479 Comments

You write: "I acknowledge that this kind of thing can feel a little picayune relative to policy disputes that speak more to our core values and our identity as a nation."

Allowing competition, providing a path for individuals (hygienists, in this case) to find a path to financial success, avoiding unnecessary regulation and dismantling regulatory capture wherever it is found are, or should be, part of our core values as a nation.

Thank you for highlighting this example.

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Occupational restrictions deserve way more criticism than they get, I hope stigma builds up against them like has happened with NIMBYism. The economic cost is bad but there’s also the human cost of people being prevented from fulfilling their potential.

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The human cost pisses me off much more than the economic cost. The path to a better and more fulfilling life is being closed off for millions of people through overly restrictive licensing and regulatory structures.

All the new antitrust thinking by Lina Khan, Matt Stoller, et al., is focused on the big tech companies, and seems to be motivated by a general sense of anti-bigness and a little bit of envy at highly profitable businesses. I wish they would focus their intellect on how government protection creates monopoly-like barriers to entry. It would help a lot more people.

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I’m always leery of talking about envy, but what’s your specific objection to the anti-bigness?

My personal position is that it’s just generally bad to have businesses that are big enough to compete with the government. Economies of scale are nice, but there’s a point of diminishing returns where we lose our democracy and turn into a corporatocracy.

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When being big is achieved because a company provides a superior product or service, I see no issues*. Amazon, to use the example that brought Khan to prominence, is big because they provide something lots of people are willing to pay for. I don't think Amazon is a threat to democracy.

*Anti-competitive behavior should still be investigated and prosecuted where it exists.

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But even there, part of how Amazon got big was by using its position as both marketplace and market entrant to rig the game. They’d get pricing information on pacifiers, and then systematically undercut their own sellers until they could corner the market.

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What market have they "cornered"? Their share of US retail sales is 10%, and 38% of online sales. I can buy pacifiers (your example) from Target, Walmart, CVS or any number of competing retailers.

Addendum: the example you use would also apply to every store-branded item sold by any retailer, including Walmart, Kroger, Albertson's, Walgreen's or Costco.

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I find this a little maddening! What consumer is worse off because Amazon exists! They clearly provide enormous value to consumers!

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Like most human beings with an internet connection and a bank account, I find Amazon has made my life vastly more convenient. And yes, that does indeed imply I remember the era before it. I love Amazon.

But, c'mon, they totally abuse their tradition of dominance on a regular basis.

https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-sues-amazon-illegally-maintaining-monopoly-power

Capitalism is amoral. Capitalists can't help themselves. Their incentive is to maximize profits and share price, and this dynamic remorselessly leads them to do things that create deadweight losses. No, that doesn't make them evil ( I wrote "amoral" not "immoral"). Yes, that does mean we have to clip the wings of excessively powerful firms from time to time. Apple is next, I hope.

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Jan 10
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I’m curious what you think about Apple in this context. I’ve sort of convinced that Apple’s huge market share in smartphones is at least part of the reason why Apple iPhones haven’t come down as much in price as say flat screen TVs over the past 20 years. It’s also true that apple’s smart phone has gotten meaningfully better over past 20 years so there is some justification for prices remaining high.

Nonetheless, it seems like Apple’s market share means that while they are not a monopoly, they are close enough to one to have meaningful impact not just on iPhone prices, but squeeze suppliers and meaningfully depress wages.

Sort of a big windup to say I think Robert Bork’s conception of problematic monopoly (which heavily influences how we examine monopolistic practice in this country) is much too narrow and ends up letting too many monopolistic and long term harmful to consumers practices.

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Android has a 70% market share of the global smartphone market, and 41% in the US, so I disagree with the premise of the question that Apple has a "huge" market share.

https://explodingtopics.com/blog/iphone-android-users

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Gut reaction is that the answer lies more in the fact that smartphones have gotten meaningfully better over the past 20 years versus TVs.

Smartphones have gotten more complex and have quite a few core technologies that flagships have to be leading on: CPU/GPUs, cameras, screens, and modems. TVs on the other hand only really push on one technology: screens. They share this technology with a bunch of other products distributing the cost of research and development.

