My inclination is for brute force antitrust measures, some of which are compatible with libertarian sentiments.
By brute force, I mean a general downscaling of the biggest corporations, whether they be true monopolies or not. For a tiny niche, the value of economies of scale may outweigh monopoly pricing. If the niche is small, raising capital to invade the niche is feasible, so the implied threat of competition can be more credible than in an oligopoly of giant firms.
There are simple, rule-of-law compatible measures to do this. For starters, let's recognize that overregulation of public corporations increases economies of scale. Thanks to Dodd-Frank, small investors are "protected" from being able to invest in growth companies while they are still in full-on growth mode.
Another measure is the level the cost of capital for new firms vs. giant firms retaining earnings. Amazon can enter a new niche using pre-tax retained earnings. Some kind of cap on using R&D for new businesses as a deduction against existing products may be in order. (Or this might be too complicated.) Note that Amazon grew enormous while showing no profits for years -- and they didn't require mass infusions of fresh capital.
Finally, make the corporate income tax truly progressive. Currently, the rate is flat. Back in 2017, it was lumpy, with the highest bracket being 39% for $100,000-335,000. The rate for the kinds of corporations you see listed on exchanges was 35%, with no difference between an Apple and a penny mining stock.
Make the brackets step on on the major lines of a log graph, and the market will break up the behemoths. Indeed, corporations with high retainable earnings may function as incubators. DuPont was a prime example of this model. They would develop a product and this spin it off. At one point they owned General Motors.
One thought I had was to tax social networks based on Metcalfe's law. The value of a social network is equal to (n-1) squared where n is the number of nodes on the network. Current tax systems are linear while the value of networks scales exponentially with the number of users.
Basically structure the taxes in such a way as to discourage social networks from getting too big. More smaller social networks will reduce their power over the individual. With just one social network embracing free speech the other networks have taken a step in that direction. So more competition is better.
But the tax would only apply if the social network used an algorithm to sort content. The power is mostly in the algorithm.
All of them, your main issue is that you're trying to regulate an Empire under a single law to govern the whole Empire - rather than separate laws for regional variance in peoples, cultures, and other issues. That's one issue.
The other is that you're continuously harping on the loss of efficiency. That is simply GOING to happy as we have become the ultimate consumerist, efficient market of buyers and sellers the world has ever seen! We've broken all the laws to the point where we're on the brink of revolution, and leveraged usury and tech to make those efficiencies maxed out. The efficiency must give way. The only questions are - what do you want to gain, what do you want to sacrifice, and will it be enough for the center to hold?
I think a solution has to be a combination of them - of forcing them to carry customers, share resources, and downsize. I think that you get more innovation from smaller companies, not larger ones that place protective regulatory moats, buy and cannibalize other companies to expand business (then place more moats!), and a bunch of other nefarious deeds.
I think that, if this isn't done soon, and that if congress and the executive branch don't tell the Judicial just to steamroll it - that it will just be steamrolled in a less pleasant way. Declare state of emergency and get it done.
Nice work. After reading your review, I've come to the same conclusion as you did. There is no clear winner. It may require incorporating the concepts of more than one proposal. I'm thinking that a good way to approach this problem is to momentarily put aside the existing regulations and legislation, and start with a clean slate with regards to consumer contract law, digital property rights, and digital serfdom, e.g. the "If I was Absolute Monarch of America" approach. A clearly defined summary of the desired outcomes should be established, after which we can more easily identify what's required to implement a remedy. I also agree with your opinion that this problem stems from a gross abuse of existing contract law. I worry that some of the proposals are incomplete and will eventually be worked around. Perhaps we should reimage a new consumer contract law framework.
Your comment led me to reimagine the 1787 constitutional convention; and then to think perhaps we need another convention of the states to work up a new "from scratch" sub constitution?
I only gave Woe's essay a quick scan this evening, pending a deeper reading. But right now I gather there are no serious technological/ technical issues that would involve national and international technical committees? Except perhaps in the realm of identity validation, authorization protocols, and encryption measures to support them? Plus whatever quantum computing might appear to require??
More questions than answers from my keyboard, but a great and necessary essay program on a vital subject, so thank you Woe.
Except for the first two, these proposals would only create greater abuse through uncertainty that only the largest businesses could mitigate. The unintended consequence would be crushing of small and entrepreneurial businesses, greater centralization of private power, and still more calls for “reform” - repeating the cycle until capitalism is crushed.
"Antitrust reform seems to offer robust advantages over some of the other proposals. It addresses root causes—market concentration and anticompetitive conduct—systematically, not just symptoms, leveraging a century of legal precedent for legitimacy and adaptability."
On the other hand, just ask Karl Denninger how well it's worked in the healthcare field...
Reading through some of the suggestions, I suspect different scopes of the problem will require different solutions. Free speech and related issues, are very different from addressing the monopoly of Amazon.
