Timex
1754
And spending that money? That’s generally being spent in the form of paying for very well paying jobs in the US.
If we harm those companies, we are ultimately just fucking over our own population.
Zuckerberg has already asked for more government regulation. I guess “breaking up” the company may have some advantages (dunno for sure), but wouldn’t it be better to just regulate the Web?
Menzo
1756
Too well paying, at least in the Bay Area, IMO. Tech companies are the main driver for one-bedroom apartments averaging $4k/month here.
A totally different story, and something that local governments should be addressing directly as well.
Bay Area $4k/mo apartments produce 4x the quality of life of $1k/mo apartments elsewhere.
Timex
1758
That’s not because those jobs pay too much.
That’s because there isn’t enough housing.
I’m pretty sure I agree with this, but I’m not sure why it precludes separating out the conglomeration of functions that are the big tech companies today. Splitting up Facebook and Instagram, or Amazon sales and platforms, or Google search and email and cloud services, and so on. The services still exist, just not under monolithic control.
Timex
1760
But why?
I mean, in reality, with the Google stuff at least… Having google’s search tied into all the other stuff they do is actually useful to me, as a consumer.
But even beyond all that… what’s the point of separating them? What does that achieve?
That chart becomes a lot less compelling when you look at it on a share of revenue basis.
… It depends on the industry. To stay a monopoly, the firm needs barriers to entry. In certain industries, spending a bunch on R&D/secret new tech/patents etc. can be a very effective barrier to entry. Nobody can enter your market if they can’t compete technologically, so hide those trade secrets or lock down those patents!
Now, for this type of monopoly, you might ask the following: if society as a whole is getting amazing new technology out of the monopoly’s efforts, maybe that benefit offsets the problems of monopoly (high prices, low output)?
And indeed it might. Which is why the concept of patents was created in the first place - the lawmakers’ bet is that the long-term benefits of encouraging R&D created by temporary patents outweigh the costs of the temporary monopoly also created by patents. (Standard disclaimer: this is talking about how patents are supposed to work, not how they actually work.)
There are several different types of monopolies, and some types might not spend much on R&D. In some industries - the classic example being old school utilities - the barrier to entry is caused by a very large efficient scale. For example, it doesn’t make sense to build a dam that supplies water to only a couple dozen houses, because larger dams are more cost-effective per gallon.
In those industries you end up with only one firm based on the cost structure … and that kind of monopoly may not spend much if anything on R&D.
Timex
1763
This isn’t a remotely valid statement.
Spending money on R&D is not, in any way, monopolistic.
You spend money on R&D in order to improve your product. You are suggesting that it’s somehow unfair for one company to have a better product.
You don’t need to spend a mountain of money to compete. You just need to have better ideas. R&D is just a process by which we develop those ideas. You could create a better search algorithm than Google, using no money at all. Google didn’t invent their original search algorithm with mountains of money.
Most employees wouldn’t do this gratis, and pay the company’s rent too.
Splitting up the services reduces the giant-with-fingers-in-every-pie effect. Amazon’s platform isn’t tailored to Amazon product sales. Google’s search ad targeting doesn’t benefit from data gathered by Android. Facebook doesn’t dominate both old-people media (FB) and young-people media (Instagram). Makes it easier for anyone who does want to start their own version of those services to make a go of it…they’re competing on the service, not against an entire ecosystem. And of course this isn’t a one-time thing…when the next Instagram shows up, you don’t let FB buy them.
Timex
1766
Sure, if you don’t have any good ideas, then you can pay scientists and engineers to come up with them.
But you don’t have to. If YOU have a good idea, then you can implement it.
If Google’s current search algorithm is an AI model trained on their enormous corpus of search data, it might not matter if my core model is better (when fully trained), if I’m never going to get enough data to train it in the first place.
The point being that real world software isn’t some kind of magical meritocracy where the best idea wins (as you well know, based on my understanding of your work).
JoshL
1768
Yeah, I have to correct one misconception here, which is that you can write a search engine with no resources. Indexing the internet is incredibly expensive, you need tons of computer power, electricity, air conditioning, etc. That’s why Yahoo got out of the business.
