Insights Into Tomorrow Episode: 13 “Modern Monopolies”

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Today we’re discussing monopolies in the modern age. We’ll understand what a monopoly is, how they operate and why they are detrimental to a free and open market, yet they are a unique product of capitalism. We’ll take a brief look at the history of monopolies in American and how they’ve been handled before we look to the future with today’s monopolies and the complications inherent in regulating them.

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Show Notes

[INTRO THEME]

  • [INTRODUCTIONS] (3-5 minutes)
    • Show introduction:
      • Insights Into Tomorrow Episode: 13  “Modern Monopolies”
    • Host introductions
      • Host (Joseph Whalen)
      • My co-host (Sam Whalen)
  • [SUMMARY]
    • Today we’re discussing monopolies in the modern age.We’ll understand what a monopoly is, how they operate and why they are detrimental to a free and open market, yet they are a unique product of capitalism. We’ll take a brief look at the history of monopolies in American and how they’ve been handled before we look to the future with today’s monopolies and the complications inherent in regulating them.

Summary

[TRANSITION]

[SEGMENT 1: Topic Introduction/Episode Premise] (5-10 minutes)

What is a monopoly?

https://www.investopedia.com/terms/m/monopoly.asp

https://bit.ly/3fohfrC

  • A monopoly refers to when a company and its product offerings dominate a sector or industry. 
  • Monopolies can be considered an extreme result of free-market capitalism in that, absent any restriction or restraints, a single company or group becomes large enough to own all or nearly all of the market (goods, supplies, commodities, infrastructure, and assets) for a particular type of product or service. 
  • The term monopoly is often used to describe an entity that has total or near-total control of a market.
  • Natural monopolies can exist when there are high barriers to entry; a company has a patent on their products, or is allowed by governments to provide essential services.

Understanding Monopoly

  • A monopoly is characterized by the absence of competition, which can lead to high costs for consumers, inferior products and services, and corrupt behavior. 
  • A company that dominates a business sector or industry can use that dominance to its advantage, and at the expense of others. 
  • It can create artificial scarcities, fix prices, and circumvent natural laws of supply and demand. 
  • It can impede new entrants into the field, discriminate and inhibit experimentation or new product development, while the public—robbed of the recourse of using a competitor—is at its mercy. 
  • A monopolized market often becomes an unfair, unequal, and inefficient.
  • Mergers and acquisitions among companies in the same business are highly regulated and researched for this reason. 
  • Firms are typically forced to divest assets if federal authorities believe a proposed merger or takeover will violate anti-monopoly laws. 
  • By divesting assets, it allows competitors to enter the market by those assets, which can include plant and equipment and customers.
  • Monopolies typically have an unfair advantage over their competition since they are either the only provider of a product or control most of the market share or customers for their product. 
  • Although monopolies might differ from industry-to-industry, they tend to share similar characteristics that include:
    • High barriers of entry: 
      • Competitors are not able to enter the market, and the monopoly can easily prevent competition from developing their foothold in an industry by acquiring the competition.
    • Single seller: 
      • There is only one seller in the market, meaning the company becomes the same as the industry it serves.
    • Price maker: 
      • The company that operates the monopoly decides the price of the product that it will sell without any competition keeping their prices in check. 
      • As a result, monopolies can raise prices at will.
    • Economies of scale: 
      • A monopoly often can produce at a lower cost than smaller companies. 
      • Monopolies can buy huge quantities of inventory, for example, usually a volume discount. 
      • As a result, a monopoly can lower its prices so much that smaller competitors can’t survive. 
      • Essentially, monopolies can engage in price wars due to their scale of their manufacturing and distribution networks such as warehousing and shipping, that can be done at lower costs than any of the competitors in the industry.

Natural Monopoly

  • A natural monopoly can develop when a company becomes a monopoly due to high fixed or start-up costs in an industry. 
  • Also, natural monopolies can arise in industries that require unique raw materials, technology, or it’s a specialized industry where only one company can meet the needs.
  • Companies that have patents on their products, which prevents competition from developing the same product in a specific field can have a natural monopoly. 
    • Patents allow the company to earn a profit for several years without fear of competition to help recoup the investment, high start-up, and research and development (R&D) costs that the company incurred. 
    • Pharmaceutical or drug companies are often allowed patents and a natural monopoly to promote innovation and research.
  • There are also public monopolies set up by governments to provide essential services and goods, such as the U.S. Postal Service (though of course, the USPS has less of a monopoly on mail delivery since the advent of private carriers like United Parcel Service and FedEx). 
  • The utilities industry is where natural or government-allowed monopolies flourish. Usually, there is only one major (private) company supplying energy or water in a region or municipality. 
  • The monopoly is allowed because these suppliers incur large costs in producing power or water and providing these essentials to each local household and business, and it is considered more efficient for there to be a sole provider of these services.

[AD1: SSE]

[SEGMENT 2: Historical background/Symptoms and signs] (10-15 minutes)
 

Antitrust Laws

  • Antitrust laws and regulations are put in place to discourage monopolistic operations— protecting consumers, prohibiting practices that restrain trade, and ensuring a marketplace remains open and competitive.
  • In 1890, the Sherman Antitrust Act became the first legislation passed by the U.S. Congress to limit monopolies. 
  • The Sherman Antitrust Act had strong support by Congress, passing the Senate with a vote of 51 to 1 and passing the House of Representatives unanimously 242 to 0
  • In 1914, two additional antitrust pieces of legislation were passed to help protect consumers and prevent monopolies. 
  • The Clayton Antitrust Act created new rules for mergers and corporate directors, and also listed specific examples of practices that would violate the Sherman Act. 
  • The Federal Trade Commission Act created the Federal Trade Commission (FTC), which sets standards for business practices and enforces the two antitrust acts, along with the Antitrust Division of the United States Department of Justice.
  • The laws are intended to preserve competition and allow smaller companies to enter a market, and not to merely suppress strong companies.

Breaking Up Monopolies

  • The Sherman Antitrust Act has been used to break up large companies over the years, including Standard Oil Company and American Tobacco Company.
  • In 1994, the U.S. government accused Microsoft of using its significant market share in the PC operating systems business to prevent competition and maintain a monopoly. 
  • The complaint, filed on July 15, 1994, stated that 
    • “The United States of America, acting under the direction of the Attorney General of the United States, brings this civil action to prevent and restrain the defendant Microsoft Corporation from using exclusionary and anticompetitive contracts to market its personal computer operating system software. By these contracts, Microsoft has unlawfully maintained its monopoly of personal computer operating systems and has an unreasonably restrained trade.” 
  • A federal district judge ruled in 1998 that Microsoft was to be broken into two technology companies, but the decision was later reversed on appeal by a higher court. 
  • The controversial outcome was that, despite a few changes, Microsoft was free to maintain its operating system, application development, and marketing methods.
  • The most prominent monopoly breakup in U.S. history was that of AT&T. 
  • After being allowed to control the nation’s telephone service for decades, as a government-supported monopoly, the giant telecommunications company found itself challenged under antitrust laws. 
  • In 1982, after an eight-year court battle, AT&T had to divest itself of 22 local exchange service companies, and it has been forced to sell off assets or split units several times since.

[AD2: Teens] (1 minute)

[SEGMENT 3: The Future/Solutions to the issues] (10-15 minutes)

America’s Modern Day Monopoly Problem

https://www.forbes.com/sites/johnmauldin/2019/04/11/america-has-a-monopoly-problem/?sh=20694aa92972

https://bit.ly/3okQ8BK

  • Without realizing it, we’ve become a nation of monopolies. 
  • A large and growing part of our economy is “owned” by a handful of companies that face little competition.
  • They have no incentive to deliver better products or to get more efficient. They simply rake in cash from people who have no choice but to hand it over.
  • This would be impossible if we had true capitalism.
  • Even if we admit some businesses are natural monopolies, most aren’t. Most of them found some non-capitalistic flaw to exploit.
  • In theory, this problem should solve itself as technology and consumer preferences change 
  • Yet it isn’t happening 
  • Axios outlined the problem in a recent article on farm bankruptcies.
  • Three companies control about 80% of mobile telecoms. 
  • Three have 95% of credit cards. 
  • Four have 70% of airline flights within the U.S. 
  • Google handles 60% of search. 
  • In agriculture, four companies control 66% of U.S. hogs slaughtered in 2015, 85% of the steer, and half the chickens, according to the Department of Agriculture
  • Similarly, just four companies control 85% of U.S. corn seed sales, up from 60% in 2000, and 75% of soy bean seed, a jump from about half, the Agriculture Department says. 

Gummed-Up Economy

  • Some economists say this concentration of market power is gumming up the economy and is largely to blame for decades of flat wages and weak productivity growth.
  • “Gumming up the economy” is a good way to describe it
    • Competition is an economic lubricant
    • The machine works more efficiently when all the parts move freely
    • We get more output from the same input, or the same output with less input
    • Take away competition and it all begins to grind together
    • Eventually friction brings it to a halt… sometimes a fiery one.
  • Normally, companies grow their profits by delivering better products at lower prices than their competitors. 
  • It is a dynamic process with competitors constantly dropping out and new ones appearing.
  • This has been described as “creative destruction,” which sounds harsh but it’s absolutely necessary for economic growth.
  • Today, the creative destruction isn’t happening. 
  • And as companies refuse to die and monopolies refuse to improve, we struggle to generate even mild economic growth.

Uncreative Destruction

  • Creative destruction means companies go out of business and workers lose their jobs. 
  • Maybe a new competitor will hire them eventually, but they suffer in the meantime.
  • Politicians try to help but finding the right balance is hard.
  • Greater blame should be assigned to the central bankers, not just the Fed but its peers as well. 
  • For whatever reason, they kept short-term stimulus measures and near zero rates for far too long
  • The resulting flood of capital bypassed the creative destruction process
  • A lot of this happens under the radar
  • You’ve probably seen stories about the Lyft IPO and other unicorns that will soon go public
  • This is news because it’s now so unusual
  • The number of listed companies is shrinking because (a) cheap capital lets them stay private longer and (b) the founders and VCs often “exit” by selling to a larger, cash-flush competitor instead of going public
  • An economy in which it is easier and cheaper to buy your competitors rather than out-innovate them is probably headed toward stagnation.

