is only part of the world, as you said, but your lax and corrupt legal system is polluting the world with these dangerous megacorps.
Don't get me wrong, we're none better, our system would allow for nearly the same abuse, were it not for the fact that our whole country is smaller in population that California. But the point remains that there's a lot of the world that is looking on in horror at these rampaging monster companies and is not in any way assured by the "at least they're American" defense.
> This doesn't actually bear out. Minimum wage increases really don't have a history of making minimum wage employees unemployable, or destroying the companies affected. In fact, the opposite tends to happen, as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.
It's not nearly that settled
https://www.youtube.com/watch?v=Wvr0NhYfkO4
https://www.youtube.com/watch?v=8H4yp8Fbi-Y
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>as these businesses tend to be frequented by other minimum wage employees as customers, so it ends up being a rising tide that lifts all boats.
Then why not just make minimum wage $100/hour?
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>That just makes those people unemployable
Or, put differently, it makes the profits of the companies who hire them unsustainable. IMO allowing an non-livable wage in order to subsidize profits isn't a great policy.
When the company has an unprofitable business model, it goes out of business.
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Americans will consider anything other than a proper public health system. Like a hare-brained scheme of pro rating insurance premiums to hours worked, whatever the fuck that means. Or making insurance premiums tax deductible. Just utter stupidity at every turn.
The majority of Americans would favor a public health system[1]. The difficulty is transitioning from what we have now to one. We aren't starting from a blank slate.
[1] https://www.pewresearch.org/short-reads/2020/09/29/increasin...
> Making medical insurance premiums fully tax-deductible would fix that.
They more or less are, for those who pay for their own health insurance.
Why would have the same rule for those who receive health insurance as part of an overall W2/labor-based compensation contract?
No, the insurance premiums aren't tax deductible.
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> That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.
Good, a job that cannot support biological needs should not exist. It’s not a viable business.
Why should I pay a stealth subsidy to whatever business it is.
> Do you want Big Tech to be American companies, or foreign companies?
This excuse was used to start wars, trample civil rights and employment rights. It basically means we must become like China to beat China. What would be the point?
> Good, a job that cannot support biological needs should not exist.
There was a time in the not so distant past, that close to 100% of those "Minimum Wage" jobs were held by teenagers and youths with close to zero market value as employees, who needed their first few jobs to develop the skills, knowledge, resume and references so they could get an actual job.
Places like McDonalds and Summer Resorts and Amusement parks - were great places for youth to learn these skills. The real distortion is when you started having adults working in McDonalds. It was never a job to support a family - it was a minimum-wage job for kids to get started.
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> Good
It's not better to have people have no jobs and require 100% assistance.
> subsidy
Regardless of how you define terms, you'll being paying much more to help them when they are jobless.
> become like China
China has a largely state run economy, with the resulting problems.
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>>Good, a job that cannot support biological needs should not exist. It’s not a viable business.
>>Why should I pay a stealth subsidy to whatever business it is.
I think a lot of the argument around minimum wage is a disagreement (or misunderstanding?) about minimum wage workers.
Let's say you have a $10/hr minimum wage, and some company BigCo hires people and pays them $10/hr. Now, the disagreement: is BigCo actually getting $10/hr of value out of those workers? Or is it $20/hr, or $50/hr, or $5/hr, or $2/hr? Because I think that's a critical question both in terms of "should we subsidize those workers/BigCo" and "should we raise the minimum wage".
Some people do not currently, and may never, have skills that are worth $25/hr in terms of value produced in our economy. I think we need to make sure those people still have an acceptable standard of living, but I don't think setting the minimum wage to $25/hr is likely to do that.
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>Good, a job that cannot support biological needs should not exist. It’s not a viable business.
And "biological needs" are an ever-increasing target, just beyond minimum wage. When minimum wage increases so does the target. Why? Because it's not about biological needs. It's about relative wealth dressed up as "basic needs".
I do think the US should have a minimum wage increase, but the discussion around it seems so disingenuous.
Is there some evidence that big american companies are less negative than big [insert adversary of the decade] are?
Companies are not bound by morals, national identity, or any interest other than self-perpetuation. They are a virus that we harness to do good. When the virus overwhelms its host, its time for medicine.
>Do you want Big Tech to be American companies, or foreign companies?
So true - imagine an iPhone made in China - the horror.