Plus the way you finance all that expense is by selling ads. But in order to sell ads, you need a critical network of viewers and advertisers, and it costs a lot of money to build that up.
Internet search is a nearly impossible business to break into. Microsoft has been trying to break Google’s stranglehold for years, and have spent billions doing it.
Timex
1770
It is more so than pretty much any industry ever, because it doesn’t rely on physical manufacturing infrastructure.
When Google started out, there were other search engines… All by companies bigger than Google. Google revolutionized search by simply doing it way better.
Microsoft was the biggest company in the world, when Google was literally just two guys in college. The same goes for Facebook.
These giant tech companies arose from nothing, in recent history.
And they did it in the presence of other huge companies.
If you think they are the last new companies to rise up in technology? You are way wrong. I guarantee it.
Sorry, I’m gonna call bullshit on this.
Why isn’t possible now?
Hell, it’s MORE possible now, because of the easy access to underlying infrastructure technology now, so you don’t have to go out and buy a giant warehouse of servers. You can rent that computing power from the very tech companies you guys are saying are so evil.
I know this, because i do it.
Dude, computing resources aren’t where ideas come from. Innovation isn’t like digging a hole.
Suppose you invent a brand-new, never-before-dreamed-of drug. Suppose also (for the simplicity of argument) that you keep the process for creating the drug a trade secret instead of patenting it. For the time being, you’re the only one who knows how to make the new drug, and you’re the only one who sells it. So you are a monopoly, by definition. “Monopoly” means “single seller.” It doesn’t mean “Everything I do is pure eeeeeeevil, bwhahahaha!”
Furthermore, if you’re a business motivated by profit, the whole reason you invented the drug in the first place is because you wanted to be a monopoly - i.e. you wanted to have a new product no one else could imitate right away. Businesses invest in R&D because they want to discover an edge over their competitors that can’t be instantly copied. Once they get that edge, they’ll do what they can to keep it.
None of that is inherently evil. Indeed inventing new technologies can be great for society as a whole, if they eventually become accessible to all rather than being stored in a deep dark vault by the monopolist (or protected by an iron wall of lawyers.) The thing that’s bad about monopolies, at least to economists teaching intro econ classes, is that monopolists jack up the price to the consumer for reasons unrelated to cost. That creates an economic inefficiency.
(Though the actual, moral evil of monopoly, to drag this back on topic, comes not from the economic inefficiency we all learned about in Econ 101, which is fairly minor in the great grand scheme of things. Instead it comes from the fact that monopoly concentrates power, power corrupts, and absolute power corrupts absolutely. The biggest problem with Facebook et. al. isn’t that they charge slightly too much, it’s that they’ve become evil shitheels who use their wealth to treat the rest of the world as their own plaything.)
Timex
1772
At this point you are coming to define monopolies as something which isn’t harmful at all.
The patent system is fundamentally based on these short term, extremely narrow, patents.
But owning a patent is not bad. It’s not a violation of anti trust law.
Yes, competition improves efficiency.
Anti trust laws are not based on preventing a company from being a clear leader in a field. Anti trust laws are based on preventing a company from enacting anti competitive processes.
Suggesting that spending money on R&D is anti competitive, is absurd… because spending money on R&D is in fact the mechanism by which technology companies compete.
You can’t define the competition itself to be anti competitive.
JoshL
1774
That’s not even close to what I said, buy hey, you be you.
Not in recent history as far as Google’s market is concerned. Internet advertising as an industry basically didn’t exist then, economically speaking
It’s a pretty core concept of antitrust law that doing something that would not be anti-competitive for an ordinary company is anti-competitive for a company with a dominant market position. It’s certainly true that simply spending money on R&D would not ordinarily be one of those things, but it’s also true that being in a position to spend vast amounts on R&D because of your dominant market position shores up said dominant position and facilitates other abuses (such as those the EU is currently sanctioning), which is the basis for a break-up argument (an antitrust one anyway).
