A Question About Monopolies: Should They Exist?


I'm currently weighing a case I've been considering about the concept of monopolies. It started from this interesting NYTimes article asking the question of whether it makes sense to break up companies like Google, Facebook, and Amazon:

https://www.nytimes.com/…/is-it-time-to-break-up-google.htm…

First, it points to a 10 year shift in the 5 most powerful companies. In 2007, it was Microsoft, ExxonMobil, General Electric, Citigroup, and Shell Oil. Nowadays, Microsoft is still up there, but the other players are Apple, Google, Amazon and Facebook. It explains their degree of market share in their respective domains, and points out that they aggressively acquire other companies as well, so their growth doesn't show any signs of languishing.

Besides "Natural" monopolies like water/telecommunications/etc., the argument seems to be that other kinds of monopolies, massive consolidations of private power are dangerous. Examples of this can be seen with the 2008 banking crises (and really the banks in general which are disaster zones of corruption) and also the recent fake news business that Facebook and Google regrettably became entangled with. And even in the case of monopolies we regard as making sense, they become regulated as public entities. Google and Facebook are beginning to look like public utilities in a similar sense that AT&T and Bell Labs were. They have clearly crushed other entities like newspapers and make or break whether and how other entities can have their information accessed, which is becoming a modern necessity (it really probably already is). Plenty of economists argue that these companies provide enormous advantages to incumbents.

The solutions it provides are as follows:
1) Prevent these companies from collecting acquisitions like Twitch, Instagram, Double Click, Snapchat, etc.
2) Regulate them as public entities and have them license out their patents.
3) Remove the free ride content on these sites, forcing them to pay for and take responsibility for it (they say policing it would be too onerous, but they already do it for pornography)

This is complicated by the view of Peter Thiel, a tech mogul and businessman that works with Trump, very smart guy, who believes that monopolies are good things:

https://truthonthemarket.com/…/peter-thiel-on-the-virtues-…/

1) Lack of competition allows these companies to care for their employees, to care about things other than profits (like ethics: Google "don't be evil"), to effectively plan long term, to finance ambitious projects, etc.
2) Monopolies are bad in static worlds like the board game monopoly since they merely function as rent collectors, but in a dynamic world, they provide bedrocks of abundance for creative innovation everywhere
3) Government does it: patents create monopolies
4) The history of progress is better monopolies replacing worse one's
5) Economists are obsessed with perfect competition because they use the mathematics of 19th century physics, equilibrium state thermodynamics, which is easy to model, but business are not interchangeable atoms

https://medium.com/…/why-peter-thiel-is-dead-wrong-about-mo…

Some monopolies show clear signs of being a problem. Comcast & Time Warner in Cable TV give terrible customer service. PG&E electricity has price growths, a classical artificial scarcity worry issue with monopolies. Microsoft is not innovative and has had a flat stock price for 10 years, etc. This decline in innovation seems to be a principle worry at Google, with some people seeing that as already starting to happen, but in other spheres it's looking as innovative as ever.

Companies like Google, Facebook, Amazon, etc. are a critical part of our culture nowadays. They are incredible in the service that they provide, but also represent grave dangers. What should we do about them? It’s a case I’d like to come back to, but I thought that it was helpful to lay out the intellectual boundaries of it that I’ve traced in the meantime to see if it engendered any ideas.

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