What If We Allowed Monopolies?

Happy New Year!

I’m sitting at the Sacramento International Airport waiting for my flight and I finally have some time to write. Just before I left for this trip I read this article, in which Jaron Lanier talked about how The Internet was going to destroy the livelihoods of a lot of people. I found the article interesting because it plays directly into some ideas I’ve been mulling over for a long time now.

Two years ago I came across a report that detailed the beginning of the anti-trust and anti-monopoly movement here in the US.  I can’t find that report otherwise I’d link to it, but it described how in the early 1900s meat packers in Chicago used the nation’s railroads to buy livestock in large quantities, ship them in, and then use the concept of Economy of Scale to butcher the animals and sell the finished meat products. Aside from this there was also evidence that five of the largest meat packing companies colluded to manipulate markets, restrict the flow of foods, and control retail prices.

Local farmers and butchers all over the US were being driven out of business and suspected the large meat packers were engaging in price fixing. They feared the plan was to drive them out of business, at which point the larger companies could raise prices and price gouge everyone. A Congressional investigation looked into the industry and did find evidence of these activities, and that lead to anti-monopoly and anti-trust laws being passed, including the Packers and Stockyards Act.

Local producers were protected for a long time but over the last 50 years we’ve seen the rise of national (and multinational) companies whose economies of scale are continuing to nail the coffin on local producers. There are places where battles are still being fought, but mainly it’s been reduced to a marketing point and a decision based on the personal tastes of the customer (“Buy here and support the little guy”, “Think global, act local”). In the interview above Jaron Lanier is on the side of the little guy, but that’s not going to stop the wheel of progress.

The next step in my thought process came during a talk with my friend Kevin. He and I like to philosophize about business and politics, and into our conversation I brought the topics discussed in the report on monopolies mentioned above. I’ve always found politics interesting and I have a theory I’ve been working on over the years about balance. A few years ago I saw the quote, “They pay me just enough to keep me from quitting; I work just enough to keep them from firing me.” I thought that summed up life so well. People don’t like to talk about class warfare but over and over in human history we see examples where the general populace decide the rich have gotten too rich and a revolution of some type or another takes place to balance the scales. Or there have been times when revolts have come close to boiling over and the upper class managed to keep the lid on it by making concessions.

I am not saying revolution is right – I believe keeping a good balance is of benefit to all income classes. I simply mean there is a balance that must be kept. How you view that balance point depends on which side you’re looking at it from. If you’re one of the upper class you might say it’s like insurance – you have to pay the barbarians enough to keep them from breaking in, killing you, and robbing you. If you’re in the lower classes you might say it’s about getting a fair share of the wealth that the laborers have helped to create for the upper classes. If you’re trying to look at it objectively it’s a tug of war, moving back and forth but neither side winning. You could say the same Invisible Hand that controls markets also has a hand in social markets – and I do believe politics is a social market, not simply dollars and numbers.

I should stop here and say that I consider myself a true moderate. I see benefits in ideas presented by both liberals and conservatives, and indeed this blog entry itself will attempt to balance ideas from both sides. In reading what follows you may think I’m only supporting liberal ideas – but in fact what I’m about to do is ask a question, which is essentially is, “If we as a society agree to allow something that conservatives have been wanting for hundreds of years, can we then balance that socially by making concessions to the liberal side of the equation?”

With this in mind I suggested to my friend that on the surface I have nothing against the concept of a monopoly. Combining economies of scale with technological advances could enable the human race to be so productive that we could provide for the basic humans needs of the whole planet and still have a surplus of time on our hands. But we also need to be aware of reality, and reality is that allowing monopolies creates two problems. The first is greed – those in control of the mechanism that collects the products of the laborers will be tempted to take an increasing portion of those profits for themselves. The second is the problem of idle hands (here I pick a random number for the sake of argument) – if we can care for the needs of the whole world using only the first four months of the year … then what do we do for the other two thirds of the year?

I believe the first problem – greed of the upper classes – is the concern that would be raised by liberals, and it can be kept in check by the same method used to discover and eliminate fraud in the lower classes – auditing. Some would say we’re already doing auditing, but the problem is that there’s a lot of self-auditing. Auditors may not be employees of the same people being audited, but the owners of the two companies may be friends (or friends of friends) and that closeness leaves room for fraud. I’m sure my conservative friends will balk at this, but I believe the problem can be solved by a combination of more auditors, better training, better auditing processes, and a constant rotation of who audits whom. This is a topic that could deserve its own full discussion and I’d rather give that its own blog entry, so let’s move on.