[AD3: Entertainment] (1 minute)

[SEGMENT 4: The Future/Solutions to the issues] (10-15 minutes)

Regulating Today’s Monopolies for Tomorrow’s Market

  • When the global financial crisis slowly subsided in the spring of 2010, tech giants Google, Apple, Facebook and Amazon (GAFA) were collectively valued at just under 450 billion euros by market cap. 
  • These companies were drivers of innovation that pointed the way forward, enterprises at the center of a flourishing technological ecosystem with a creative and technology-driven vision.
  • Over the past decade, the transformation of society’s relationship to these companies is unprecedented. 
  • We use the products of these companies to manage almost our entire professional and private lives. 
  • And during the coronavirus crisis, the value of the tech giants have increased even more. 
  • These companies, taken together, currently have a market capitalization of 6 trillion euros, which is about five times as much as the entire German DAX index.
  • The dominance of these companies has become so great that individual governments have no choice but to submit themselves to them
  • Google and Apple dictated the interface for the Corona app, not the other way around. When Australia wanted to introduce a new law on fair remuneration for its publishing houses, Google unashamedly threatened to switch off its search engine in the country
  • It seems that many German and European politicians have given in to the superior power of these companies. 
    • Complicated regulatory issues are not very attractive election campaign topics
    • This powerlessness is also reflected in the practically nonexistent media debate
  • Never before in the history of our continent have so few companies possessed so much power — never before were they able to exert such a profound influence on our lives

Tomorrows Monopolies

  • How we handle the US tech monopolies will well dictate Europe’s future
  • Even if it seems almost unimaginable – the technological revolution is not yet over. 
  • Quite the opposite is true
  • We are still in the early phases
  • If we want, we can still make the rules that will shape our future. 
  • But the room for the maneuvering needed to do this is shrinking, and time is running out. 
  • If we want to know what to do next, then it is vital that we gain an in-depth understanding of the mechanisms by which the tech monopolies operate.

How Tech Monopolies are Different

  • The tech monopolies survive on data, algorithms, and capital
  • In the 20th century, a company’s wealth came from its factories, machines, and its qualified employees. 
  • The problem is that the digital world functions completely differently.
  • In the digital world customer behavior is evaluated in real time. 
  • This allows digital services to be continuously improved and aligned precisely to customer needs and desires. 
  • The more data is collected, the better the algorithms work and the more relevant the offers presented to customers become
  • Over the past decade, the big tech companies have built a huge competitive advantage because they control the operating systems, the search engines, the browsers, and the cloud infrastructure
  • They also own the shopping marketplaces, the communication platforms, the networked household appliances, and the app stores
  • To return to our picture of the 20th century, the tech monopolies not only have factories and machines, they also increasingly own the entire infrastructure of the value-creation chain, including all the businesses and all of the communication channels to the customer
  • With every new customer, this value-creation chain becomes more efficient and more profitable
  • Competition in the big tech infrastructure is only allowed for as long as the competitor compensates the monopolist or helps the monopolist towards even more expansive growth
  • The capital that the big tech companies suck out of the system using this mechanism is fed straight back into undermining the competition or accessing new areas of business
    • The vendors on Amazon’s marketplace are just as dependent on the goodwill of the platform as media companies are on Google or Facebook
    • This goodwill can only be acquired by consistently providing access to all content and data, thus continuing to feed the monopoly and making it more efficient.
  • The enormous profitability of these infrastructure services allows the big tech companies to invest in new fields of business on a very long-term basis
  • To do this, the monopolists are willing to accept high losses for many years in order to weaken the competition and build up market shares
  • Due to the enormous market capitalization of the big tech companies, it is necessary for them to continue to occupy large and lucrative markets to keep the expansive system going and to increase their stock market price

The Future of Monopolies (general discussion)

  • Technology moves faster than legislation
  • Today’s monopolies are more complicated and railroads and telephones
  • There’s more of an international impact from today’s monopolies than ever before
  • We have international organization (WTO, EU, etc.) that might look to constrain the power of monopolies
  • Traditional penalties (fines) are insignificant to corporate entities that have economies larger than some countries
  • The economic impact of arresting the expansion of some big tech firms has significant disadvantages, especially on a global scale
  • Governments benefit too much from today’s monopolies

[OUTRO AND CREDITS]

Transcription

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[Music]

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insightful podcasts

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by informative hosts

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insights into things a podcast network

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[Music]

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[Applause]

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welcome to insights into tomorrow where

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we take a deeper

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look into how the issues of today will

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impact the world of tomorrow

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from politics and world news to media

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and technology

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we discuss how today’s headlines are

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becoming tomorrow’s reality

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welcome to insights into tomorrow this

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is episode 13

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modern monopolies i’m your host joseph

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whelan

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and my co-host samwell how you doing

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today sam doing okay how you doing

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doing all right so today’s topic is one

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that we’ve

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kind of been tossing around for a little

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while now and uh it’s

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in the news a lot lately with a lot of

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the tech companies and

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politics involved it became

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kind of came to the forefront a few

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months back during the

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trump administration uh they were

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kind of going up against some of the big

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tech companies facebook amazon

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google and so forth so i thought it was

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worthwhile to sort of take a look at

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this so

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today we’re going to discuss what

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monopolies are in the modern age

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we’ll understand what a monopoly is how

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they operate and why they’re determined

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why they’re detrimental to a free and

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open market yet their unique

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a unique product of capitalism we’ll

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take a brief look

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at the history of monopolies in america

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and how they’ve been handled before and

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we’ll look at the future of what today’s

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monopolies

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and the complications inherent in

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regulating them are

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ready to get started yep all right so

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what

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is a monopoly so when doing research for

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today’s episode i went to a couple

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different sites and and this definition

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i think captured it best it came from

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investopedia.com

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they say monopoly refers to when a

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company and its product offerings

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dominate a sector or industry monopolies

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can be considered

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an extreme result of free market

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capitalism in that absent any

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restrictions or restraints

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a single company or group becomes large

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enough to own

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all or nearly all the market goods

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supplies commodities infrastructure so

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forth

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for a particular type of product or

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service

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the term monopoly is often used to

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describe an entity

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that has total or near control of a

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market

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natural monopolies can exist where there

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are high barriers to entry

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a company has a parent on their a patent

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on their products or is allowed by

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governments to provide essential

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services so based on that definition

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let me ask you real quick do you think

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we have modern monopolies that

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fit this bill yeah definitely i mean i

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don’t think it takes that long to figure

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it out

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there’s like three drug stores that’s

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the first one that came to mind for me

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like if you think about it right

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uh writing walgreens and cbs um that’s

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just an example

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airlines too like if you just i don’t

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know i feel like if you just think about

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it there’s

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there’s pretty clear examples of at

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least a handful sure yeah

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so in understanding a monopoly

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a monopoly is characterized by the

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absence of competition

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which can lead to high costs for

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consumers inferior products and services

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and corrupt behavior a company that

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dominates a business sector or industry

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can

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use that dominance to its advantage

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and at the expense of others so taking

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your example of the drug stores

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if if there are three drug stores that

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control all the pharmaceuticals

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to consumers is that really a monopoly

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if there’s three of them

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uh i think it’s a monopoly if by their

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being three and they’re being so

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established that it

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eliminates the ability for other new

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drugstores to rise up i think that’s

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where you get into the

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monopoly territory if they’re creating

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that barrier of entry

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so it’s it’s in that case it’s a

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monopoly of three where they’re

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colluding to prevent competition at that

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point in time essentially yeah

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potentially yeah

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they also say that it can create

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artificial scarcities

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fixed prices and circumvent natural laws

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of supply and demand which i think is

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exactly where your pharmacy

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scenario falls into place it can impede

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new entrants into the field

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discriminate and inhibit experimentation

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on

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or new product development while the

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public robbed of the recourse of using a

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competitor

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is at its mercy do you think again

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sticking with our pharmacy

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example do you think that

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the consumers are

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at a detriment because of having three

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major pharmacies control the entire

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industry

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uh i’m not so sure about that because i

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mean the medication

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is still as long as the medication’s

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effective from pharmacy to pharmacy

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that’s the important thing

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i mean it’s not like you’re getting like

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faulty products now if say for example

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walgreens

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had their over-the-counter allergy

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medication

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and it was defective but there’s only

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walgreens in your area that’s where you

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run into some issues but i think as long

