Falling prices is not always indicative of a well-functioning competitive market.
Rockefeller was known to deliberately lose money to undercut his competitors and put them out of business. With enough scale, a near-monopoly can provide irrational predatory pricing long enough make competitors insolvent. In between, it looks like the near monopoly is losing market share while prices drop.
Without taking the larger context, it's easy to misconstrue the long-term anti-competitive systemic effects.
Nor did Rockefeller eliminate his competitors. He never got more than a 90% market share. SO was not tried for being a monopoly, it was tried for trying to create one.
SO's market share sank during the trial, as Rockefeller's competitors learned how to compete with him.
See "Titan" by Chernow.
> With enough scale, a near-monopoly can provide irrational predatory pricing long enough make competitors insolvent.
The reason this doesn't work is if X has 10 times the market share of Y, if X wants to lose money to hurt Y, X loses 10 times the money that Y loses. I.e. the larger the market share of X is, the proportionately more money is lost trying to undercut Y.
Chernow is more of a laity source than an academic one. Fun to read, but it’s not a strong source. He tends to over emphasize the efficiency side and neglect the logistical barriers to entry and many would consider Chernows thesis incomplete.
If your claim is that someone needs to have 100% market to be anti-competitive, we’re talking past each other. I know HN can have relatively high levels of binary thinking, but the real world is more complicated and nuanced.
X doesn’t have to perpetually lose money, just long enough to put Y out of business. Modern definitions of predatory pricing did not exist at the time, but that is essentially what Standard Oil was found guilty of in their day. They can also lose market share as new markets emerge but that doesn’t undermine the monopoly argument. If I have a utility in TX and another utility opens in CA, my regulated monopoly is still intact.
I think you are in agreement. The poster you replied to seem to insinuate that immediate revenue (in the Americas/space) isn't the best indicator of latter successful pioneering markets.
What happens when the only way to reduce spending is to reduce your assets? Seems like circular logic at that point. I suppose the market isn’t expected to be rational all the time, but eventually it is.
I believe the idea is to support the “real” economy vs a “paper” economy. The “real” economy manufactures stuff in meat space instead of making value through abstractions like financial derivatives. The real economies are tied to a stronger middle class and national security. That’s the thesis as I understand it.
The fundamental problem is the asymmetry of value creation. Software is perhaps the pinnacle of this, and why tech companies are so unfathomably wealthy.
A team of 10 SWEs can create a product worth $1B with the cost of 10 laptops. You get ten people worth $100M each.
To create $1B in value with any kind of manufacturing business, is going to take hundreds of people utilizing millions in various costs. You end up with something like 10,000 people worth $100k each once you wind your way through all those supply lines.
You said it better. I think the idea is that certain "paper" economies are disproportionately valued in the economy when the dollar is strong. A strong dollar leads to offshoring manufacturing, which leads to an over weighted "paper" economy, which leads to an eroding middle class.
I agree, depending on what services you’re speaking of. Although I don’t know that it meets the explicit aims of the heritage foundation (which was the OPs question).
In addition to being a reviewer, they also submitted their own research to this journal. So it leads to the question: if they were willing to cheat on the side of review with less incentive, why wouldn’t they cheat on the side that provides more incentives?
(Meaning, your career doesn’t get boosted much for reviewing papers, but much more so for publishing papers)
>If you can get high quality medical advice for effectively nothing
This is an area where a confident, but wrong information is extremely costly. It’s like saying an LLM can give you high quality directions on how to tap into a high voltage transformer. Sure, but when it’s wrong, it’s very very wrong with disastrous consequences. That’s why professions like doctors and Engineers are more regulated than others.
It is definitely too early to expect AI medical advice to be usable (except in very limited instances) but the question is how long and how far will that change? After all, human doctors don’t do so well with new or under documented or rare conditions (consider the history of alpha-gal allergy or lyme disease sufferers even now).
I think the issue is that someone working in public office had influence to affect that probability, and their relatives stood to gain from it.
I don’t know enough about the ethics laws to know if it was strictly illegal, but it does create a smell.
Suppose a county engineer has influence on whether oil drilling will be allowed (they don’t make policy but consult those who do), and prior to approval their relatives buy up a lot of land in the area. That engineer may not have been the deciding factor, but it seems like it runs afoul of ethics laws/standards.
If you could identify where fees get decoupled from profit in finance, I’d be open to the position that they aren’t related but you didn’t share anything along those lines. Considering the costs like cash-back programs that would erode the profitability of those fees are largely in the banks control, I don’t think that is a strong position.