> Making medical insurance premiums fully tax-deductible would fix that.
...or alternatively, removing deductions for medical insurance.
> That just makes those people unemployable, and will need food stamps even more. Nobody is going to hire people who cost more than the value they produce.
You're subsidizing those wages with your tax dollars. You're paying billions per year to make those low incomes livable. In the end it's just corporate welfare:
https://www.forbes.com/sites/clareoconnor/2014/04/15/report-...
https://www.cnbc.com/2020/11/19/walmart-and-mcdonalds-among-...
https://laborcenter.berkeley.edu/a-downward-push-the-impact-...
It's not the case that they wouldn't employ people. They're not employing people now out of the goodness of their heart.
If they paid living wages (as they should) you'd pay less. Good businesses pay their costs.
But as it is, the likes of Walmart and McDonald's are privatizing their profits and socializing their costs.
> You're subsidizing those wages with your tax dollars.
Under your proposal I'd be paying even more tax dollars to those rendered unemployable.
> It's not the case that they wouldn't employ people.
People who produce less value than they cost become unemployed.
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I think an under-discussed issue is how companies are allowed to own sub-companies that don't need to necessarily disclose they're owned by a larger conglomerate. Like I don't know how you necessarily solve this, but I think if people, for example, knew the sheer number of snack brands owned by Nabisco, there would be a lot more discussion about corporate consolidation and monopolies.
> sheer number of snack brands owned by Nabisco
Also Yum and Roark, which, together, own much of fast food.
> That's a generic problem with corporatism and monopoly, not "tech".
There is a general problem with corporatism and monopoly, but there are also specific problems with "tech". Oil & gas monopolies don't broadly carry everyone's private interactions. Sports monopolies generally can't expose political dissidents.
>Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.
I admire the general spirit of your comment, but this specific example seems off to me. Search and browsers, for example, don't make sense as independent businesses. Rather, they are products based off of Ads.
Maybe the idea would be for Ads to pay Search to include their ads, and for Search to pay Browsers to be the default search engine?
Apple should also be broken up into hardware/os, app store, services, payments, media
Your car shouldn't decide who you can do business with nor should it get a fee from every store you drive to. It shouldn't push it's own payment system for all purchases. And neither should a pocket computer do these things
Antitrust enforcement is so hit-or-miss, contingent upon risky prosecution in court and a DOJ willing to undertake it, and with no ability to scale. It has made me wonder whether a statutory approach may be better, where companies past a certain [relative] size threshold would need to split up. Then it would be no surprise to shareholders and consumers wouldn’t need to be harmed for years before maybe regulators would dare step in. I think it would do a lot for the US competitively, too, to ensure the market remains dynamic. Sustained vigorous competition seems likelier to serve us better in the long run than boosterism of our largest companies.
> corporatism and monopoly, not "tech"
Yes and: Corporatocracy
> strong network effects
Yes and: aka Preferential attachment leading to winner-takes-all.
It's just math. Not some kind of weird moralistic blather.
The tendency towards concentration necessitates some counter balance, backpressure, redistribution, whatever.
> need to be about four major players before markets push prices down.
Yes and: I believe, but cannot prove, unifying markets (nationalization, globalization) accelerated monopolization.
Alas, I don't have any ideas on how to put the toothpaste back into the tube. Clearly, we're not reverting to regionalism or localism any time soon. Economically or politically.
> "I bemoaned that humanity seems to be serving technology rather than the other > way around. I argued that tech corporations have become too powerful and their > power must be curtailed." > That's a generic problem with corporatism and monopoly, not "tech".
If you wound enjoy a deep and rigorous treatment of this subject, I strongly recommend Martin Heidegger's "The Question Concerning Technology."
He argues that modern technology is fundamentally different from historical technology, and that corporatism and monopoly are the inevitable result of technology.
The US cellular market has T-Mobile, Verizon, AT&T and a bunch of mvnos. Dish is starting out and a few years back we had Sprint before it merged with TMobile.
I wouldn’t say the competitiveness changed all that much and I would say it’s more competitive than Canada with also 3 and less competitive than France with 4. However the competitiveness in France now is specifically because a low cost provider Free entered and started stealing all the costumers rather than because of the number of competitors.