0:05:48.320,0:05:50.560
as the products are still working then i

0:05:49.840,0:05:53.280
mean

0:05:50.560,0:05:54.479
monopolies are still generally bad but i

0:05:53.280,0:05:55.520
think in that example you could probably

0:05:54.479,0:05:57.919
get away with it

0:05:55.520,0:06:00.000
well how about an example where you’ve

0:05:57.919,0:06:03.360
got three pharmacies

0:06:00.000,0:06:04.400
and they all decide that instead of

0:06:03.360,0:06:07.759
selling

0:06:04.400,0:06:11.440
a your allergy medicine to you

0:06:07.759,0:06:14.319
at 20 over cost you know with a

0:06:11.440,0:06:15.919
20 margin they’re gonna up at the 50

0:06:14.319,0:06:17.280
they’re all going to sell for 50

0:06:15.919,0:06:20.080
so there’s no one in the market that

0:06:17.280,0:06:21.840
they can that the consumer can go to

0:06:20.080,0:06:24.000
to get it at that reduced price do you

0:06:21.840,0:06:25.199
think that would be monopolistic

0:06:24.000,0:06:27.759
yeah definitely because at that point

0:06:25.199,0:06:30.880
they’re using their their

0:06:27.759,0:06:32.560
hold on the industry to screw over the

0:06:30.880,0:06:32.960
customer which is where you get into

0:06:32.560,0:06:35.039
like

0:06:32.960,0:06:36.080
the definition of monopolies exactly

0:06:35.039,0:06:38.080
yeah

0:06:36.080,0:06:39.199
so they go on to say that a monopolized

0:06:38.080,0:06:42.560
market

0:06:39.199,0:06:44.960
often becomes an unfair unequal and

0:06:42.560,0:06:46.880
inefficient market mergers and

0:06:44.960,0:06:47.360
acquisitions among companies in the same

0:06:46.880,0:06:50.160
business

0:06:47.360,0:06:51.280
are highly regulated and researched for

0:06:50.160,0:06:53.520
this reason

0:06:51.280,0:06:55.919
firms are typically forced to divest

0:06:53.520,0:06:58.240
assets if federal authorities believe

0:06:55.919,0:07:00.800
proposed mergers or a takeover will

0:06:58.240,0:07:03.280
violate anti-monopoly laws

0:07:00.800,0:07:05.440
we just had a major takeover very

0:07:03.280,0:07:09.280
recently among the cellular carriers

0:07:05.440,0:07:11.840
oh yeah where t-mobile bought out sprint

0:07:09.280,0:07:13.360
so we had four major competitors in the

0:07:11.840,0:07:15.039
market

0:07:13.360,0:07:16.880
t-mobile brought out sprint to become

0:07:15.039,0:07:20.240
the number two

0:07:16.880,0:07:23.039
in consumer size at that point in time

0:07:20.240,0:07:24.240
and to reduce the market down from four

0:07:23.039,0:07:25.759
to three

0:07:24.240,0:07:28.240
at the same time one of the

0:07:25.759,0:07:32.240
contingencies associated with that

0:07:28.240,0:07:35.039
was the emergence of another network

0:07:32.240,0:07:36.560
that would come out eventually which it

0:07:35.039,0:07:38.160
hasn’t come out yet

0:07:36.560,0:07:40.479
i think it’s dish is going to be running

0:07:38.160,0:07:41.520
this particular network

0:07:40.479,0:07:43.759
but they’re going to be using the

0:07:41.520,0:07:47.120
services of the existing networks

0:07:43.759,0:07:49.280
so it’s almost like it was a

0:07:47.120,0:07:51.120
fictional way of putting a fourth

0:07:49.280,0:07:53.840
competitor into the market

0:07:51.120,0:07:54.639
like a puppet competitor almost exactly

0:07:53.840,0:07:57.039
so

0:07:54.639,0:07:59.199
in that instance do you think the

0:07:57.039,0:08:02.160
t-mobile merger would sprint

0:07:59.199,0:08:02.720
will be good or bad for consumers i

0:08:02.160,0:08:04.400
think

0:08:02.720,0:08:06.080
i don’t know i think about this with

0:08:04.400,0:08:07.599
with mobile companies especially like

0:08:06.080,0:08:09.360
there’s whole regions of the country

0:08:07.599,0:08:11.199
where you can only get one mobile

0:08:09.360,0:08:12.000
service provider and i think by merging

0:08:11.199,0:08:13.120
like that it’s going to make that

0:08:12.000,0:08:15.599
problem even worse

0:08:13.120,0:08:16.720
so say you you’re i know in this area

0:08:15.599,0:08:18.000
that’s it’s kind of like that with

0:08:16.720,0:08:18.720
t-mobile if you’re forced to have

0:08:18.000,0:08:21.280
t-mobile

0:08:18.720,0:08:22.479
and now sprint but the coverage is poor

0:08:21.280,0:08:24.000
and you don’t have any other option i

0:08:22.479,0:08:24.560
think that’s that’s definitely an issue

0:08:24.000,0:08:25.520
yeah

0:08:24.560,0:08:26.879
it’s because you’re getting you’re

0:08:25.520,0:08:27.919
forced to have an inferior product just

0:08:26.879,0:08:31.360
due to the monopoly

0:08:27.919,0:08:33.680
right and there’s no incentive for them

0:08:31.360,0:08:35.120
to improve their product because there’s

0:08:33.680,0:08:36.399
no competition right and what are you

0:08:35.120,0:08:37.760
going to do move

0:08:36.399,0:08:40.399
exactly you’re not going to move because

0:08:37.760,0:08:42.320
you’re a cellular carrier exactly

0:08:40.399,0:08:43.519
so they see monopolies typically have an

0:08:42.320,0:08:46.000
unfair advantage

0:08:43.519,0:08:47.600
over their competition since they’re

0:08:46.000,0:08:49.920
either the only provider

0:08:47.600,0:08:51.760
of a product or control most of the

0:08:49.920,0:08:54.240
market share or customers

0:08:51.760,0:08:56.800
for their product although monopolies

0:08:54.240,0:08:58.160
might differ from industry to industry

0:08:56.800,0:09:00.160
they tend to share similar

0:08:58.160,0:09:01.920
characteristics why don’t you tell us

0:09:00.160,0:09:03.360
what these characteristics are

0:09:01.920,0:09:04.800
sure so the first one is the high

0:09:03.360,0:09:05.760
barrier of entry which we kind of talked

0:09:04.800,0:09:07.440
about already

0:09:05.760,0:09:09.279
this is when competitors are not able to

0:09:07.440,0:09:10.880
enter the market and the monopoly can

0:09:09.279,0:09:12.959
easily prevent competition from

0:09:10.880,0:09:15.279
developing their foothold in an industry

0:09:12.959,0:09:16.880
by acquiring that competition uh sort of

0:09:15.279,0:09:18.240
like we talked about with the mobile

0:09:16.880,0:09:20.080
company where they put i guess not

0:09:18.240,0:09:21.839
really because they kind of let them use

0:09:20.080,0:09:24.480
their own services

0:09:21.839,0:09:25.839
the second example is the single seller

0:09:24.480,0:09:27.360
there’s only one seller in the market

0:09:25.839,0:09:29.200
meaning the company becomes the same as

0:09:27.360,0:09:31.360
the industry it serves

0:09:29.200,0:09:32.959
the third is price maker the company

0:09:31.360,0:09:34.080
that operates the monopoly decides the

0:09:32.959,0:09:35.279
price of the product

0:09:34.080,0:09:36.800
that it will sell without any

0:09:35.279,0:09:37.760
competition keeping their prices in

0:09:36.800,0:09:39.519
check

0:09:37.760,0:09:41.040
as a result of this monopolies can raise

0:09:39.519,0:09:43.519
prices whenever they want

0:09:41.040,0:09:45.519
and finally the economy of scale a

0:09:43.519,0:09:46.880
monopoly often can produce at a lower

0:09:45.519,0:09:48.480
cost in smaller companies

0:09:46.880,0:09:50.000
monopolies can buy huge quantities of

0:09:48.480,0:09:52.399
inventory for example

0:09:50.000,0:09:53.360
usually at a volume discount as a result

0:09:52.399,0:09:55.120
of this

0:09:53.360,0:09:56.800
monopoly can lower its prices so much

0:09:55.120,0:09:57.360
that smaller competitors can survive

0:09:56.800,0:10:00.320
think like

0:09:57.360,0:10:01.680
walmart essentially monopolies can

0:10:00.320,0:10:02.640
engage in price wars

0:10:01.680,0:10:04.240
due to their scale of their

0:10:02.640,0:10:06.000
manufacturing and distribution networks

0:10:04.240,0:10:07.440
such as warehousing and shipping

0:10:06.000,0:10:09.040
uh that can be done at lower costs than

0:10:07.440,0:10:12.079
any of the competitors in the industry

0:10:09.040,0:10:13.839
i guess that’d be amazon too

0:10:12.079,0:10:15.760
so it’s interesting because some of

0:10:13.839,0:10:16.160
these same practices they talk about

0:10:15.760,0:10:19.839
here

0:10:16.160,0:10:23.279
that are considered to be monopolistic

0:10:19.839,0:10:26.320
are also ones that are generally used in

0:10:23.279,0:10:28.480
business for efficiency reasons

0:10:26.320,0:10:30.399
uh for instance here in new jersey we

0:10:28.480,0:10:33.600
have a lot of cranberry