EDIT: One concern I have coming to the end of the article is the continued conflation of "harmful content" with "misinformation". The misinfo tech giants and the elites are worried about, isn't the misinfo I'm worried about.
Whoever wins...we lose. The fragility of the market(its running on empty) requires more digital instead of less. I think that's why A.I. is being pushed. Digitizing the world economy will require an intellect to run it that is beyond human.
It would help to look at the causes of the problem. I believe the two main ones are:
1) The network effect of social media platforms, i.e., you want to be on a platform with many people to interact with.
2) Large inequalities in technical skills.
It's possible to address problem (1) by using decentralized protocols instead of centralized corporate platforms, this is how the basic internet protocols still work, and many early networks like usenet and irc; there have been more recent attempts to follow this model with urbit and nostr.
Unfortunately this is where problem (2) comes into play, without a corporate UI department, decentralized protocols end up too rough around the edges for non-geeks.
The problem with Common Carrier is that Sites like Google, Facebook, Twitter (when it was Twitter), and others is that they don't require you to become a paying member of their service. That's how they get away with banning people or denying them service.
The carriers that do charge you money or move your money, as in Paypal and Stripe, should've been forced to become common carriers. They own greater than 80% of the market.
Any other place, like Amazon, which charges for their site, should publish everything sent to them.
Until everyone is treated the same, there won't be equal standing.
The underlying issue is the fact that collectivist ideologies - particularly communism but socialism, trade unions, and essentially everything else - have been historically discredited by the collapse of the Second World, with which they were deceptively associated. Today's left promotes completely different concept, mostly sick shit. The resulting atomization of society is what provides a fertile ground for the gig economy, contract law, and serfdom.
People perceive joining forces in a collectivist fashion as something inherently defective.
No regulation, as per the above, will remedy that, no matter how well intended and how well constructed.
People have to pull their head out of their ass and re-embrace collectivism, which is what made the second half of the 20th century such a unique time in history, where people actually had quite a bit of say over their prosperity.
BTW, collectivism will probably have to be something different from its Marxist incarnation. Somebody has to come up with something.
Quite the tour de force!
My inclination is for brute force antitrust measures, some of which are compatible with libertarian sentiments.
By brute force, I mean a general downscaling of the biggest corporations, whether they be true monopolies or not. For a tiny niche, the value of economies of scale may outweigh monopoly pricing. If the niche is small, raising capital to invade the niche is feasible, so the implied threat of competition can be more credible than in an oligopoly of giant firms.
There are simple, rule-of-law compatible measures to do this. For starters, let's recognize that overregulation of public corporations increases economies of scale. Thanks to Dodd-Frank, small investors are "protected" from being able to invest in growth companies while they are still in full-on growth mode.
Another measure is the level the cost of capital for new firms vs. giant firms retaining earnings. Amazon can enter a new niche using pre-tax retained earnings. Some kind of cap on using R&D for new businesses as a deduction against existing products may be in order. (Or this might be too complicated.) Note that Amazon grew enormous while showing no profits for years -- and they didn't require mass infusions of fresh capital.
Finally, make the corporate income tax truly progressive. Currently, the rate is flat. Back in 2017, it was lumpy, with the highest bracket being 39% for $100,000-335,000. The rate for the kinds of corporations you see listed on exchanges was 35%, with no difference between an Apple and a penny mining stock.
Make the brackets step on on the major lines of a log graph, and the market will break up the behemoths. Indeed, corporations with high retainable earnings may function as incubators. DuPont was a prime example of this model. They would develop a product and this spin it off. At one point they owned General Motors.
One thought I had was to tax social networks based on Metcalfe's law. The value of a social network is equal to (n-1) squared where n is the number of nodes on the network. Current tax systems are linear while the value of networks scales exponentially with the number of users.
Basically structure the taxes in such a way as to discourage social networks from getting too big. More smaller social networks will reduce their power over the individual. With just one social network embracing free speech the other networks have taken a step in that direction. So more competition is better.
But the tax would only apply if the social network used an algorithm to sort content. The power is mostly in the algorithm.
I like that idea. I haven't heard the notion of taxing networks based on Metcalfe's Law before but now that I've heard it, it's fantastic.
All good thoughts, but the hour is late!
All of them, your main issue is that you're trying to regulate an Empire under a single law to govern the whole Empire - rather than separate laws for regional variance in peoples, cultures, and other issues. That's one issue.
The other is that you're continuously harping on the loss of efficiency. That is simply GOING to happy as we have become the ultimate consumerist, efficient market of buyers and sellers the world has ever seen! We've broken all the laws to the point where we're on the brink of revolution, and leveraged usury and tech to make those efficiencies maxed out. The efficiency must give way. The only questions are - what do you want to gain, what do you want to sacrifice, and will it be enough for the center to hold?
I think a solution has to be a combination of them - of forcing them to carry customers, share resources, and downsize. I think that you get more innovation from smaller companies, not larger ones that place protective regulatory moats, buy and cannibalize other companies to expand business (then place more moats!), and a bunch of other nefarious deeds.