Further, and again this is gut reaction, I think demand for smartphones has been more reliably increasing than TVs. It's fairly normal to buy a new TV every 5 years if you're an enthusiast, maybe, whereas a typical household is probably taking that TV closer to a decade. (Just guessing.) Smartphones seem reliably on that annual cycle for enthusiasts and the 2-3 year cycle for everyone else.

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I think Apple should be able to charge software vendors whatever it damn well pleases for access to its retail space (App store). It's very valuable cyber territory. But what it shouldn't be allowed to do is make it so difficult for *customers* to use non Apple retailing for apps. That would be the ideal compromise in my view. Pretty clearly, Apple's rich margins in the app sector are substantially driven by the fact that, if you want to reach customers of iOS apps, you have to go through Cupertino's online space.

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Are you not aware of Amazon's anti-competitive-pricing stuff? Basically they tell sellers: You cannot offer a product on marketplace if that product can be found anywhere else at a lower price.

This was key to the creation of the Prime Free Shipping regime, and once people subscribe to Prime, it's easier for Amazon to keep them using Amazon rather than going to more-specialized alternatives for various products. The shipping is getting paid for by way of higher prices. If sellers were free to offer the product elsewhere at a lower price point with shipping broken out into a separate line item, then Amazon would have had a much harder time getting people to subscribe to Prime.

(To be clear I am not _radically_ anti-Amazon, I think some of the criticisms of them go overboard. But I absolutely do think they have engaged in anti-competitive behavior, with price manipulation being the most blatant.)

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>big enough to compete with the government

I mean what business has $4T/year in revenue?

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Apple's peak sales was something like $383B in 2023 per Bing. That's almost 10% of the way there.

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Think how much revenue Apple could produce if they had an IRS.

Private firms cannot compete with government, The very idea is absurd.

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At its height the Dutch East India Company was worth about ~$8 trillion in today's dollars.

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It's mergers/acquisitions that seem worth of super attention.

The US Steel story is a useful cautionary tale about allowing growth by mergers.

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I agree with this philosophically. However, as a worker in an industry that has seen massive consolidation (which hurts workers (my) bargaining power through reduced employment options), I also see that if you don't do it here, then the competition does it overseas and you get crushed in marketshare. Rock meet hard place..... (semiconductors fwiw)

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Oddly I recall writing an undergraduate paper (~ '1959) about the US steel industry and reading about the US not being first with the BOF.

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Not if you have a government that recognizes the strategic need to have a local semiconductor industry…

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Someone was talking recently about how monopoly or oligopoly is the incubator of innovation, not competition - think it might have been Ezra Klein using the example of Bell Labs.

They were in a protected moat because AT&T just printed money, so the payoff for their research didn't have to show up next week or next year. Meanwhile the amount they came up with was staggering. Google, Microsoft, Apple and Amazon are in less regulatorily protected but similar situations.

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But that's a pretty extreme outlier. AT&T was a utility. How many other utilities ever built a Bell Labs? Vanishingly few. Ameren UE, ComEd, ConEd, PG&E... all of them "print money", but none of them have bothered with anything similar.

Bell Labs seems to me like a peculiar legacy of one inventor, Alexander Graham Bell, a legacy *enabled* by his company "print[ing] money", but not *caused* by it.

I agree that the current crop of tech megalopolies have done *slightly* better -- they're all, along with IBM, deeply involved in the AI race, something we wouldn't have seen previous generations of incumbent tech-firms-cum-industrial-giants-cum-utilities do -- but it doesn't appear to me that any one of them has devised, let alone internalized, the "recipe for success [at innovation]".

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Not to mention the fact that there seem to be a lot more examples to the contrary (monopoly stifling innovation) both in the US and abroad. Also: we can't visit the parallel universe where AT&T was broken up decades before. Maybe we'd have seen more innovation than we actually got.

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well, I've also heard that innovation described as a product of high tax rates. It was so expensive to get the money out of the corporation that it lowered the threshold for an R&D investment to seem reasonable.

Apologies for not having the footnotes on this one. It was some podcast I think - maybe classic Weeds back in the day?