0:10:30.399,0:10:35.920
producers in the in the state and one of

0:10:33.600,0:10:37.760
the things that you have is you have

0:10:35.920,0:10:39.920
everyone’s heard of ocean spray right

0:10:37.760,0:10:41.760
you buy ocean spray cranberry juice off

0:10:39.920,0:10:44.399
the shelves and and whatnot

0:10:41.760,0:10:45.519
ocean spray is actually a cooperative

0:10:44.399,0:10:48.320
and what they do

0:10:45.519,0:10:49.200
is they partner with a number of

0:10:48.320,0:10:53.680
independent

0:10:49.200,0:10:55.680
farmers to pool their resources

0:10:53.680,0:10:57.519
and it’s not just cranberries obviously

0:10:55.680,0:10:59.519
it’s it’s many other things

0:10:57.519,0:11:02.959
but they pull their resources together

0:10:59.519,0:11:06.160
and sell as one single entity

0:11:02.959,0:11:09.200
so they can get advantages

0:11:06.160,0:11:11.040
in the economy to scale by supplying all

0:11:09.200,0:11:13.920
their

0:11:11.040,0:11:16.399
entities at the same time for a grow

0:11:13.920,0:11:20.079
bulk cost

0:11:16.399,0:11:21.920
they’re sort of fixing their prices by

0:11:20.079,0:11:23.760
not competing against each other they

0:11:21.920,0:11:25.279
all agree upon a certain price that they

0:11:23.760,0:11:27.360
sell at

0:11:25.279,0:11:29.839
but somehow the cooperatives aren’t

0:11:27.360,0:11:31.839
targeted for monopolies

0:11:29.839,0:11:33.279
even though they take on some of the

0:11:31.839,0:11:36.800
same

0:11:33.279,0:11:38.399
characteristics of a monopoly

0:11:36.800,0:11:40.240
this has happened traditionally in the

0:11:38.399,0:11:41.279
past with a lot of food industries have

0:11:40.240,0:11:43.279
done this

0:11:41.279,0:11:44.880
a lot of your fast food places when they

0:11:43.279,0:11:47.839
go through franchising they do sort of

0:11:44.880,0:11:51.519
the same thing you buy a franchise of

0:11:47.839,0:11:54.639
a pizza place uh you know papa john’s or

0:11:51.519,0:11:55.519
or um i can’t think of another dunkin

0:11:54.639,0:11:57.120
donuts

0:11:55.519,0:11:59.760
that would not be pizza but sure we’ll

0:11:57.120,0:12:00.880
use that as a franchise

0:11:59.760,0:12:03.200
that’s the first thing i think i think

0:12:00.880,0:12:03.760
franchise but yeah that’s another good

0:12:03.200,0:12:07.360
example

0:12:03.760,0:12:10.800
of you have a whole bunch of people that

0:12:07.360,0:12:12.240
buy the stores buy the franchise where

0:12:10.800,0:12:14.079
they have the rights but they also get

0:12:12.240,0:12:17.440
all their supplies that way

0:12:14.079,0:12:19.120
so instead of you know mom and pop down

0:12:17.440,0:12:20.800
the street going out and buying flour to

0:12:19.120,0:12:22.959
make donuts

0:12:20.800,0:12:24.800
they put their purchase into the

0:12:22.959,0:12:27.360
corporation and the corporation

0:12:24.800,0:12:29.760
buys it for 500 bakers at one time we

0:12:27.360,0:12:32.560
can get a discount on it

0:12:29.760,0:12:33.600
so that’s another thing where cooper

0:12:32.560,0:12:36.240
cooperatives

0:12:33.600,0:12:36.880
can be targeted as monopolies but

0:12:36.240,0:12:40.320
they’re not

0:12:36.880,0:12:42.320
in today’s society so the next thing

0:12:40.320,0:12:45.519
that that we talk about

0:12:42.320,0:12:49.120
is what’s called a natural monopoly

0:12:45.519,0:12:51.120
so a natural monopoly can develop

0:12:49.120,0:12:53.279
when a company becomes a monopoly due to

0:12:51.120,0:12:54.079
high fixed or start-up costs in an

0:12:53.279,0:12:56.160
industry

0:12:54.079,0:12:57.279
this happens a lot with utilities

0:12:56.160,0:12:59.760
internet

0:12:57.279,0:13:01.040
electricity telephone because of the

0:12:59.760,0:13:03.519
amount of money

0:13:01.040,0:13:04.880
that you have to tie up in order to

0:13:03.519,0:13:06.959
provide that service

0:13:04.880,0:13:09.920
the government is willing to allow you

0:13:06.959,0:13:12.639
to become a monopoly

0:13:09.920,0:13:13.839
att at one point in time had so much

0:13:12.639,0:13:16.560
money tied up in

0:13:13.839,0:13:18.320
copper it was like one third of the

0:13:16.560,0:13:20.560
company’s value was in copper

0:13:18.320,0:13:21.839
just in the wires that they had because

0:13:20.560,0:13:25.920
copper is a commodity

0:13:21.839,0:13:27.839
wow also natural monopolies can arise in

0:13:25.920,0:13:28.959
industries that require unique raw

0:13:27.839,0:13:31.200
materials

0:13:28.959,0:13:33.360
technology or it’s a specialized

0:13:31.200,0:13:34.639
industry where only one company can meet

0:13:33.360,0:13:37.760
the needs

0:13:34.639,0:13:40.320
again this goes back to at t

0:13:37.760,0:13:41.440
you know they were bill i guess at the

0:13:40.320,0:13:43.040
time was

0:13:41.440,0:13:45.839
that’s and they wound up getting broken

0:13:43.040,0:13:47.440
up in the early 80s

0:13:45.839,0:13:49.680
companies that have patents on their

0:13:47.440,0:13:51.519
products which prevent competition from

0:13:49.680,0:13:53.040
developing the same product in a

0:13:51.519,0:13:55.839
specific field

0:13:53.040,0:13:56.639
can have a natural monopoly so a lot of

0:13:55.839,0:14:00.000
these things

0:13:56.639,0:14:00.399
here have traditionally been associated

0:14:00.000,0:14:03.519
with

0:14:00.399,0:14:05.199
the utilities sector your television

0:14:03.519,0:14:10.639
your cable your internet

0:14:05.199,0:14:10.639
your um electrical your plumbing

0:14:10.720,0:14:15.279
things that aren’t state-owned but offer

0:14:13.680,0:14:16.399
private services we just ran into an

0:14:15.279,0:14:20.320
incident

0:14:16.399,0:14:24.800
on last week with the

0:14:20.320,0:14:28.959
colonial pipeline where they supply

0:14:24.800,0:14:31.920
a chunk of refined fuels

0:14:28.959,0:14:33.680
to a large sector of the country they’re

0:14:31.920,0:14:35.839
a private company

0:14:33.680,0:14:37.440
but they have a monopoly on that because

0:14:35.839,0:14:39.120
of how expensive it is to build a

0:14:37.440,0:14:41.279
pipeline

0:14:39.120,0:14:43.040
so let me ask you when it comes to

0:14:41.279,0:14:45.920
natural monopolies where

0:14:43.040,0:14:47.360
you have this investment or you own the

0:14:45.920,0:14:50.399
technology

0:14:47.360,0:14:51.839
do you think that justifies monopolistic

0:14:50.399,0:14:53.680
tendencies

0:14:51.839,0:14:55.360
i think uh i think that’s a tough

0:14:53.680,0:14:55.600
question to answer because it reminds me

0:14:55.360,0:14:57.040
of

0:14:55.600,0:14:59.120
when we did our streaming services

0:14:57.040,0:15:00.160
episode we talked about like something

0:14:59.120,0:15:03.760
like comcast

0:15:00.160,0:15:05.680
who’s uh internet and tv and um

0:15:03.760,0:15:07.360
there’s a cell phones and they’re sort

0:15:05.680,0:15:08.959
of expanding in that way too but if

0:15:07.360,0:15:10.639
again kind of like when we talked about

0:15:08.959,0:15:12.079
with the mobile providers if you can

0:15:10.639,0:15:13.680
only have comcast

0:15:12.079,0:15:15.199
but it’s because comcast controls all

0:15:13.680,0:15:17.920
those resources

0:15:15.199,0:15:19.120
is that a bad thing i think it becomes a

0:15:17.920,0:15:20.399
bad thing when

0:15:19.120,0:15:22.320
you’re going back to the inferior

0:15:20.399,0:15:25.519
product thing if your product’s bad

0:15:22.320,0:15:26.880
but you you have this obligation to

0:15:25.519,0:15:28.560
provide the service because you have all

0:15:26.880,0:15:30.639
the resources then i think you also have

0:15:28.560,0:15:33.680
an obligation to make the product

0:15:30.639,0:15:34.399
at least usable consistently well and

0:15:33.680,0:15:37.920
and

0:15:34.399,0:15:39.360
to add to that is if the government is

0:15:37.920,0:15:40.880
going to allow you to be a natural

0:15:39.360,0:15:43.839
monopoly because of that

0:15:40.880,0:15:45.120
technology of that investment then

0:15:43.839,0:15:48.320
there’s a certain right

0:15:45.120,0:15:50.079
that the government has to uh we didn’t

0:15:48.320,0:15:53.440
check the shop beforehand everybody

0:15:50.079,0:15:55.600
no we didn’t just lean a lot that way

0:15:53.440,0:15:57.199
there uh there’s a certain obligation

0:15:55.600,0:15:59.839
that government has

0:15:57.199,0:16:01.360
to regulate you at that point in time as

