Regulating Monopolies

Brief comment on this NYT article by Tim Wu.

Brief comment on this NYT article by Tim Wu.

This article reminds me of Peter Thiel’s infamous claim that monopolies are preferable to competition. No wonder he supported Trump. We need to wean ourselves off their seductive gadgets and networks but I am not so sure where we are going to find the political will to do so.

Part of the problem is that modern monopolies work — they are well designed, they are more efficient than the companies they supplant and they are more customer oriented than a grizzly mom and pop store. Who doesn’t like their Amazon prime and who can live without Google? A monopoly such as Amazon is able to use its central role to bargain for lower prices for the customer — who cares if their employees faint from the heat in the warehouse?

Another reason monopolies work is because it’s easier for them to lobby for favorable policies; they don’t need to worry about competitors with different priorities. Every acquisition by Amazon or Google or Bayer makes it easier for them to get laws passed in their favor and also easier for them to lobby against Verizon or Comcast for net neutrality. It’s easier going against a heavyweight if you’re one yourself.

I am not convinced that antitrust action will work — they are national solutions to companies that are global by nature. Monopolistic capital weakens the nation state itself and the tragedies of Brexit, Trump and Bolsonaro are signs of the powerlessness of nation states to respond to our networked era.