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Similar situations, except for, er, the part where they come up with staggering amounts of innovation, I guess…

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Why? Competition is generally very good.

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Not sure how you think "bigness" serves competition. I didn't even bring up competition.

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I am on mobile so apologies if I replied to the wrong comment but I thought you said you didn’t like companies getting big enough to compete with government, when that sounds very good to me.

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Porque no los dos?

Also, the “a lot more people” contention suggests that you’re as blind to rural issues as the typical lefty democrat. Just gutting Cargill or Tyson would help a lot more people than scope of practice reforms.

You understate corporate monopoly power’s harms vs those of individual/professional rent-seeking, David M overstates them.

The truth is that we desperately need to go after both sets of problems and there’s no constituency for a grand bargain to do so.

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I'm all for enforcing and expanding anti-competitive statutes against Cargill, Tyson (and their competitors, ADM, Pilgrim's Pride, Bunge, Perdue, etc). Just not for "they are big" reasons.

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Sure, and I agree that Khan is fucking up by the numbers. But while Stoller whiffs sometimes, he also smacks one out of the park sometimes, as he has done when calling attention to ag. processing collusion, PBM insanity, pharmaceutical supplier contract language, defense contractor consolidation and corruption, or regional hospital system consolidation and private capital investment/debt milking...

His takes on big tech are half-baked at best, but a lot of the rest of what he writes is more on-point.

Why Khan isn't positioning herself on firm ground and daring the Supreme Court's neo-feudalist faction to shoot her down on issues of great importance to rural folks is beyond me. That they *will* is obvious; that it will help Democrats in rural areas and swing states also obvious.

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“ His takes on big tech are half-baked at best, but a lot of the rest of what he writes is more on-point.”

Or is this just Crichton’s Gell-Man amnesia?

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I wonder if your tally of when Stoller "smacks one out of the park" includes this one on realtors, or just those instances where he gores a disfavored ox?

I actually agree with Stoller and Khan regarding the lack of prosecution of anti-competitive actions. I think almost all non-competes should be illegal, for example. But Stoller's exaggerations and tortured rhetoric turns me off.

https://www.thebignewsletter.com/p/the-middleman-economy-why-realtors

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I haven't been able to stomach Stoller's illiteracy with respect to tech, and fear of falling prey to Gell-Mann amnesia has kept me away from everything else he's written. Can you (or anyone else) recommend anything specific where he's been good?

(Er, never mind, I kept reading down thread)

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Jan 9
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I’m not aware, one way or the other, of Khan’s work on these fronts but Stoller has gone after the company that monopolizes class rings, along with the company that makes and repairs milkshake machines (true villains, that lot), among many others.

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Class rings - something economically unimportant, so it’s easy to ignore, but with sentimental value, so people are willing to pay exorbitantly. That’s insidious.

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“…the company that makes and repairs milkshake machines…”

There are dozens, scores of such companies. Which one is a monopoly?

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Had been a long time since I read about it, first thing that came up in my search (warning: profanity aplenty):

https://gizmodo.com/the-feds-want-to-know-what-the-mcfuck-is-going-on-with-1847601805

More of a right to repair issue with McDonald’s supplier, a company called Taylor.

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Yeah, I'm aware of that. There used to be a website that tracked the broken machines through crowdsourcing.

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Respectfully, you’d find a lot more to like about the new antitrust if you’d look closer. The words “licensing” occurs in upwards of 30 issues of Stoller’s substack last year alone; some of these occurrences are about copyright but plenty are about occupational licensing. More broadly I’m often dismayed by the amount of skepticism toward this movement I see from reasonable people who don’t seem to have looked closely. Khan and Kanter are not trivial people. You don’t start to shift 40 years of jurisprudential lockstep on a central part of the political economy just by being really envious of Google.

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What's so stupid about the current anti-tech Khan, Stroller, et al. view is what has really destroyed our functioning competitive marketplaces is the massive financial consolidation of nearly every industry over the past 20 years. How many industries can you think of that used to have healthy, fragmented 5-10 player spaces that are now down to 2-3 players? How many industries have gone all the way down to functioning duopolies?

