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Business & incomeExperience excerpt · English

> In Economics 101, I learned that in a free and fair marketplace, it was impossible to maintain an …

> In Economics 101, I learned that in a free and fair marketplace, it was impossible to maintain an outsized profit, because competition would always show up to take part of that profit. This is all "perfectly spherical cow" economic theory which does not apply in reality. Do we really have a free and fair marketplace? Where's the competition that's shown up and been able to get any kind of substantial piece of the outsized profit of Facebook, Apple, Microsoft, Google?

Original discussionRolling the ladder up behind us201 source comments · at import
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MI

History doesn't repeat itself, but it does rhyme. Most of the discussion here seems to focus on the events of the past repeating themselves in almost the same manner, and ignoring the differences, which are substantial. We're not talking about goods produced in bulk, but rather about a new intelligence that helps produce job shop type goods. That intelligence itself isn't a physical good though, and it can be copied freely and run elsewhere at almost no cost, and copyright won't save it. It's like toothpaste out of the tube once it's on the internet. If we want to keep on track with the analogy to frame weaving machines, the difference is that capital and the availability of power were required to use those machines, which provided the moat required to protect profits.[Econ 101] Models can be copied, and all of the investment in training used freely by anyone possessing a copy. This migh…

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> In Economics 101, I learned that in a free and fair marketplace, it was impossible to maintain an outsized profit, because competition would always show up to take part of that profit. What you should have learned is that in an idealized, perfectly rational, perfectly competitive market this is true, and you should have also learned that such markets do not exist in reality, not least of all because rational choice theory does not accurately model human behavior, but also because perfect competition is not an attainable condition.

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MI

Yes, many competitors show up, and are promptly purchased for quit a bit of cash and/or stock. Many of these purchases shouldn't make it past anti-monopoly laws, but the regulators are captured. However, the oversized profits are a significant source of incentive for investment in alternatives. Kharma will catch up.

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