Comment by nickpp
3 months ago
Multinationals cherish and welcome regulations. They have whole compliance departments for exactly that: obeying regulations.
How’s Australia’s startup scene though? Startups are the hardest hit by regulations.
Fewer startups mean less competition for incumbents. This is how de-facto monopolies appear: through regulating competition out of existence.
Australia's startup scene is doing ok, but the funding model is lacking. There are a few reputable VCs, and very limited government funding. I don't think it's regulations that are cramping Australian startups, I think it's more lack of investment from both private and public sectors. I know many people who are running successful startups in Australia.
I'd argue that having a system of lobbying government and lax rules on political donations would have a much greater effect on stymying competition. It seems that monopolies in the US are very much protected by a lack of regulation on political donations rather than too much regulation.
> I'd argue that having a system of lobbying government and lax rules on political donations would have a much greater effect on stymying competition.
Interesting. My belief is that regulations are the most harmful since they raise barriers to startup competition and thus protect monopolies (since startups, due to their hunger, are the most important source of competition in a market - incumbents usually end up in monopolies and cartels instead). We're seeing that here in the EU every day.
But let's explore your point: how exactly do you think lobbying and donations are stymying competition? What's the mechanism at work?
The mechanism is as old as the hills. You pay for favourable conditions for your business, and unfavourable conditions for your competitors. Australia has a classic history of political figures being given very comfortable jobs in the private sector after they've greased the wheel for their largest donors. This applies to tech, communications, finance, property development and probably every other money making sector.
When contracts are awarded to companies based on lobbying and donations it stymies competition.
The following quote is from the report linked at [1]. It's worth reading the entirety of that report.
"the growing politicisation of public service, exemplified by political appointments to government bodies (Griffiths et al. 2022), may spill over into the contract market. Links between politics, donations, and contracts may negatively impact competition and firm entry".
[1]: https://e61.in/wp-content/uploads/2023/07/Political-Economy-...
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