1/ Thoughts on Godhart's Law, Ergodicity, Regulation, Internet Aggregators and Blockchain
2/ I just finished re-reading Tim Wu's excellent history of 20th century media, The Master Switch.
3/ In it, Wu explains how companies like AT&T and RCA were able to use governement regulation and vertical integration to dominate their respective industries for decades at a time.
4/ Today's internet aggregators (Google, Facebook, Amazon, etc.) achieved dominance through a virtuous cycle of superior UX and network effects.
5/ Better UX drove more users which increased the network effect, making it easier to improve the UX which brought in more users ina virtous cycle. @Stratechery dubbed this Aggregation Theory: stratechery.com/2015/aggregati…
6/ This has made it hard to regulate the internet aggregators with traditional anti-trust legislation. Facebook and Google are free for their users and Amazon is cheaper than anywhere else so it's hard to argue they are hurting consumers.
7/ This is a clear application of Goodhart’s law: when a measure becomes a target, it ceases to be a good measure.
8/ Consumer prices became the target for anti-trust legislation and so it ceased to become a good measure.
9/ This is one of many examples of markets being self-adaptive.
10/ @GabeBassin has made a very compelling case to me that inflation isn't low, it's just being expressed in asset prices rather than consumer prices
11/ My intuition is that these new monopolies are better dealt with using new solutions, like new data standards.