You are the one implying that the revenue becomes profit. The burden is on you to make the case not on me to prove a negative. There are plenty of high revenue low margin businesses. There are also low revenue high margin businesses. So there is not a direct correlation between revenue and profit.
This is bordering on a non-productive discussion but:
Yes, revenue provides cash flow, not profit. And costs provide the other part, as was already mentioned. But if it increases cash flow without increasing relative costs, it increases profit. Do you think banks would charge fees if they could make more money by removing them? Again, the banks are largely in control of these costs, like the amount of cash back they provide. For example, the federal reserve reports that bank fees account for 1.82% of purchase volume, while cash back programs account for 1.57% of purchase volume. In other words, they make a profit on balance.
You can read the financial statements to get more information. That's where the above numbers came from. They don't generally say "Fees contribute to X% of profits" but they do indicate they are relatively large parts of revenue. For example, JPMorgan lists $5.97B in fee revenue and rewards cost $4.28B, with the difference being profit. So where are the extra costs you are implying coming from that make fees a net cost?
>> Cards don't make money from their fees. They make money from people who fail to pay and then pay the ridiculous interest.
> Interchange fees seem to be a sizable portion of revenue. Discover has listed them as 29% of revenue, BoA at ~$10B annually…
My complaint is that pointing at revenue alone does not rebut the initial statement. That's all. The argument was insufficient, not your side of the argument is wrong.
I understand that, and I was trying to be helpful and foster an discussion instead of snark. I clearly pointed to costs as well, but it didn’t seem to sink in.
Saying “revenue doesn’t equal profits” is superficially true but lacking any real substantive claim. It’s like saying “to lose weight you just need to burn more calories than you consume.” True, but a lazy attempt at a retort.
I tried to foster discussion. If profits = revenue - costs, I asked where those costs are coming from that would erode those profits. Yet again, you replied in a manner that limits discussion. Many of us come to HN because we expect higher levels of discussion than the typical Internet forum cesspool, like the guidelines lay out.
It’s been a few years since I looked deeply into it, but I think we produce enough to have everyone survive but not necessarily thrive. At the time, it came out to something like 1700 kcal per person. Even if we did have enough, the next problem is logistics of allocating that food to everyone who needs it.
A lot of food production worldwide is used by meat production, which is quite inefficient. It does generate some useful side product (manure), but also a lot of bad side product.
In some places, almost every field is dedicated to meat production.
Consuming less meat and shifting food production away from meat would be very good for the environment and instantly solve the issue of the amount of calorie produce.
But as you pointed out, this is not the actual issue. Getting food to people who need it is almost entirely a political and logistical issue at this point. War (especially civil war), natural disaster, with local power stealing international aid, etc, are mostly the biggest responsible for hunger in the 21' century.
We have the technology and logistics to accurately drop-ship huge amount of food in even the most remote places in the world, even when the local infrastructure is heavily damaged or inexistent. We cannot deal with local power decision to voluntarily starve a place.
>Consuming less meat and shifting food production away from meat would be very good for the environment and instantly solve the issue of the amount of calorie produce.
The problem with this statement is that it implies all calories are equal in terms of nutrition. Meat is very protein dense compared to most plant foods and that can be important. That’s not to say it’s impossible to live healthily on only plants, but it’s not as simple as swapping calorie sources.
Fun fact, some plant like Bulgur or Lentil are almost as calorie dense as some meat. But to my understanding, they lack “complex” protein or something ? Regardless, your don't have to cut meat entirely. The issue is that we consuming way too much of it. In many developed country, eating meat every day is very common. Eating meat once or twice a week is enough to get all the right nutrient and not having deficiency in things like B12.
They lack all the essential amino acids, but you can easily circumvent that by combining sources. People have been doing so with combinations like rice and beans for generations. But the question is whether the calories cited come from enough variety to meet those nutritional needs. Again, all calories aren’t created equal.
I don’t disagree that western societies probably eat too much meat. But that is the trend of any burgeoning middle class, and it’s doubtful it will change.
The average per capita is closer to 2,600 kcal/day. Not sure how that breaks down when normalized by the individual country population. It also doesn't include waste. In the US at least, waste is near 40%.
At the top, under FOOD, select "All food." In the country list, select "World." Above the map, click "Line." Finally, mouse over the graph to see the values. The latest value they have is for 2023 and shows 3,005.52kcal/day. Awful lot of significant figures there....
Rockefeller was known to deliberately lose money to undercut his competitors and put them out of business. With enough scale, a near-monopoly can provide irrational predatory pricing long enough make competitors insolvent. In between, it looks like the near monopoly is losing market share while prices drop.
Without taking the larger context, it's easy to misconstrue the long-term anti-competitive systemic effects.
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