I think that, if this isn't done soon, and that if congress and the executive branch don't tell the Judicial just to steamroll it - that it will just be steamrolled in a less pleasant way. Declare state of emergency and get it done.
Well Done on the Long Essay Pater! Will bookmark, read & listen multiple times! 😊
Nice work. After reading your review, I've come to the same conclusion as you did. There is no clear winner. It may require incorporating the concepts of more than one proposal. I'm thinking that a good way to approach this problem is to momentarily put aside the existing regulations and legislation, and start with a clean slate with regards to consumer contract law, digital property rights, and digital serfdom, e.g. the "If I was Absolute Monarch of America" approach. A clearly defined summary of the desired outcomes should be established, after which we can more easily identify what's required to implement a remedy. I also agree with your opinion that this problem stems from a gross abuse of existing contract law. I worry that some of the proposals are incomplete and will eventually be worked around. Perhaps we should reimage a new consumer contract law framework.
Your comment led me to reimagine the 1787 constitutional convention; and then to think perhaps we need another convention of the states to work up a new "from scratch" sub constitution?
I only gave Woe's essay a quick scan this evening, pending a deeper reading. But right now I gather there are no serious technological/ technical issues that would involve national and international technical committees? Except perhaps in the realm of identity validation, authorization protocols, and encryption measures to support them? Plus whatever quantum computing might appear to require??
More questions than answers from my keyboard, but a great and necessary essay program on a vital subject, so thank you Woe.
Except for the first two, these proposals would only create greater abuse through uncertainty that only the largest businesses could mitigate. The unintended consequence would be crushing of small and entrepreneurial businesses, greater centralization of private power, and still more calls for “reform” - repeating the cycle until capitalism is crushed.
"Antitrust reform seems to offer robust advantages over some of the other proposals. It addresses root causes—market concentration and anticompetitive conduct—systematically, not just symptoms, leveraging a century of legal precedent for legitimacy and adaptability."
On the other hand, just ask Karl Denninger how well it's worked in the healthcare field...
That's why I said "seems" :-)
Reading through some of the suggestions, I suspect different scopes of the problem will require different solutions. Free speech and related issues, are very different from addressing the monopoly of Amazon.
EDIT: One concern I have coming to the end of the article is the continued conflation of "harmful content" with "misinformation". The misinfo tech giants and the elites are worried about, isn't the misinfo I'm worried about.
https://substack.com/@clementpaulus/note/c-101605039?r=5c1ys6&utm_medium=ios&utm_source=notes-share-action
Whoever wins...we lose. The fragility of the market(its running on empty) requires more digital instead of less. I think that's why A.I. is being pushed. Digitizing the world economy will require an intellect to run it that is beyond human.
None of these proposals actually solve digital serfdom. At best they mitigate some of its effects at the cost of further entrenching it.
It would help to look at the causes of the problem. I believe the two main ones are:
1) The network effect of social media platforms, i.e., you want to be on a platform with many people to interact with.
2) Large inequalities in technical skills.
It's possible to address problem (1) by using decentralized protocols instead of centralized corporate platforms, this is how the basic internet protocols still work, and many early networks like usenet and irc; there have been more recent attempts to follow this model with urbit and nostr.
Unfortunately this is where problem (2) comes into play, without a corporate UI department, decentralized protocols end up too rough around the edges for non-geeks.
Good points, yes.
People drive on the Interstate highway system, but it wasn't built for them.
It was built for the military, but civilians get to use it - albeit in a highly regulated and heavily policed fashion.
Now do the Internet.
Great piece, TOW. Nice analysis and opening salvo.
Looking forward to future pieces about some of the problems with our digital commons and possible solutions. Keep leading.
The problem with Common Carrier is that Sites like Google, Facebook, Twitter (when it was Twitter), and others is that they don't require you to become a paying member of their service. That's how they get away with banning people or denying them service.
The carriers that do charge you money or move your money, as in Paypal and Stripe, should've been forced to become common carriers. They own greater than 80% of the market.
Any other place, like Amazon, which charges for their site, should publish everything sent to them.
Until everyone is treated the same, there won't be equal standing.
Quite an analysis but it misses the point.
The underlying issue is the fact that collectivist ideologies - particularly communism but socialism, trade unions, and essentially everything else - have been historically discredited by the collapse of the Second World, with which they were deceptively associated. Today's left promotes completely different concept, mostly sick shit. The resulting atomization of society is what provides a fertile ground for the gig economy, contract law, and serfdom.
People perceive joining forces in a collectivist fashion as something inherently defective.
No regulation, as per the above, will remedy that, no matter how well intended and how well constructed.
People have to pull their head out of their ass and re-embrace collectivism, which is what made the second half of the 20th century such a unique time in history, where people actually had quite a bit of say over their prosperity.
BTW, collectivism will probably have to be something different from its Marxist incarnation. Somebody has to come up with something.