[warning: boring thread ahead]
1. Just reading a useful paper by @CompetitionProf on competition among big tech platforms, which he calls 'moligopolistic competition'. Moligopoly as a word is a combination of monopoly and oligopoly. These firms are both. papers.ssrn.com/sol3/papers.cf…
1. Just reading a useful paper by @CompetitionProf on competition among big tech platforms, which he calls 'moligopolistic competition'. Moligopoly as a word is a combination of monopoly and oligopoly. These firms are both. papers.ssrn.com/sol3/papers.cf…
2. His argument is that the economy straddling firms, FB, Google, Amazon, Msft, Apple, are not traditional monopolies. They have a core market with monopolistic positioning, but they also compete across many other markets. And they seek to disrupt their core market.
3. Tech monopolies compete, not always against actual competitors, but against what he calls ‘non-consumption’. This is what Zuckerberg's notes meant about FB not being a monopoly, as consumers have a lot of other things to do with their time (like sleep).
4. These are, in @competionprof’s view, a set of data conglomerates. They aren’t traditional conglomerates, which are financial holding companies, but are conglomerates that disrupt themselves and seek to enter/disrupt other markets due to fear of entrepreneurs doing so.
5. He writes of the tech monopolies, “What seems to drive them is an ambition to discover the next transformative technology, and become the ultimate XXIth century disruptors in the footprints of the Henry Ford, Nikola Tesla and Leonardo da Vinci.”
6. Traditional economics, and even the price system itself, breaks down when examining moligopolistic competition. He cites @tylercowen , Ronald Coase, and Milton Friedman as all expressing skepticism towards the insularity and lack of realism in traditional economics.
7. Moligopolists aren’t just trying to compete to improve existing products, they are trying to disrupt entire industries. Antitrust enforcers need to stop seeing monopolization as a problem, but find new methods of analysis to incorporate innovation and competition inside firms.
8. After all, how can you apply an antitrust competitive lens to the genius of a Leonardo da Vinci?
9. What I took away from the paper is that it is becoming a consensus view that the existing tools for antitrust review do not correspond to reality. Everyone is coming to understand that Facebook just can’t be understood through the consumer welfare lens.
10. My view is these platforms are private governments. They are innovative, but often oriented around problems like tax avoidance, surveillance, pricing, and political control. They buy most of the technical improvements, and deploy those innovations selectively.
11. While @competitionprof sees virtue in the platforms, a Peter Thiel-like view that they are “progressive monopolies”, I see them as political threats and inhibitors of innovation. Regardless, we see the same world, where the consumer welfare standard doesn’t model reality.
12. I appreciate the paper, because it's a clear ideological argument in favor of concentrating power. @CompetitionProf believes that those who have this power tend to be innovative geniuses. That is not how I see a democratic political economy, but it is an honest disagreement.
13. Much of the monopoly debate from the status quo insiders comes from nonsensical methodological lies and misrepresentation. This is premised upon avoiding having a basic debate over how to shape a democracy.
14. I appreciate that @CompetitionProf is spelling out how he sees the world, and how he understands innovation and competition. There's no disparagement of people who disagree as not knowing when to use the salad fork. It's a real analysis. papers.ssrn.com/sol3/papers.cf…