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THIS IS LITERALLY THE ENTIRE THESIS OF STOLLER’S BOOK UGH WHAT

…ahem, sorry about that, just continued deep confusion about exactly where a lot of you are getting your impression that the new antitrust movement is largely focused on punishing Big Tech for not being woke enough or something, because it’s sure as hell not in anything any of these people actually write.

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Except it's not. The thesis of Matt's book is monopoly power not the downstream effect of consolidation in previously fragmented industries. The end state of consolidation is a duopoly not a monopoly -- which are much trickier because a duopoly can also increase buyer power in zero sum negotiations (e.g., auto dealership consolidation vs. OEMs.).

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Or you closed the barn door after the horse was gutted, Netscape and Lotus 1-2-3 lying dead in a ditch. Though Gates claims the anti-trust action took Microsoft’s eye off the ball and allowed Google to establish Android when Microsoft had been all over mobile OS work for years and years. I imagine it also factored in to them keeping Apple alive by porting Office over.

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It's not Microsoft's fault that Netscape collapsed; see https://www.joelonsoftware.com/2000/11/20/netscape-goes-bonkers/ and the linked post https://www.joelonsoftware.com/2000/04/06/things-you-should-never-do-part-i/.

(I can't speak to Lotus 1-2-3.)

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Do people really no longer use Facebook? I personally stopped a few years back, but I was under the impression a lot of people still do. Meta's profits seem healthy of late, no? Is that mostly Instagram (I do use that).

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Jan 9Edited

It is still BY FAR the most heavily used social media platform worldwide, with YouTube coming in second. I am fairly aware of this because in my workplace we keep asking if we should expand our social media presence to use other platforms more heavily and/or get rid of Facebook, but then we look at the stats and the number of people with access and FB always crushes the others. Its number of daily active users actually grew in 2023, but it is losing younger people.

There is a difference in HOW people are using it though, with people tending to access FB groups on specific topics more, which is often how we use it at work, and to stay connected with friends and the local community. "Influencers" are leaving it for TikTok and Instagram. It is now considered a more staid platform. If you want to get a lot of followers, FB is not the place to go. If you want to get out information, especially with a low budget and to a targeted geographic area, FB works decently.

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From what people in Congress say about it, that's probably generally true. But there's a whole bunch of non-partisan lawyers at the FTC and DOJ who are in it for the love of the game.

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>non-partisan lawyers

They're political appointees!

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I heard somewhere the Carter Admin punctured Xerox’s balloon by making them divest their patents so companies like Canon could compete with them in photocopiers. Interesting decision there.

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There should be a bonfire of American privilege, where doctors, lawyers, dentists, car dealers and nimby homeowners all give up their feudal rights for the good of the motherland. It could be an American version of August 4, 1789. The real question is, what will it take to unlock that kind of patriotism?

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Bane.

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Framing things as a recreation of the French Revolution seems...ill-advised.

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i don’t think you throw off entrenched interests without upheaval. of course, it would not be worth enduring the wars of the french revolution to reform professional licensure. i’m at a loss for how progress can occur

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"it would not be worth enduring the wars of the french revolution to reform professional licensure"

The problem with the French Revolution wasn't the wars. It was the Terror. Reforming professional licensure isn't worth killing a modern-day Lavoisier either.

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the terror killed 19,000 people. the wars killed far more. if you include the napoleonic wars, we’ll over a million

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The beauty of it is that if you can get a few people paying attention, the dentists don’t actually get any extra votes on their own regulatory regime.

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we should imprison them in the tuileries first. but if they make for varennes or collude with emigres, the cold handshake awaits!

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You should add engineers, architects, and landscape architects. Particularly landscape architects. The idea that a landscape architect does anything that should require their professional license is crazy. Maybe I’m getting out over my skis here and will be hit with “skin cancer” like the Seinfeld episode but if so what is it? What does a landscape architect do that is impactful to the health and safety of the public and therefore needs a professional license? What?

