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Comment by TheOtherHobbes | Hacker News Reader

This factoid has failed so many times it's astonishing it keeps being repeated. Any competitive system tends towards monopoly/oligoply. Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses, and - depending on the market - of customers.

There is no "moving into the market", because as soon as a market consolidates around one or $very_small_number of players, cost of entry and market capture make competition impossible. So competition ends.

This is where we are now with tech. It's basically impossible for anyone new to compete with Amazon, Google, Facebook, etc. It's also where we are with established players in other sectors such as Airbus.

The only two things that can break the logjam are government action to split up monopolists, and the invention of a new market space with a viably low cost of entry.

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That's true in general now. Particularly in industries with high capital intensity, network effects, and/or monotonically increasing returns to scale. But that's a LOT of modern industries.

It wasn't always that way... or, at least, not for such a large proportion of the economy. The problem is that economic models and resulting policy is still based on assumptions that, due to technological change, no longer hold. The logic is usually sound, but the assumptions are ridiculous (see, e.g., abuse of the Coase Theorem).

It's far past time to re-evaluate this perspective, but we keep running into that Upton Sinclair quote: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

What is happening to prices in the online retail market?

Are prices high, or are prices so competitive, so low, so good for consumers, that competitors have literally been complaining about it for years?

Now, tell me again why you think prices aren't competitive?

How would one split up Facebook? Amazon? What would it look like?

Facebook is easy. Break off Instagram and WhatsApp. Those acquisitions should never have been allowed. Amazon might look like splitting retail from AWS or similar.

what exactly is facebook monopolizing?

Advertising.

In what way? Be less vague.

Great, now you have a $480 billion company and two $20 billion companies.

Breaking Amazon apart into a retail business and a cloud computing business to address monopoly concerns is about the most pointless idea possible. If you think that Amazon exerts a monopoly influence over retail and cloud computing, splitting off AWS does nothing to address that.

Eliminate the self-dealing by cleaving the advertising marketplaces from their other businesses. They can still show ads. They just wouldn't be able to run the auctions, exchanges, etc.

> Market mechanisms encourage monopoly/cartel price/payment fixing that benefits shareholders/owners through strong-arming of downstream businesses

Not market mechanism, governments protecting big biz. Without legislative protection a monopoly doesn't last long, as Standard Oil example shows.

A typical cycle of crony-capitalism is: build big biz on a new market -> lobby heavy regulatory framework and a set of monopoly rights which make entering impossible for any new competitor -> push your shills in some agency like FAA, FCC or FDA -> enjoy your unconditional domination.

> The only two things that can break the logjam are government action to split up monopolists

This factoid has failed so many times it's astonishing it keeps being repeated. A century of anti-trust failures without a single example of a decent outcome, yet people still bring this up.

What's the "anti-trust failure"?

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