0:15:59.839,0:16:04.320
an industry

0:16:01.360,0:16:05.759
um do you think that expectation of

0:16:04.320,0:16:06.959
government regulation because a lot of

0:16:05.759,0:16:09.199
the cable companies are trying to get

0:16:06.959,0:16:11.600
away from government regulation

0:16:09.199,0:16:12.880
do you think that expectation that

0:16:11.600,0:16:14.720
governments should have the right to do

0:16:12.880,0:16:17.920
that when they grant a monopoly

0:16:14.720,0:16:20.320
is realistic i think

0:16:17.920,0:16:21.680
maybe not realistic not in these days

0:16:20.320,0:16:22.399
because these companies have so much

0:16:21.680,0:16:24.720
power

0:16:22.399,0:16:25.920
i think it’s idealistic that you know

0:16:24.720,0:16:27.040
ultimately at the end of the day the

0:16:25.920,0:16:29.040
government is going to have their

0:16:27.040,0:16:30.160
the say in in what needs to be regulated

0:16:29.040,0:16:31.839
and what doesn’t but i think we’re

0:16:30.160,0:16:33.440
seeing so often that

0:16:31.839,0:16:35.279
the companies have so much power that

0:16:33.440,0:16:36.639
there’s the government just chooses not

0:16:35.279,0:16:38.240
to do anything

0:16:36.639,0:16:39.600
yeah i think you’re which we’ll get into

0:16:38.240,0:16:41.839
more later yeah i think you’re

0:16:39.600,0:16:44.880
absolutely right on that one

0:16:41.839,0:16:46.639
so there’s public monopolies that are

0:16:44.880,0:16:48.720
set up by the government to provide

0:16:46.639,0:16:50.320
essential services such as the u.s

0:16:48.720,0:16:52.160
postal service

0:16:50.320,0:16:54.480
although the u.s postal service is

0:16:52.160,0:16:56.639
getting a run for its money these days

0:16:54.480,0:16:58.399
with private parcel companies like ups

0:16:56.639,0:17:00.560
and fedex

0:16:58.399,0:17:02.160
utilities which we talked about already

0:17:00.560,0:17:03.279
the utilities industry is where a

0:17:02.160,0:17:07.520
natural government

0:17:03.279,0:17:10.559
allowed monopolies flourish until

0:17:07.520,0:17:12.880
the government doesn’t allow it anymore

0:17:10.559,0:17:16.079
and it’s kind of strange because

0:17:12.880,0:17:19.039
this happened a few years back where

0:17:16.079,0:17:20.720
back in the early 2000s we had a major

0:17:19.039,0:17:23.439
power outage in the northeast

0:17:20.720,0:17:25.199
and it turned out that power outage came

0:17:23.439,0:17:28.079
was a result of

0:17:25.199,0:17:30.320
a mismanaged power network out in i

0:17:28.079,0:17:33.200
think ohio at the time

0:17:30.320,0:17:33.679
and it’s a privately owned company they

0:17:33.200,0:17:35.840
weren’t

0:17:33.679,0:17:37.840
under any kind of monopolistic

0:17:35.840,0:17:39.760
regulations or anything

0:17:37.840,0:17:40.960
but because of the problem that they

0:17:39.760,0:17:43.440
caused

0:17:40.960,0:17:45.360
that took down the rest of the network

0:17:43.440,0:17:46.080
in the northeast the government came in

0:17:45.360,0:17:50.160
and imposed

0:17:46.080,0:17:52.640
sanctions on them and fines and so forth

0:17:50.160,0:17:54.400
do you think that’s a way or an

0:17:52.640,0:17:55.360
efficient way for the government to sort

0:17:54.400,0:17:58.480
of

0:17:55.360,0:18:00.400
allow monopolies to happen but penalize

0:17:58.480,0:18:01.760
them if they don’t adhere to some level

0:18:00.400,0:18:03.039
of standard

0:18:01.760,0:18:04.960
i mean yeah i mean that’s a pretty

0:18:03.039,0:18:06.640
extreme example if you cause you know

0:18:04.960,0:18:07.919
the northeast to have a blackout

0:18:06.640,0:18:10.080
i think you deserve to get punished for

0:18:07.919,0:18:11.679
some reason but i think you said it was

0:18:10.080,0:18:14.000
a privately owned company it wasn’t like

0:18:11.679,0:18:15.520
yeah so if it was i don’t know i think

0:18:14.000,0:18:16.960
if it was a larger company they

0:18:15.520,0:18:18.799
they might not be as harsh you know if

0:18:16.960,0:18:20.240
it’s this if it’s the small

0:18:18.799,0:18:21.919
independent company they can easily

0:18:20.240,0:18:23.360
point the finger and blame them but if

0:18:21.919,0:18:24.240
it was something like general electric

0:18:23.360,0:18:26.160
or something

0:18:24.240,0:18:27.520
they might be a little bit hesitant to

0:18:26.160,0:18:30.640
punish them as harshly i think

0:18:27.520,0:18:32.559
right no i could see that so the

0:18:30.640,0:18:34.320
monopolies in these instances are

0:18:32.559,0:18:37.440
allowed because the suppliers incur

0:18:34.320,0:18:39.679
large costs of producing power or water

0:18:37.440,0:18:41.200
or providing these services to each

0:18:39.679,0:18:43.280
household

0:18:41.200,0:18:44.960
and it’s considered more efficient for

0:18:43.280,0:18:46.559
there to be a sole provider for these

0:18:44.960,0:18:49.039
services do you think it’s more

0:18:46.559,0:18:51.039
efficient for you to have a sole

0:18:49.039,0:18:52.240
cable provider or do you think

0:18:51.039,0:18:54.080
competition

0:18:52.240,0:18:55.280
in the cable market would be better for

0:18:54.080,0:18:58.960
the consumers because

0:18:55.280,0:19:01.760
right now cable’s not considered a a

0:18:58.960,0:19:03.679
public utility and there’s a lot of push

0:19:01.760,0:19:06.960
to have it considered that way

0:19:03.679,0:19:11.360
as far as protections and regulation go

0:19:06.960,0:19:13.679
if they did do you think having

0:19:11.360,0:19:14.640
two or three cable providers would be

0:19:13.679,0:19:16.480
better or

0:19:14.640,0:19:18.160
having a monopoly would be better yeah

0:19:16.480,0:19:20.240
definitely because i think competition

0:19:18.160,0:19:22.000
it breeds innovation right because you

0:19:20.240,0:19:23.360
need to be able to beat your competitor

0:19:22.000,0:19:24.799
and you beat your competitor by making

0:19:23.360,0:19:26.000
more money which means having a better

0:19:24.799,0:19:27.520
product in theory

0:19:26.000,0:19:29.039
so i think if if there was only one

0:19:27.520,0:19:30.240
company then they would just stagnate

0:19:29.039,0:19:31.360
they would settle for

0:19:30.240,0:19:32.480
you know whatever service they’re going

0:19:31.360,0:19:33.679
to provide but if you’ve got that

0:19:32.480,0:19:34.960
competition

0:19:33.679,0:19:36.799
i think that ends up benefiting the

0:19:34.960,0:19:38.160
consumer in the long run yeah and i

0:19:36.799,0:19:39.919
think you’re right i think the only time

0:19:38.160,0:19:41.600
you get innovation is when companies

0:19:39.919,0:19:43.440
have to innovate

0:19:41.600,0:19:44.720
and the only time companies have to

0:19:43.440,0:19:46.640
innovate is if

0:19:44.720,0:19:49.039
the competition makes them which is

0:19:46.640,0:19:50.400
their number one motivation

0:19:49.039,0:19:53.760
because that’s where their profits are

0:19:50.400,0:19:55.280
or if the government forces them to

0:19:53.760,0:19:57.200
and to a certain extent the government

0:19:55.280,0:19:57.520
did force a lot of these cable companies

0:19:57.200,0:19:59.600
to

0:19:57.520,0:20:01.760
innovate their technology because they

0:19:59.600,0:20:04.400
were taking bandwidth back from them

0:20:01.760,0:20:06.000
which is why we have digital tv now you

0:20:04.400,0:20:07.919
know that was not because the

0:20:06.000,0:20:10.240
cable companies were in competition for

0:20:07.919,0:20:12.159
each other to provide better services

0:20:10.240,0:20:13.360
that was because the government mandated

0:20:12.159,0:20:15.840
that so

0:20:13.360,0:20:16.880
you can in certain circumstances still

0:20:15.840,0:20:19.679
have monopolies

0:20:16.880,0:20:21.200
that innovate when the government forces

0:20:19.679,0:20:24.320
them to do so

0:20:21.200,0:20:27.600
and still allow monopolies to exist

0:20:24.320,0:20:29.039
uh in the country so we’re going to take

0:20:27.600,0:20:29.520
a quick break and we’re going to come

0:20:29.039,0:20:33.039
back

0:20:29.520,0:20:36.159
and talk about some of the

0:20:33.039,0:20:38.159
anti-trust laws and a little bit of what

0:20:36.159,0:20:41.220
uh what the company what the country has

0:20:38.159,0:20:46.840
done to break up monopolies

0:20:41.220,0:20:48.799
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[Music]