I believe the second problem – the surplus in a society’s labor potential – is the concern that would be raised by conservatives, and it can be handled in a number of ways. One possible answer would be to have people work a primary job for 4 months, a secondary job for 4 months, and then have 4 months off. Encouraging people to engage in two (possibly very different) careers often inspires people to apply ideas from one discipline to another, and these new applications of already known concepts further our development and ability to solve problems. The other benefit is that if a disaster were to strike one area of the country it might be more likely that we’d retain the necessary skills and abilities to produce items our society requires.

That leaves the idea of having four months of personal time. Obviously that number is a complete guess, it could be two months, or three. My point is that maybe monopolies and technology might get us to a point where we could all benefit from it to a much greater extent than we do from the current status quo. Who knows how much better our world could be if everyone had that much time to spend with their families, to create art, to invent.

I can hear the responses my conservative friends would give: “Why take that much time off? Why not use that time to be even more productive? Wouldn’t everyone just slack off?” There are some people who’d work 80 hours a week because they choose to and some who’d only work 40 hours a month. My conservative friends would argue they’re carrying the weight of the slackers.  My thoughts return to the concept of balance I’ve described above.  I can’t help but wonder…

There was a time where I found myself unemployed and I needed to regain a certain industry certification before I could start looking for work again. My grandmother taught me to be frugal and I’d spent years working two jobs and saving all my money. I had the savings put aside, and I wanted an extended vacation, so I took one. All total I was unemployed for eight months (on my own dime, not a penny of public assistance).

I didn’t spend all that time completely unproductive. I did some traveling and caught up with friends and family I hadn’t seen in years. I worked around the house. I worked on personal projects. I built things. I wrote. After all that then I also studied, passed my certification, and got back to work. I suspect the majority of the people in the world would also produce. Yes there will always be some percentage of the world’s population that will leech, but my gut tells me the rest of the population will always outweigh them.

In the last fifteen years The Internet has brought together all kinds of people and allowed coalitions of entire groups that before were disparate. The nerds, geeks, hackers, gamers, goths, and LGBT persons – who used to be relatively small numbers in terms of local populations – now interact globally on the scale of millions. The emergence of social networking has enabled them to meet, support one another, and grow – not just as individuals, but as powerful segments of society, and more than that, as functioning parts of our society as a whole.

To be sure, The Internet has enabled destructive elements of society to connect too. Pedophiles, potential serial killers, terrorists, abusers, and people who simply find pleasure in trolling have learned how to network. And yet our society grows. Through all the wreckage on the international stage or on the personal scale, through all the negative things the human race has done … the world’s population grows. Art and Technology get better by leaps and bounds.

I cannot believe this is only because of a relative few who think they’ve been “managers”, driving people to work 40-80 hours a week. There are good leaders who enable others to work smoother and better than they otherwise could, and some who make things worse, and we overcome those too. I believe it’s in our blood, that as a species we lean more towards creation than depletion, and given the opportunity we’d use that time to make our societies better.  Maybe not better in terms of producing more quantifiable items and products, but better in social terms.

As I said, the last few paragraphs support some liberal ideas, but that’s because I believe in balancing the equation. If we allow monopolies then as a society we all not only ought to reap the benefits that would come with that, but that we need to, lest the balance slide too far and revolutions become attractive.

I’m curious to hear the ideas of others, so feel free to comment below.  If you think you see a flaw in my thinking go ahead and point it out – but then try to come up with a solution and offer it. If this could work, how?  If your response is too long for the comment box write up your own blog and post the link below.

Edit: Almost forgot one thing I wanted to say.  One part of Jaron Lanier’s interview reminded me about how we’re gradually improving our efficiencies.  The case of artists whose works are being duplicated is a tricky topic – again, that’s enough to take up another blog post – but when he brought up the case of online translators taking away the jobs of people who do translation for income that one’s an interesting topic for me.

For a moment let’s ignore programs like Google Translate or Babelfish, and just pretend that Google can link me to a website where someone’s already posted a translation of some document I want translated.  Prior to Google indexing that page for searches I would’ve had to find a friend who speaks that language and ask them to translate it for me.  Whether I paid them or not let’s just think about the time required on my part and theirs – because Google enables me to find work that was already done that now frees up both myself and my friend to work on other things.

This is why I don’t see any point in trying to stop The Internet from sharing information.  More than anything else, what’s happening is it’s freeing the human population from having to reinvent the wheel over and over and over.  As I mentioned above, the question becomes: What are we to do with the extra time we now have?

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2 responses to “What If We Allowed Monopolies?

  1. Monopolies would be great if they did not take destructive measures against their opponents. In that case, the monopolies could collaborate with their competition to bring everyone up. Coopoly, anyone?

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