Comment by AnthonyMouse
4 days ago
The US is stuck in this weird irony where they recognize that Soviet-style central planning is a disaster but can't recognize that it's what megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.
In general productive economic activity generates a surplus and that surplus allows for slack. Human beings intuitively understand this. Hobbies are frequently de facto training for things that aren't currently happening but might later. Family-owned and operated businesses are much less likely to try to outsource their core competency for the sake of quarterly profits.
But regulatory capture and market consolidation causes the surplus to go to the corporate bureaucracies capturing the regulators instead of human beings with self-determination and goals other than number go up, and then the system optimizes for capturing the government rather than satisfying the people. "When you legislate buying and selling the first things to be bought and sold are the legislators." You throw away the competitive market and subject yourselves to the unaccountable bureaucracy, and then try to pretend it's not the same thing because this time the central planners are wearing business suits.
I wonder if it would work if top US companies implemented a system like the NFL draft, where companies competing for top engineers out of college get to pick from the best engineers inversely proportionally based on how they did before financially.
While it sounds counter intuitive, it maintains a good distribution of talent across the industry.
But that system would only work if healthy competition was the goal, not moneymaking.
The thing that sustains these companies isn't having the best engineers.
Suppose someone new made a better mobile OS than Android. What would happen?
Google has convinced a lot of third party apps to use their anti-competitive attestation system that has no real security value but makes it so those apps won't run on a competing operating system even if it implements all of the same APIs, so it immediately has a major barrier to gaining traction. That should be an antitrust violation.
Then the incumbents would copy any innovative features the new OS has so it no longer has an advantage. On paper this is what the patent system is supposed to prevent, but in practice is does the opposite. If you as a practicing entity tried to sue a major incumbent for patent infringement, they would counter-sue and have an arsenal of thousands of patents that could keep you bogged down in litigation for years. Just the cost of litigation could bankrupt a smaller company even if they won, and there is enough ambiguity in the system that they're pretty likely to lose when the incumbent only has to find one patent out of thousands they were unintentionally infringing, or a court is willing to enforce one that ought not to have been granted. So then everyone has to file a bunch of patents for the purposes of mutually-assured destruction and can't really enforce them, which favors larger companies that can afford the overhead. It certainly doesn't protect the little guy and we would be better off without them.
Your suggestion is also essentially unworkable. NFL teams all have the same number of players and play the same game. Amazon and TSMC each have a very different business and largely aren't competing for the same people. Does Garmin get the same number of picks as Foxconn even though they don't employ nearly as many people? How many picks does a startup get? Do we count Apple as doing poorly because the gross margins on hardware are lower than they are on pure licensing, or Nvidia as doing poorly because they have higher margins but lower revenue? How are we accounting for engineers in other countries? What about engineers in China who work for companies in China who are contractors for international companies? What if a corporate contractor has more than one corporate customer? How do we account for open source? How do we distinguish engineers from IT staff or research mathematicians or prevent companies from giving willing workers a job description that doesn't match the work they're doing?
It's also probably worth pointing out that systems like that are essentially price fixing schemes by the industry to pay workers less than they would otherwise be able to get if other companies weren't prohibited from outbidding them for talent.
Yes - ultimately it's the same system. Far from being daring and innovatory, it's backward-looking, unimaginative, and bureaucratic.
Vision for the future is limited to grandiose fantasies straight out of 1950s pulps and the "heroic" creation of narcissistic corporations that are cynically extractive and treat employees and customers with equal contempt.
The differences which used to provide a convincing cover story - no single Great Leader, a functional consumer economy, votes that appear to make a difference - are being dismantled now.
What's left are the same mechanisms of total monitoring (updated with modern tech) and reality-denying totalitarian oppression, run for the exclusive benefit of a tiny oligarchy which self-selects the very worst people in the system.
> megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.
You just described Lucent.
That's the end stage. The bigger problem is the companies rotting from the inside even though they're still alive, because they use their resources to suppress your alternatives to them while they're slowly dying on top of you.
Yes, many Americans and other Westerners believe that the so-called "socialist" economies, like those of the Soviet Union and of Eastern Europe were non-capitalist.
This is only an illusion created by the fact that the communists were careful to rename all important things, to fool the weaker minds that the renamed things are something else than what they really are.
In reality, the "socialist" economies were more capitalist than the capitalist economies of USA and Western Europe. They behaved exactly like the final stage of capitalism, where monopolies control every market and there is no longer any competition.
Unfortunately, after a huge sequence of mergers and acquisitions started in the late nineties of the last century, the economies of USA and of the EU states resemble more and more every year the former socialist economies, instead of resembling the US and W. European economies of a few decades ago.
Everyone wants to tag the evil with their opposition's name. The evil is concentration of power. But no one wants to call it that because then they can't pretend that it's something different when they're doing it themselves.
Witness the people who keep proposing to solve market consolidation with higher taxes. Higher taxes go to the government, and therefore the interests that have captured the government. Are we going to solve it by taking money from Warren Buffet and giving it to Larry Ellison? Do we benefit from increased funding for Palantir? No, you have to break up the consolidated markets through some combination of antitrust enforcement and peeling back the regulatory capture that prevents new competitors from entering the market.
> Higher taxes go to the government, and therefore the interests that have captured the government.
There is at least a chance for it to be redistributed, unlike private wealth.
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I'd argue we need both massive antitrust, and higher taxes on the wealthy to prevent them from amassing the power to prevent the antitrust.
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wow!! straight to the dome.
thought about this too - but not as expressively as you put it.
e.g in China - for early stage ventures - there's cut throat competition - then as Thiel would put it with heavy competition profits trend towards 0 - by then the tech is perfected or close to perfect - then the state uses its funds to back a monopoly. that's how you get a BYD.
And to complete the reversal what is now referred to as the "golden age of capitalism" i.e the post WW2 USA was actually very socialist. Strong social movement and unions and social spending that created a wealth working/middle class with a bunch of spending power.
Inequality society producea inequal economy (and vice versa) which is the economy of any developing country. Few rich,. miniscule middle class and lots of poor people in slums snd poverty.