0:21:51.360,0:21:56.880
welcome back to insights into tomorrow

0:21:54.480,0:21:58.080
we’re talking modern-day monopolies

0:21:56.880,0:22:00.559
today we’re going to talk a little about

0:21:58.080,0:22:02.000
anti-trust laws and you can’t really

0:22:00.559,0:22:04.320
talk about monopolies

0:22:02.000,0:22:05.280
unless you’re talking about unless you

0:22:04.320,0:22:08.799
mention at least

0:22:05.280,0:22:10.960
the sherman antitrust act so in 1890 the

0:22:08.799,0:22:12.000
sherman antitrust act became the first

0:22:10.960,0:22:15.360
legislation passed

0:22:12.000,0:22:18.000
by the us congress to limit monopolies

0:22:15.360,0:22:20.640
it had strong support by congress it

0:22:18.000,0:22:24.840
passed the senate with a vote of 51

0:22:20.640,0:22:27.120
to 1 and passed the house unanimously

0:22:24.840,0:22:30.559
242-0

0:22:27.120,0:22:33.440
and that was put in place to regulate

0:22:30.559,0:22:34.400
mostly the big industries at the time

0:22:33.440,0:22:38.080
which were

0:22:34.400,0:22:40.720
oil oil uh locomotives you know your

0:22:38.080,0:22:42.480
your rail service your steel industry

0:22:40.720,0:22:45.600
and so forth

0:22:42.480,0:22:47.520
then in 1914 two additionally any trust

0:22:45.600,0:22:51.280
pieces of legislation legislation

0:22:47.520,0:22:53.200
were passed to protect consumers the

0:22:51.280,0:22:55.840
clayton antitrust act

0:22:53.200,0:22:57.520
which created new rules for mergers and

0:22:55.840,0:23:00.080
corporate directors

0:22:57.520,0:23:02.080
and also listed specific examples of

0:23:00.080,0:23:04.159
practices that would violate the sherman

0:23:02.080,0:23:08.159
antitrust

0:23:04.159,0:23:10.480
and then the federal trade commission um

0:23:08.159,0:23:12.400
the federal trade commission act which

0:23:10.480,0:23:15.200
sets standards for business practices

0:23:12.400,0:23:17.120
and enforces the two antitrust acts

0:23:15.200,0:23:19.520
along with the antitrust division of the

0:23:17.120,0:23:21.760
u.s department of justice

0:23:19.520,0:23:22.640
so the laws are intended to preserve

0:23:21.760,0:23:24.720
competition

0:23:22.640,0:23:26.080
and allow smaller companies to enter a

0:23:24.720,0:23:28.159
market

0:23:26.080,0:23:29.200
and not to merely suppress strong

0:23:28.159,0:23:32.960
companies

0:23:29.200,0:23:35.520
and i think that’s a theme that

0:23:32.960,0:23:37.440
i think resonates today because a lot of

0:23:35.520,0:23:38.400
what people are talking about today with

0:23:37.440,0:23:41.520
our big

0:23:38.400,0:23:43.600
monopolies is

0:23:41.520,0:23:45.200
that they’re not harming people because

0:23:43.600,0:23:48.080
they’re not producing

0:23:45.200,0:23:49.360
a product or a service and the biggest

0:23:48.080,0:23:52.480
example of this would be

0:23:49.360,0:23:55.679
social media and facebook so facebook

0:23:52.480,0:23:58.640
isn’t harming anyone by not bringing

0:23:55.679,0:23:59.840
new products to market they’re just a

0:23:58.640,0:24:02.320
really big company

0:23:59.840,0:24:03.679
you know the same thing with google and

0:24:02.320,0:24:05.679
the push today

0:24:03.679,0:24:06.880
seems to be targeting well these

0:24:05.679,0:24:09.200
companies are too big

0:24:06.880,0:24:10.720
and they shouldn’t be that big and and i

0:24:09.200,0:24:12.240
think the the point that i’m trying to

0:24:10.720,0:24:16.000
make here is

0:24:12.240,0:24:17.919
that’s not something that the antitrust

0:24:16.000,0:24:19.120
laws are designed to cope with what are

0:24:17.919,0:24:20.880
your thoughts on that

0:24:19.120,0:24:22.799
yeah definitely i think it’s these are

0:24:20.880,0:24:25.039
obviously laws that were made in

0:24:22.799,0:24:27.440
you know before 1900 so they definitely

0:24:25.039,0:24:29.360
need to be updated but i think it’s

0:24:27.440,0:24:31.039
it’s kind of what comes with technology

0:24:29.360,0:24:32.400
right it’s you got to make new laws

0:24:31.039,0:24:33.279
you’ve got to adapt the way you think

0:24:32.400,0:24:34.400
about it because while they’re not

0:24:33.279,0:24:37.200
making a product

0:24:34.400,0:24:38.400
these companies have data on everybody

0:24:37.200,0:24:40.400
and when you have things like

0:24:38.400,0:24:41.600
information leaks and the companies

0:24:40.400,0:24:42.960
aren’t necessarily held accountable like

0:24:41.600,0:24:44.480
facebook has them all the time where

0:24:42.960,0:24:45.600
people’s personal data gets leaked and i

0:24:44.480,0:24:47.520
think that that

0:24:45.600,0:24:49.200
is a huge problem that should be you

0:24:47.520,0:24:51.279
know more harshly punished

0:24:49.200,0:24:52.400
and i think that that would come with a

0:24:51.279,0:24:54.720
more modern

0:24:52.400,0:24:55.520
look at you know antitrust laws well and

0:24:54.720,0:24:57.279
i think so

0:24:55.520,0:24:58.799
i agree with you to a certain extent

0:24:57.279,0:25:00.559
that

0:24:58.799,0:25:03.039
the companies themselves have a certain

0:25:00.559,0:25:04.640
obligation to protect the user’s data

0:25:03.039,0:25:07.520
however

0:25:04.640,0:25:07.919
the users give the data up freely so

0:25:07.520,0:25:10.480
there’s

0:25:07.919,0:25:12.960
there’s not i don’t think there’s really

0:25:10.480,0:25:15.520
an expectation of privacy

0:25:12.960,0:25:16.159
because it’s a social network right yeah

0:25:15.520,0:25:18.159
so when i

0:25:16.159,0:25:20.320
post my information my pictures and

0:25:18.159,0:25:21.520
whatever i’m posting them there for

0:25:20.320,0:25:24.000
people to see

0:25:21.520,0:25:25.039
so i can’t really get upset when when

0:25:24.000,0:25:27.679
facebook

0:25:25.039,0:25:28.880
links that to other people the other

0:25:27.679,0:25:32.000
problem that you run into

0:25:28.880,0:25:35.559
is that the modern laws that we have

0:25:32.000,0:25:38.559
have penalties that are

0:25:35.559,0:25:39.919
insignificant to the size of these

0:25:38.559,0:25:41.120
companies now

0:25:39.919,0:25:42.799
which i think is where some of the

0:25:41.120,0:25:44.080
argument comes in that these companies

0:25:42.799,0:25:45.679
are too big

0:25:44.080,0:25:47.440
you know you might get a couple hundred

0:25:45.679,0:25:50.000
thousand dollar fine

0:25:47.440,0:25:51.840
for a data breach that’s like nothing

0:25:50.000,0:25:52.559
when you’re a multi-billion dollar

0:25:51.840,0:25:55.200
company

0:25:52.559,0:25:56.640
that’s as you know essentially you lost

0:25:55.200,0:25:58.320
that money in the cushions of the couch

0:25:56.640,0:26:01.039
yeah the time it took to

0:25:58.320,0:26:02.400
draft the the document to charge you’ve

0:26:01.039,0:26:04.320
already made a billion dollars

0:26:02.400,0:26:05.600
right so there’s really very little

0:26:04.320,0:26:07.440
incentive

0:26:05.600,0:26:09.120
to do anything other than continue

0:26:07.440,0:26:09.679
business as is and just pay the fines

0:26:09.120,0:26:12.720
because

0:26:09.679,0:26:13.919
you’re still monumentally profitable

0:26:12.720,0:26:16.000
uh so i think there needs to be a

0:26:13.919,0:26:16.640
fundamental shift in what the penalties

0:26:16.000,0:26:18.400
look like

0:26:16.640,0:26:20.799
in order for the penalties to have any

0:26:18.400,0:26:22.840
meaning whatsoever

0:26:20.799,0:26:24.159
so in talking about breaking up

0:26:22.840,0:26:26.880
monopolies

0:26:24.159,0:26:27.279
the sherman any trust act was targeted

0:26:26.880,0:26:29.760
at

0:26:27.279,0:26:31.520
companies like standard oil and even the

0:26:29.760,0:26:32.000
american tobacco company which didn’t

0:26:31.520,0:26:34.559
break

0:26:32.000,0:26:35.840
up the companies it broke up standard

0:26:34.559,0:26:41.039
oil but what it did was it

0:26:35.840,0:26:41.039
it pushed more public awareness

0:26:41.120,0:26:44.240
in 1994 the us government accused

0:26:43.279,0:26:46.320
microsoft

0:26:44.240,0:26:48.720
of using a significant market share in

0:26:46.320,0:26:51.279
the pc operating system business

0:26:48.720,0:26:53.039
to prevent competition and maintain a

0:26:51.279,0:26:55.279
monopoly

0:26:53.039,0:26:56.880
now this is significa significant

0:26:55.279,0:26:57.440
because i think it’s the really the

0:26:56.880,0:27:00.480
first

0:26:57.440,0:27:04.080
modern monopoly with high-tech

0:27:00.480,0:27:04.080
industry that we

0:27:04.240,0:27:07.279
kind of see come across the the

0:27:06.320,0:27:10.080
government’s

0:27:07.279,0:27:10.880
uh crosshairs yeah they they broke up

0:27:10.080,0:27:13.440
the the

0:27:10.880,0:27:15.520
the uh the bell companies the phone

0:27:13.440,0:27:17.679
companies and stuff like that but

0:27:15.520,0:27:19.279
i think that was less significant from a

0:27:17.679,0:27:20.080
technological standpoint because it was

0:27:19.279,0:27:23.120
really legacy

0:27:20.080,0:27:23.760
technology but here you have microsoft

0:27:23.120,0:27:27.520
who is

0:27:23.760,0:27:30.559
at the forefront of computer technology

0:27:27.520,0:27:31.520
but they’re also internationally

0:27:30.559,0:27:33.120
acclaimed for

0:27:31.520,0:27:34.720
for this technology and you have the

0:27:33.120,0:27:35.600
united states it’s trying to set

0:27:34.720,0:27:38.000
precedent

0:27:35.600,0:27:39.919
here and i think if anything that’s

0:27:38.000,0:27:42.320
where we kind of look back

0:27:39.919,0:27:43.840
to see what’s going to guide our

0:27:42.320,0:27:45.039
principles moving forward what do you

0:27:43.840,0:27:46.559
think about that

0:27:45.039,0:27:48.080
yeah definitely i mean i think i’ve said

0:27:46.559,0:27:49.840
it on the show before again

0:27:48.080,0:27:51.360
not a lawyer but you know the law is

0:27:49.840,0:27:52.960
about president right so something like

0:27:51.360,0:27:54.399
this this case here

0:27:52.960,0:27:56.320
sets the precedent for technology

0:27:54.399,0:27:58.240
companies going forward of how

0:27:56.320,0:28:00.240
their versions of monopolies excuse me

0:27:58.240,0:28:03.760
are viewed in courts and i think that

0:28:00.240,0:28:04.480
you know having microsoft be this big

0:28:03.760,0:28:07.679
example

0:28:04.480,0:28:09.039
in 1994 is extremely important uh just

0:28:07.679,0:28:10.159
to have something to look back at

0:28:09.039,0:28:11.760
especially

0:28:10.159,0:28:13.520
you know i don’t think anybody could

0:28:11.760,0:28:15.279
have imagined what technology would have

0:28:13.520,0:28:17.520
is like now compared to what it was in

0:28:15.279,0:28:18.720
1994 but it’s much larger and much more

