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Comment by AndrewKemendo | Hacker News Reader

Yes and the first step to solving the problem is acknowledging it.

In order to change some thing you have to prove that it’s happening.

In the case of “What underlying structure creates society’s problems,” increasingly more research is pointing to inequality itself and lack of democratic participation/ownership in the economy. These are the foundational factors driving poverty and precarious economic conditions for an increasing proportion of the population.

The Lions share of corporate profits go to existing shareholders and only rarely employees, and even rarer do employees compose the majority of shareholders (you have no shareholder power as a FAANG employee different than any other retail investor - namely, none)

So no it’s not irrelevant. It’s very relevant if people want to actually have power in determining how the organizations they join are operated.

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The answer is competition. Most of markets nowadays are dominated by 2-5 big players with the CEOs going to the same golf club. Wink-wink, nudge-nudge, prices go up, nobody can do nothing.

If we had 50 competing players, there would be enough incentive for a hungry challenger to lower prices and undercut the competition. Except, over a decade of leveraged acquisitions and antitrust regulators being asleep at the wheel killed the most remote chances of this happening in our lifetime.

The problem with competition is, what happens after someone wins it? This is essentially what has happened in many markets; lots of small companies have been killed by or conglomerated into giant ones that rule the market. Sometimes antitrust regulation can't even help with this; what if there are no acquisitions, just one company doing stuff better killing all competition?

Then when they jack up prices, it creates an incentive for new companies to enter that field and make the same item for less.

A better question might be: what hinders this process today? Capital disparity plays a role (a wealthy company can perhaps make a competitor a buyout offer they can't refuse, or temporarily lower prices to try to kill them), but another major cause is excess regulation and the weaponization of intellectual property.

What hinders the process is that the people holding the capital are the same ones that benefit from the new competition.

So they sell the stock of the company that is wringing out excess profits just as they are putting money into the “disruptor” that is going to capture all the consumers leaving company #1.

Now ensure that you push for a decade of overleveraged growth and regulatory capture (ensuring you don’t get diluted the same as the founders) and now you have shares of an entrenched quasi-monopoly - your task again now is to demand margin increases and stock buybacks in order to exit your position and buy your name on the local college library.

Wash rinse repeat all while taking money/risk off the table personally each round so when it collapses finally and the companies are finally ground into dust, you and your family have long exited and are onto the next thing.

I don't think you answered the question. Your story depends on competition Rising and companies falling. It doesn't explain why markets are winner take all or why competition is slow to rise.

For example, if Amazon has a monopoly, why haven't capitalist profiteers bled it dry yet,

> Then when they jack up prices, it creates an incentive for new companies to enter that field and make the same item for less.

And then the winner just lowers them, now what?

If a company can win a market, that begs the question why. Are there regulatory barriers preventing competition? Can competitors not compete on price?

The answer is the former then we should remove governmental barriers to competition. If competitors can't theoretically undercut the price, then it's hard to see how more competition would favor the buyers. Surely they're not better off with 10 competitors at Double the price.

Last, there is the issue of time. Competition doesn't happen overnight

> If a company can win a market, that begs the question why. Are there regulatory barriers preventing competition? Can competitors not compete on price?

A reason why a new competitor might not be able to compete on price is because of capital disparity. The winner can lower prices, buyout the competitor or if that fails they can always turn to buying out distributors/suppliers/key employees of their competitor

Eventually, the company gets too big and cocky, does a massive mistake and goes out of business/downscales. Like, you know, bad investments of 2008.

The economy must go in growth/bust cycles, where growth brings out new ideas, and bust cleans up the inefficiency. And keeping it decentralized keeps busts manageable.

But if you instead let everyone merge during good times, and then bail them out during bad times, the next good times will never happen - the incentives are all wrong!

And how did we get to this state, through competition. The free market isn’t self sustaining, the goal of competition is to end competition

That claim is very specific to how you define market.

Most markets have never had more than 3-5 major competitors in them because beyond that it gets too hard for customers to differentiate between them, too hard to understand all the available brands etc.

But this depends on a lot on where you draw the boundaries of the market. There probably aren't more than 5 good Chinese restaurants within walking distance of where you live even in a city, for example. But over the whole city there are many more. There are only ~4 main cloud providers globally, but if you expand your definition of the market a bit further there are many more.

In practice for price competition to exist you don't seem to need more than 3-5 players. For example Oracle offer a generous free tier in the cloud space.

The even deeper underlying structure for all of the world's problems is ... Human Overpopulation. Inequality increases with population due to fewer resources available per person. Democracy withers with the ever-growing population because more consumers, constituents, tax payers, soldiers, etc give more power to politicians, overpaid CEOs, etc. Name nearly any global issue and human overpopulation is at least a likely and usually primary factor.

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