Should we have more monopolies?
by tdaxp ~ July 1st, 2009
A writer at gnxp thinks so:
Still, some of the recent ones are deserved, such as cloning a sheep and sequencing the human genome. Overall, though, the pattern is pretty clear — we haven’t invented jackshit for the past 30 years. With the two main monopolistic Ivory Towers torn down — one private and one public — it’s no surprise to see innovation at a historic low. Indeed, the last entries in the building / manufacturing and household categories date back to 1969 and 1974, respectively.
On the plus side, Microsoft and Google are pretty monopolistic, and they’ve been delivering cool new stuff at low cost (often for free — and good free, not “home brew” free). But they’re nowhere near as large as Bell Labs or the DoD was back in the good ol’ days. I’m sure that once our elected leaders reflect on the reality of invention, they’ll do the right thing and pump more funds into ballooning the state, as well as encouraging Microsoft, Google, and Verizon to merge into the next incarnation of monopoly-era AT&T.
via Gene Expression: Monopoly allows innovation to flourish.
Having recently reviewed Dr. Narain Gehani’s Bell Labs: Life in the Crown Jewel, it certainly appears that Bell Labs research profoundly suffered after the divestature of the 1980s and “trivestature” of the 1990s. Likewise, it is hard to think of anything very new in terms of computer science — most of what we had is refined version of what we had 15 years ago.
However, monopolies (and companies too big to fight, generally) bring us horror stories like $11,000 cell phone bills, theft from the public domain, rule by MBAs, and other bad things.
So, are some monopolies good for innovation? And if they are, what sort of monopolies should be encouraged?
The New York Times uses top 1% of income, not wealth. From the legend:...
July 1st, 2009 at 9:11 am
The answer to this question is, “it depends.” Monopolies rise and fall all the time and are usually temporary phenomenons. MSFT & GOOG are monopolies now, but very well could be supplanted by rivals (that currently exist or have yet be created) in the future. To take two specific institutions that excelled in innovation in a specific period of time and say that this is the solution to a perceived problem demonstrates very limited thought on the subjects of innovation, competition, and economics. There is much innovation & invention occurring right now (although I can not speak to computer science.) Again, the answer to the question is, “it depends.” The “need” for monopolies depends on the contemporary dynamics of the marketplace.
To answer the second question, I do not believe “we” should be encouraging any type of monopoly for the very reasons that Dan points out. Although, as a MBA, I would like to point out that it is “rule by Ivy League MBAs” we should be concerned about!
Regards,
TDL
July 1st, 2009 at 11:20 am
No. We already have enough editions as it is.
http://www.amazon.com/s/qid=1246475969/ref=sr_nr_i_0?ie=UTF8&rs=&keywords=Monopoly&rh=i%3Aaps%2Ck%3AMonopoly%2Ci%3Atoys-and-games
July 9th, 2009 at 2:48 pm
TDL,
Excellent answer, and I agree.
The broader point seems to be that monopolies, out of an attempt to impress political leaders into not breaking them up, are able to fund pure science at an impressive rate. However, this works as an indirect form of federal support. Better, I think, to have free markets and federally-funded science.
Jeffrey,
LOL! Too bad Beijing monopoly is both $50 and only in limited circulation!
July 12th, 2009 at 4:18 pm
Haven’t read the gnxp article yet, but my initial thoughts are that:
a) Some industries produce more innovation in monopolistic conditions, but others do not.
b) Monopoly is a relative term. Google hasn’t prevented Bingo, Cuil or Yahoo from trucking along, nor has Microsoft killed Apple or Linux.
c) CAREFUL regulation by the government can reduce the negative effects of a monopoly.
July 20th, 2009 at 11:51 am
Michael,
I think you sum up the consensus very well!