0:28:17.520,0:28:21.600
in the forefront

0:28:18.720,0:28:22.880
of just our daily conversations yeah and

0:28:21.600,0:28:26.080
essentially what happened

0:28:22.880,0:28:28.080
is in 98 you had a federal district

0:28:26.080,0:28:30.960
judge ruled that microsoft needed to be

0:28:28.080,0:28:32.480
broken into technology companies

0:28:30.960,0:28:34.480
but that was a decision that was later

0:28:32.480,0:28:37.200
reversed there were compromises that

0:28:34.480,0:28:41.760
happened there were fines that happened

0:28:37.200,0:28:44.159
microsoft ultimately agreed to have a

0:28:41.760,0:28:45.039
a government overseer become part of the

0:28:44.159,0:28:48.000
company

0:28:45.039,0:28:49.679
to make sure that the company wasn’t uh

0:28:48.000,0:28:52.399
engaging in monopolistic

0:28:49.679,0:28:53.679
activities microsoft in the 80s and 90s

0:28:52.399,0:28:56.159
was brutal

0:28:53.679,0:28:57.679
you know they would they had a

0:28:56.159,0:28:59.760
philosophy of

0:28:57.679,0:29:01.679
well let’s not compete with others let’s

0:28:59.760,0:29:03.679
just destroy the competition

0:29:01.679,0:29:05.039
and they did they were very effective at

0:29:03.679,0:29:05.840
it yeah i think there’s an episode i

0:29:05.039,0:29:07.840
don’t know if you’ve ever watched the

0:29:05.840,0:29:08.880
cnn series it’s just called the 70s or

0:29:07.840,0:29:09.679
the years it’s one of those there’s a

0:29:08.880,0:29:11.679
whole episode

0:29:09.679,0:29:13.440
on like the apple microsoft word it’s

0:29:11.679,0:29:15.360
really interesting yeah and it’s funny

0:29:13.440,0:29:18.159
because

0:29:15.360,0:29:19.440
microsoft destroyed apple to the point

0:29:18.159,0:29:21.200
that apple was

0:29:19.440,0:29:22.799
roughly three months away from going

0:29:21.200,0:29:26.960
bankrupt

0:29:22.799,0:29:30.000
and bill gates in a very famous

0:29:26.960,0:29:31.520
uh appearance shows up at the

0:29:30.000,0:29:33.760
at the apple worldwide developer

0:29:31.520,0:29:36.320
conference via video

0:29:33.760,0:29:38.399
and steve jobs was still alive at the

0:29:36.320,0:29:39.200
time and announced that microsoft is

0:29:38.399,0:29:42.799
investing in

0:29:39.200,0:29:45.520
apple and they booed

0:29:42.799,0:29:46.799
bill gates for saving the company all

0:29:45.520,0:29:49.919
the people that were in the crowd

0:29:46.799,0:29:52.080
booed when they heard about that and the

0:29:49.919,0:29:53.760
funny thing is the only reason microsoft

0:29:52.080,0:29:54.480
did that was not so that they could make

0:29:53.760,0:29:56.960
profit

0:29:54.480,0:29:58.480
off of apple it was so that they could

0:29:56.960,0:29:59.840
maintain the appearance

0:29:58.480,0:30:03.200
of having competition of having

0:29:59.840,0:30:05.039
competition that’s all it was

0:30:03.200,0:30:06.880
and the government fell for it yeah the

0:30:05.039,0:30:09.679
government fell for it

0:30:06.880,0:30:10.480
so i mean a lot of times it’s really

0:30:09.679,0:30:11.919
just about

0:30:10.480,0:30:13.919
you know jumping through the flaming

0:30:11.919,0:30:15.360
hoops and and making people believe the

0:30:13.919,0:30:17.200
right thing yeah and like not even

0:30:15.360,0:30:19.120
in terms of government but just in terms

0:30:17.200,0:30:20.720
of public opinion too

0:30:19.120,0:30:22.080
you have like you get that with video

0:30:20.720,0:30:22.880
game consoles too i know it’s not nearly

0:30:22.080,0:30:24.960
on the same level

0:30:22.880,0:30:26.000
but if you maintain that rivalry between

0:30:24.960,0:30:27.600
two companies

0:30:26.000,0:30:29.200
it makes it look even better and that

0:30:27.600,0:30:30.320
you’re not a monopoly because you know

0:30:29.200,0:30:32.240
you know i’m an apple fan i’m a

0:30:30.320,0:30:33.440
microsoft fan but in reality you know

0:30:32.240,0:30:35.279
it’s the same company like

0:30:33.440,0:30:36.880
not really but if they bailed out your

0:30:35.279,0:30:37.360
company they still owe them a debt in

0:30:36.880,0:30:39.360
some way

0:30:37.360,0:30:40.840
sure well and you look at you know we

0:30:39.360,0:30:42.640
stick with technology you look at

0:30:40.840,0:30:45.760
microprocessors

0:30:42.640,0:30:48.559
so you’ve got intel and you’ve got amd

0:30:45.760,0:30:51.039
and amd has always been sort of the

0:30:48.559,0:30:53.600
red-headed step-child

0:30:51.039,0:30:55.360
to intel where they were the rebels they

0:30:53.600,0:30:58.240
were the underdogs

0:30:55.360,0:30:59.279
uh their processors were for like the

0:30:58.240,0:31:02.640
elite group of

0:30:59.279,0:31:04.880
gamers or overclockers or whatever and

0:31:02.640,0:31:07.919
you look at what happened to intel and

0:31:04.880,0:31:10.080
intel has in recent years

0:31:07.919,0:31:11.519
been completely burned by their

0:31:10.080,0:31:13.200
technology choices because of the

0:31:11.519,0:31:16.000
shortcuts that they made

0:31:13.200,0:31:18.000
that amd didn’t make and amd picked up a

0:31:16.000,0:31:19.279
huge market share

0:31:18.000,0:31:21.200
and now you’re seeing another

0:31:19.279,0:31:24.240
fundamental shift that’s

0:31:21.200,0:31:27.360
detrimental to intel with

0:31:24.240,0:31:30.399
apple moving away from intel processors

0:31:27.360,0:31:32.640
in their computers now to their own

0:31:30.399,0:31:34.320
designed ones that they’re manufacturing

0:31:32.640,0:31:37.679
themselves

0:31:34.320,0:31:40.799
so intel’s getting hit again with this

0:31:37.679,0:31:43.519
um so that this was an instance

0:31:40.799,0:31:44.320
where intel got very complacent in what

0:31:43.519,0:31:46.240
they were doing

0:31:44.320,0:31:49.120
and now they’ve fallen significantly

0:31:46.240,0:31:51.360
behind in the processor market

0:31:49.120,0:31:52.480
and the tables have kind of shifted but

0:31:51.360,0:31:55.840
at the time

0:31:52.480,0:31:58.640
when intel was dominant intel was

0:31:55.840,0:32:01.279
actually supplying information and

0:31:58.640,0:32:03.360
support to amd to maintain that

0:32:01.279,0:32:04.480
appearance of competition works every

0:32:03.360,0:32:06.799
time um

0:32:04.480,0:32:08.559
so again it really is it’s just a matter

0:32:06.799,0:32:10.720
of appearance sometimes

0:32:08.559,0:32:12.840
to keep from getting hit with

0:32:10.720,0:32:15.360
monopolistic uh

0:32:12.840,0:32:18.159
charges um so

0:32:15.360,0:32:19.840
we talked briefly about a t the most

0:32:18.159,0:32:22.080
prominent monopoly breakup in the us

0:32:19.840,0:32:23.679
history was a t

0:32:22.080,0:32:26.559
after being allowed to control the

0:32:23.679,0:32:28.320
nation’s telephone service for decades

0:32:26.559,0:32:30.320
as a government supported monopoly the

0:32:28.320,0:32:32.960
giant telecommunications company found

0:32:30.320,0:32:36.799
itself challenged by any trust laws

0:32:32.960,0:32:39.840
in 1982 after an eight-year court battle

0:32:36.799,0:32:43.120
at t had to divest itself

0:32:39.840,0:32:45.120
of 22 local exchange service companies

0:32:43.120,0:32:46.320
and has been forced to sell off assets

0:32:45.120,0:32:48.480
or split units

0:32:46.320,0:32:50.559
several times since now the real

0:32:48.480,0:32:53.120
interesting thing is

0:32:50.559,0:32:53.919
you had what were termed as baby bells

0:32:53.120,0:32:56.320
during this

0:32:53.919,0:32:58.240
so you had all these certified local

0:32:56.320,0:33:00.159
exchange clicks

0:32:58.240,0:33:01.600
certified local exchange carriers pop up

0:33:00.159,0:33:03.600
all over the country that were all part

0:33:01.600,0:33:08.080
of the original one

0:33:03.600,0:33:11.440
and over the last 10 to 15 years

0:33:08.080,0:33:14.240
you’ve seen all those get swept up

0:33:11.440,0:33:15.760
and they’re now owned by verizon so you

0:33:14.240,0:33:17.679
went through that

0:33:15.760,0:33:19.279
huge natural monopoly that the

0:33:17.679,0:33:21.039
government allowed

0:33:19.279,0:33:23.519
to breaking them up when they thought

0:33:21.039,0:33:26.640
the competition was stifled

0:33:23.519,0:33:28.720
to now mergers happening

0:33:26.640,0:33:29.679
to get you back to that position where

0:33:28.720,0:33:30.880
you have

0:33:29.679,0:33:32.960
two people that are running that yeah

0:33:30.880,0:33:33.600
somebody it’s history in general is

0:33:32.960,0:33:34.880
cyclical

0:33:33.600,0:33:36.720
and i think we’re seeing that here too

0:33:34.880,0:33:38.720
right so in maybe i don’t know

0:33:36.720,0:33:40.000
15 20 years we’ll have another breakup

0:33:38.720,0:33:40.240
and they’ll all come back out again and

0:33:40.000,0:33:42.480
then

0:33:40.240,0:33:43.760
in 30 years all gets swept up again i

0:33:42.480,0:33:45.519
think that’s just how these things work

0:33:43.760,0:33:47.279
and that’s just and i think that’s kind

0:33:45.519,0:33:49.919
of the

0:33:47.279,0:33:52.159
the point here is that that’s capitalism

0:33:49.919,0:33:55.200
that’s how capitalism works is that

0:33:52.159,0:33:56.559
monopolies are a natural outcome of

0:33:55.200,0:33:58.320
capitalism

0:33:56.559,0:34:00.399
and i think the best that government can

0:33:58.320,0:34:02.880
hope in most cases

0:34:00.399,0:34:04.320
is to try to keep it at bay as long as

0:34:02.880,0:34:06.559
possible

0:34:04.320,0:34:08.720
and eventually they’re still gonna get

0:34:06.559,0:34:11.440
gobbled up and and get eaten up your

0:34:08.720,0:34:12.960
your pharmacies had the same thing your

0:34:11.440,0:34:13.440
internet providers had the same thing

0:34:12.960,0:34:15.520
you know

0:34:13.440,0:34:17.359
i remember back in the 90s when i worked

0:34:15.520,0:34:19.919
for an internet provider

0:34:17.359,0:34:22.000
you had just in our area probably 10

0:34:19.919,0:34:24.000
different internet carriers

0:34:22.000,0:34:26.399
now you can’t get internet from anybody

0:34:24.000,0:34:28.639
other than comcast here

0:34:26.399,0:34:30.000
you cable you had three different cable

0:34:28.639,0:34:31.760
companies that you could get service

0:34:30.000,0:34:35.760
from

0:34:31.760,0:34:36.720
so it’s just a life cycle i think of

0:34:35.760,0:34:39.760
business

0:34:36.720,0:34:40.879
in in a capitalist society so we’re

0:34:39.760,0:34:41.280
going to take another break and come

0:34:40.879,0:34:45.280
back

0:34:41.280,0:34:48.100
and talk about more about our

0:34:45.280,0:34:56.399
modern monopoly problem in america

0:34:48.100,0:34:59.440
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http://www.the2ndsithempire.com

