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Throughout history there are very few monopolies and they don't normally last that long; that is unless they get are granted special privileges by the governmen

Throughout history there are very few monopolies and they don't normally last that long; that is unless they get are granted special privileges by the government.

mondrian 1y ago
Concentration is the default in an unregulated environment. Sure pure monopolies with 100% market control are rare but concentration is rampant. A handful of companies dominating tech, airlines, banks, media.
- fallingknife 1y ago
  Concentration seems much more prevalent in heavily regulated markets e.g. utilities / airlines. In many cases regulators have even encouraged this e.g.finance. There is no default for unregulated markets. It's a question of whether the economies of scale outweigh the added costs from the complexity that scale requires. It costs close to 100x as much to build 100 houses, run 100 restaurants, or operate 100 trucks as it does to do 1. That's why these industries are not very concentrated. Whereas it costs nowhere close to 100x for a software or financial services company to serve 100x thee customers, so software and finance are very concentrated. The effect of regulation is typically to increase concentration because the cost of compliance actually tends to scale very well. So businesses that grow face an decreasing regulatory compliance cost as a percent of revenue.
  - guhcampos 1y ago
    You are comparing Apples and Oranges. You just can't compare the barrier of entry for Software business and an Airline, even without any regulations. It's just orders of magnitude more expensive to buy an airplane than a laptop, and most utilities are natural monopolies so they behave fundamentally different.
    - danielmarkbruce 1y ago
      Most planes are leased. The capex for an airline isn't anything especially high if they don't want it to be.
    - fallingknife 1y ago
      I can't and I didn't. I never said anything about barriers to entry. I'm talking about concentration here and why the market is dominated by airlines with hundreds of planes instead of airlines with 10 planes. Barriers to entry are inevitable in capital intensive industries.
  - mondrian 1y ago
    Home building is interesting because I think a major blocker to monopoly-forming is the vastly heterogenous and complicated regulatory landscape, with building codes varying wildly from place to place. So you get a bunch of locally-specialized builders. Regulation can increase concentration in a high corruption/cronyism environment — regulatory capture and regulatory moats. There is plenty of that happening. In building, I think we have local-concentration, due to both regulatory heterogeneity and then local cronyism - Bob has decades of connections to the city and gets permits easily, whereas Bob’s competitor Steve is stuck in a loop of rejection due to a never ending list of pesky reasons.
- danielmarkbruce 1y ago
  airlines? Worst example ever. There are lots of airlines coming and going. "Tech" isn't even an industry.
- hammock 1y ago
  Concentration is not monopoly, and furthermore your comment does not begin to address the critical part of parent’s comment : “does not last very long” Inequality at a point in time , and over time , is not nearly as bad if the winners keep rotating
phatfish 1y ago
> unless they get are granted special privileges by the government That's what all the lobbyists are for. None of the people or organisations that advocate for "free markets" or competition actually want free markets and competition. It's a smoke screen so they can keep buying politicians to get their special privileges.
deleted 1y ago
[deleted]
cyberax 1y ago
> Throughout history there are very few monopolies and they don't normally last that long That's completely incorrect. Historically, monopolies were pretty long-lived. So much that they were often written into the legal codes. It's only fairly recently that the pace of innovation picked up so much, that monopolies not really die per se, but just become irrelevant.
const_cast 1y ago
They always inevitably end up being given special privileges. Because, contrary to what we would all like to believe, once a company becomes large we don't want them to go under, even if they're not optimal. There's a huge amount of jobs, institutional knowledge, processes, capital, etc in these big monopolies. Like if Boeing just went under today, how long would it take for another company to re-figure out how to make airplanes? I mean, take a look at NASA. We went to the moon, but can we do it again? It would be very difficult. Because so many engineers retired and IP was allowed to just... rot. It's a balancing act. Obviously we want to keep the market as free as possible and yadda yadda invisible hand. But we also have national security to consider, and practicality.

Throughout history there are very few monopolies and they don't normally last that long; that is unless they get are granted special privileges by the government.

mondrian 1y ago

Concentration is the default in an unregulated environment. Sure pure monopolies with 100% market control are rare but concentration is rampant. A handful of companies dominating tech, airlines, banks, media.

fallingknife 1y ago
Concentration seems much more prevalent in heavily regulated markets e.g. utilities / airlines. In many cases regulators have even encouraged this e.g.finance. There is no default for unregulated markets. It's a question of whether the economies of scale outweigh the added costs from the complexity that scale requires. It costs close to 100x as much to build 100 houses, run 100 restaurants, or operate 100 trucks as it does to do 1. That's why these industries are not very concentrated. Whereas it costs nowhere close to 100x for a software or financial services company to serve 100x thee customers, so software and finance are very concentrated. The effect of regulation is typically to increase concentration because the cost of compliance actually tends to scale very well. So businesses that grow face an decreasing regulatory compliance cost as a percent of revenue.
- guhcampos 1y ago
  You are comparing Apples and Oranges. You just can't compare the barrier of entry for Software business and an Airline, even without any regulations. It's just orders of magnitude more expensive to buy an airplane than a laptop, and most utilities are natural monopolies so they behave fundamentally different.
  - danielmarkbruce 1y ago
    Most planes are leased. The capex for an airline isn't anything especially high if they don't want it to be.
  - fallingknife 1y ago
    I can't and I didn't. I never said anything about barriers to entry. I'm talking about concentration here and why the market is dominated by airlines with hundreds of planes instead of airlines with 10 planes. Barriers to entry are inevitable in capital intensive industries.
- mondrian 1y ago
  Home building is interesting because I think a major blocker to monopoly-forming is the vastly heterogenous and complicated regulatory landscape, with building codes varying wildly from place to place. So you get a bunch of locally-specialized builders. Regulation can increase concentration in a high corruption/cronyism environment — regulatory capture and regulatory moats. There is plenty of that happening. In building, I think we have local-concentration, due to both regulatory heterogeneity and then local cronyism - Bob has decades of connections to the city and gets permits easily, whereas Bob’s competitor Steve is stuck in a loop of rejection due to a never ending list of pesky reasons.
danielmarkbruce 1y ago
airlines? Worst example ever. There are lots of airlines coming and going. "Tech" isn't even an industry.
hammock 1y ago
Concentration is not monopoly, and furthermore your comment does not begin to address the critical part of parent’s comment : “does not last very long” Inequality at a point in time , and over time , is not nearly as bad if the winners keep rotating

phatfish 1y ago

> unless they get are granted special privileges by the government That's what all the lobbyists are for. None of the people or organisations that advocate for "free markets" or competition actually want free markets and competition. It's a smoke screen so they can keep buying politicians to get their special privileges.

deleted 1y ago

[deleted]

cyberax 1y ago

> Throughout history there are very few monopolies and they don't normally last that long That's completely incorrect. Historically, monopolies were pretty long-lived. So much that they were often written into the legal codes. It's only fairly recently that the pace of innovation picked up so much, that monopolies not really die per se, but just become irrelevant.

const_cast 1y ago

They always inevitably end up being given special privileges. Because, contrary to what we would all like to believe, once a company becomes large we don't want them to go under, even if they're not optimal. There's a huge amount of jobs, institutional knowledge, processes, capital, etc in these big monopolies. Like if Boeing just went under today, how long would it take for another company to re-figure out how to make airplanes? I mean, take a look at NASA. We went to the moon, but can we do it again? It would be very difficult. Because so many engineers retired and IP was allowed to just... rot. It's a balancing act. Obviously we want to keep the market as free as possible and yadda yadda invisible hand. But we also have national security to consider, and practicality.