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This is where private certification should come into play. Some might pay a premium for a zen-hydrologist-landscape master- but that needn’t be enforced by law. But fraudulent representation of credentials should be something the government has an interest in addressing

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For sure, there are professional landscape architect organizations and professional planning organizations and that’s all good. But when a local government requires a landscape architect to sign and seal a landscape plan or even worse submit a certified cost estimate than that’s not worth while. We need to have a core value of protecting health and welfare. But when that is perversely used to create markets to help specific professional groups then that’s bad.

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Yes, retaining walls would be a structural engineering function. Geotechnical engineers also provide input to this because soil conditions are an important factor. There are also different kinds of retaining walls. Usually walls under 4-ft or so don’t require a PE. Landscape architects may contribute to aesthetics but that’s not a health and welfare issue.

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Wasn’t August 4 an attempt to get ahead of the “great panic” in which peasants had formed themselves into pitchfork brigades determined to end feudalism from the bottom up? In other words, your noble gesture might require a push from below.

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History might have unfolded very differently if the harvest of 1788 had been more ample.

But, yes, the fear played into August 4, as did the patriotism inspired by the joining of the three orders in defiance of the King, and the i ability of royalist forces to restrain the Parisian mob.

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Are you including yourself in this American Bastille Day?

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yes!

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I mean, liberal democracy is pretty important too, but you’re not wrong.

Moreover, egalitarianism - exemplified by the abolition of the nobility - can be broadly read as a mandate to oppose entrenched forms of economic power such as you describe.

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I take great pride in having never had a single cavity and as such I very much enjoy going to the dentist because they tell me I have great teeth and am doing everything right.

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Oh look at this flosser over here...

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"People who smoke cigarettes say man you don't know how hard it is to quick smoking. Yes I do. Its as hard as it is to start flossing." -Mitch Hedberg

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Another dental practice lacking in evidence for benefit

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I will say that anecdotally flossing makes a huge difference to my apparent gum health, for instance I leave the dentist much less sore than I did before I started flossing regularly. There are other signs too gross to mention in polite company.

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You mean your dentist never found a cavity.

I never had a cavity, either, until I moved to Los Angeles. Some of my dentists there used to find a cavity every other visit or so. Since leaving LA I've never had another cavity.

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What is it about LA? My friend moved there and was told he needed a full set of veneers. He got them and he looked creepy!

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Hi Ben! Apologies for spamming you (and I'm sure that others have reached out by now), but just in case: https://www.slowboring.com/p/monday-mailbag-7a6/comment/46908559

(If Substack allows, delete my post, as well. I don't want to take up space here with moderating requests. Thank you!)

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I was going to do the same, thanks for getting to it before I could due to other tasks I had to catch up on.

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Yeah, a version of this happened to me too. Really underscores how arbitrary a lot of dental treatment is.

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LA is a vain place, and the dentists know it. The movie industry only accepts flawless smiles from actors, and obsession permeates the rest of Angelino society. LA is a place where people go vegan because they're trying to make their skin nicer, not because they care about animals, where they do yoga to get toned physiques rather than for the relaxation and health benefits, and the list goes on. Dentists are in a good position to take advantage of the vanity of Angelinos and the desperation of wannabe actors, so they do so.

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In my case, I never had a cavity until moving to LA. My dentist there found some and then I got some fillings and then those fillings had various problems and had to be replaced a few times over the years. I dealt with a very culture shock-y dentist for several years in Texas (Christian radio playing in the background the whole time) until during the pandemic the practice stayed unmasked. I’ve been very worried about my new dentist back in California, especially when the temporary patch on my fillings that needed replacing wore badly in the few weeks I had it. But since the real replacement happened everything has been fine so far.

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I was like you until I was in my 30s. Still not sure if my first filling was even needed, think I got taken for a ride.

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Floss regularly, floss meaningfully, floss athletically, and above all, never forget who is the boss of you. Me! I am the boss of you! I am the boss of you!...

https://youtu.be/kr1QbNBxj8Q?si=88CLCVKQz1l1n7nI&t=587

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I also never had a cavity into my late 30s and I never flossed. Genetics matter way more than anything else.

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Apparently it isn’t so much your human genetics as much as the lineage of your mouth flora.

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