I disagree. It's a problem with tech because even if regulations exist, new tech moves much faster than regulation. And technology is too seductive to be used properly so people indeed end up serving tech just as drug addicts live for their habit. Many more details are explained in "The Metaphysics of Technology" by David Skrbina or "The Technological Society" by Jacques Ellul.
Technology has a tendency to overwhelm and transform everything for the sake of technology.
It is an even more generic problem than that since it also applies to bureaucracy and by extension the government.
While I agree with you on the basic issue of monopolies, I think the biggest monopoly problem is the U.S. government. It's so massive that it absolutely dwarfs all other monopolies, like Google.
I would therefore like a solution that does not, in any way whatsoever, increase the power of the US government.
Empires tend to have defining characteristics that are both the reason they become empires in the first place and ultimately what is their undoing.
The British Empire was the drug dealer empire (first tobacco then opium).
The US is the arms dealer empire, at least since WWI.
The point here is that I believe that any sufficiently large company in the US eventually becomes a defense contractor and thus aligns itself with US foreign policy [1].
So we have Amazon selling cloud services to the CIA, Google selling cloud services to the military and Israel, Meta cooperating with military uses of AI and so on.
[1]: https://newrepublic.com/article/153044/big-techs-unholy-alli...
> The US has three big banks
? I thought we still had the big four? Chase, BoA, Citi, WF? And if you're talking about just consumer banking, US Bank is only ~30% behind #4 (Citi).
Wells Fargo, maybe.[1]
And we need Glass-Stegall back. Banks and brokerages should be separate. There is no good reason that Goldman Sachs should be a bank, other than for bailouts, which is why they became a bank.
[1] https://www.macrotrends.net/stocks/charts/WFC/wells-fargo/to...
Can you explain why you think that commercial and investment banks should be separate? To be clear: Amoung highly developed nations, this is universally allowed now -- all of them allow commercial and investment banks within the same company.
Also, Goldman became a nationally regulated bank to get access to the Federal Reserve window. So did Morgan Stanley.
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The Treasury Department’s capital “stress tests” seem to have been a good thing, though?
The US also has a relatively huge amount of small banks that are specialized in financing niches. It’s actually a huge competitive advantage. If I want a bank that specializes in loans for PNW fishing boats, that exists, and they are able to competitively price a loan that BoA won’t even consider.
The flip side is that big banks are great at driving down costs for standard operations (when there are enough of them to be competitive). If all I need is a business checking account as a consultant, I can access that for no cost via one of the giants.
> If I want a bank that specializes in loans for PNW fishing boats, that exists, and they are able to competitively price a loan that BoA won’t even consider.
What's the specialty here, risk assessment?
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> There need to be about four major players before markets push prices dow
Not at all sure that prices are the problem here, nor that markets can solve the actual problems.
This is a Gish Gallop of completely unrelated things.
Tech companies can become very powerful without holding a monopoly. All it takes is being big enough to have political sway either through being a big employer or just by straight up lobbying.
The US has a few big banks and then hundreds of regional banks. It’s trivial to bank without using the big ones.
Prohibiting a post breakup Google from contracting with each other is completely idiotic. Either they make sense as standalone businesses or they don’t. Why wouldn’t Google search be allowed to use GCP but be allows to use AWS? If they are different companies they will use what is best for the company and regulating that they use something worse is bad for everyone.
Min wage unrelated
Gig job unrelated
Medical insurance unrelated
The hyperfocus on shareholder returns is also worth mentioning. It's tangentially related to a monopolistic trajectory. Instead of a company being really good at solving problems in a particular domain they attempt to serve many mediocre solutions in a variety of domains. Shareholders, VCs, and the like encourage this lack of focus on quality and replace it with a focus on margins. The solution for low margins is lower head count and greater diversification of SKUs. For many companies, it's a recipe for enshittification and spirals into mediocrity. Not to mention, when a company enters this phase the lives of employees begin to suffer greatly.
What's that got to do with corporatism?
> Google should be broken up into Search, Browsers, Mobile Devices, Ads, and Services, and the units prohibited from contracting with each other.
Why Google? Every single day there are articles here on HN with many comments explaining that Google is done due to LLMs replacing search.
Google market cap: $2.3 bn
Microsoft market cap: $3.2 bn
Break up Microsoft. And for good this time.
You mean trillions, not billions
Monopolies in US? Which bad product you are forced to buy because there's no competition at all?
Having monopolies is not a symptom of government negligence. It's the system working as intended.