0:35:58.320,0:36:03.040
welcome back to insights into tomorrow

0:36:00.880,0:36:06.000
we’re talking modern monopolies

0:36:03.040,0:36:06.880
so forbes did an interesting article uh

0:36:06.000,0:36:10.079
about

0:36:06.880,0:36:12.079
america’s modern monopoly problem

0:36:10.079,0:36:13.440
they said without realizing it we become

0:36:12.079,0:36:16.000
a nation of monopolies

0:36:13.440,0:36:18.240
a large and growing part of our economy

0:36:16.000,0:36:18.560
is owned by a handful of companies that

0:36:18.240,0:36:20.880
face

0:36:18.560,0:36:22.000
little competition they have no

0:36:20.880,0:36:24.480
incentive to deliver

0:36:22.000,0:36:26.160
better products or to get more efficient

0:36:24.480,0:36:28.000
they simply rake in cash

0:36:26.160,0:36:29.760
from people who have no choice but to

0:36:28.000,0:36:32.160
hand it over

0:36:29.760,0:36:33.760
this would be impossible if we had true

0:36:32.160,0:36:35.359
capitalism

0:36:33.760,0:36:37.680
even if we admit some businesses are

0:36:35.359,0:36:40.720
natural monopolies most aren’t

0:36:37.680,0:36:43.040
most of them found some non-capitalistic

0:36:40.720,0:36:44.400
flaw to exploit

0:36:43.040,0:36:46.800
in theory this problem should have

0:36:44.400,0:36:47.520
solved itself as technology and consumer

0:36:46.800,0:36:50.800
preferences

0:36:47.520,0:36:51.280
change yet it hasn’t axios outlined a

0:36:50.800,0:36:53.920
problem

0:36:51.280,0:36:55.359
in a recent article on farm bankruptcies

0:36:53.920,0:36:56.320
why don’t you tell us about what they

0:36:55.359,0:36:58.320
found

0:36:56.320,0:37:00.400
sure so three companies control about

0:36:58.320,0:37:02.079
eighty percent of mobile telecoms

0:37:00.400,0:37:04.160
three have ninety five percent of credit

0:37:02.079,0:37:06.079
cards four have seventy percent of

0:37:04.160,0:37:08.800
airline flights within the united states

0:37:06.079,0:37:09.680
uh google handles 60 of all searches

0:37:08.800,0:37:11.760
online

0:37:09.680,0:37:13.920
uh in agriculture four companies control

0:37:11.760,0:37:17.280
66 percent of u.s hogs

0:37:13.920,0:37:18.640
slaughtered in 2015 85 of the steer and

0:37:17.280,0:37:19.680
half of the chickens

0:37:18.640,0:37:22.000
according to the department of

0:37:19.680,0:37:24.240
agriculture and finally just four

0:37:22.000,0:37:25.359
companies control 85 percent of u.s corn

0:37:24.240,0:37:27.680
seed sales

0:37:25.359,0:37:28.400
that’s up from 60 percent in 2000 so

0:37:27.680,0:37:31.040
there’s some

0:37:28.400,0:37:33.920
consolidation there and 75 percent of

0:37:31.040,0:37:36.079
soybean seed a jump from about half

0:37:33.920,0:37:37.680
according to the agriculture department

0:37:36.079,0:37:38.720
that’s pretty staggering and that’s not

0:37:37.680,0:37:42.240
even talking big

0:37:38.720,0:37:46.560
tech where a lot of our focus is today

0:37:42.240,0:37:50.880
and we’re talking telecoms credit cards

0:37:46.560,0:37:52.880
airlines search which we’ll get to

0:37:50.880,0:37:54.880
and agriculture i mean our agriculture

0:37:52.880,0:37:57.760
is really tied up to that

0:37:54.880,0:37:59.920
few companies i mean i find that

0:37:57.760,0:38:00.480
alarming at best what’s your thoughts on

0:37:59.920,0:38:02.400
that

0:38:00.480,0:38:04.000
yeah you go back to the your ocean spray

0:38:02.400,0:38:05.760
example where it’s it’s one company

0:38:04.000,0:38:07.440
but it’s made up of smaller farms is

0:38:05.760,0:38:08.400
that i guess that’s probably similar

0:38:07.440,0:38:11.440
that’s probably would be an

0:38:08.400,0:38:13.040
issue yeah so it’s it’s you know if you

0:38:11.440,0:38:14.560
want to have a successful farm you have

0:38:13.040,0:38:15.520
to join up with this company basically

0:38:14.560,0:38:16.800
is what you’re getting at and that is a

0:38:15.520,0:38:18.880
monopoly but

0:38:16.800,0:38:20.240
if the farms are getting the independent

0:38:18.880,0:38:23.119
farms are getting their

0:38:20.240,0:38:24.160
proper cut it’s not as bad as it could

0:38:23.119,0:38:25.599
be right where they’re just being

0:38:24.160,0:38:28.240
exploited for their product

0:38:25.599,0:38:30.320
right i mean i don’t know it’s it’s like

0:38:28.240,0:38:31.839
this big company just become a part of

0:38:30.320,0:38:34.000
i suppose if you want to have a farm i

0:38:31.839,0:38:35.280
don’t know yeah well and one of the

0:38:34.000,0:38:36.000
things that they talk about they talk

0:38:35.280,0:38:38.160
about a couple

0:38:36.000,0:38:40.320
couple different outcomes that we get

0:38:38.160,0:38:42.079
from this one is being

0:38:40.320,0:38:44.000
having a gummed up economy some

0:38:42.079,0:38:45.040
economists say the concentration of

0:38:44.000,0:38:47.520
market power is

0:38:45.040,0:38:49.839
gumming up the economy and larger the

0:38:47.520,0:38:52.960
blame for decades of flat wages and

0:38:49.839,0:38:55.680
weak productivity growth they say

0:38:52.960,0:38:57.359
gumming up the economy is a good way to

0:38:55.680,0:39:00.640
describe it because we’re getting

0:38:57.359,0:39:02.640
competition that competition itself is

0:39:00.640,0:39:05.359
an economic lubricant

0:39:02.640,0:39:06.960
and the machine machines work more

0:39:05.359,0:39:08.640
efficiently when the parts are moving

0:39:06.960,0:39:10.960
freely

0:39:08.640,0:39:13.359
we get more output from the same input

0:39:10.960,0:39:15.280
or the same output with less input

0:39:13.359,0:39:17.520
take away the competition and it all

0:39:15.280,0:39:19.280
begins to grind together kind of like a

0:39:17.520,0:39:21.440
internal combustion engine that you

0:39:19.280,0:39:23.760
don’t keep the oil changed in

0:39:21.440,0:39:24.880
eventually friction brings it to a halt

0:39:23.760,0:39:27.680
and sometimes

0:39:24.880,0:39:29.359
a fiery one normally companies grow

0:39:27.680,0:39:31.040
their profits by delivering better

0:39:29.359,0:39:33.599
products at lower prices

0:39:31.040,0:39:35.440
than their competitors it’s a dynamic

0:39:33.599,0:39:36.240
process with competitors constantly

0:39:35.440,0:39:38.240
dropping out

0:39:36.240,0:39:39.680
new ones appearing this has been

0:39:38.240,0:39:42.320
described as what’s called

0:39:39.680,0:39:44.320
creative quote creative destruction

0:39:42.320,0:39:46.640
which sounds harsh but is absolutely

0:39:44.320,0:39:48.560
necessary for economic growth

0:39:46.640,0:39:49.760
today the created destruction isn’t

0:39:48.560,0:39:51.599
happening

0:39:49.760,0:39:53.119
and as companies refuse to die and

0:39:51.599,0:39:56.079
monopolies refuse to

0:39:53.119,0:39:56.880
improve we struggle to generate even

0:39:56.079,0:39:59.520
mild

0:39:56.880,0:40:00.960
economic growth and i think we’re seeing

0:39:59.520,0:40:03.599
that across

0:40:00.960,0:40:05.119
our entire economy at this point in time

0:40:03.599,0:40:06.960
what are your thoughts on that

0:40:05.119,0:40:08.000
yeah definitely i mean we just read off

0:40:06.960,0:40:09.680
all those examples of all those

0:40:08.000,0:40:11.680
companies that own everything right so

0:40:09.680,0:40:12.800
i think if especially when you get to

0:40:11.680,0:40:13.920
the point where you’re too big of a

0:40:12.800,0:40:16.079
company to fail

0:40:13.920,0:40:17.200
and it refuses to die just like that

0:40:16.079,0:40:18.319
article said when

0:40:17.200,0:40:20.640
when you’re at that level where you

0:40:18.319,0:40:21.839
control over half of you know some kind

0:40:20.640,0:40:23.920
of domestic

0:40:21.839,0:40:25.599
product it’s going to be difficult for

0:40:23.920,0:40:26.800
you to fail even if you wanted to

0:40:25.599,0:40:28.319
and then you end up getting the

0:40:26.800,0:40:29.920
stagnation that we’re seeing today

0:40:28.319,0:40:32.000
absolutely yeah

0:40:29.920,0:40:34.079
they also talk about uncreative

0:40:32.000,0:40:36.000
destruction created the structure means

0:40:34.079,0:40:37.599
companies go out of business and workers

0:40:36.000,0:40:39.839
lose their jobs

0:40:37.599,0:40:41.280
maybe a few competitors will hire them

0:40:39.839,0:40:42.480
eventually but they suffer in the

0:40:41.280,0:40:45.440
meantime

0:40:42.480,0:40:47.760
politicians try to try to help but

0:40:45.440,0:40:49.520
finding the right balance is hard

0:40:47.760,0:40:50.880
greater blame should be assigned to the

0:40:49.520,0:40:54.240
central bankers

0:40:50.880,0:40:56.960
not just the fed but its peers as well

0:40:54.240,0:40:59.440
for whatever reason they kept short-term

0:40:56.960,0:41:00.000
stimulus measures and near-zero rates

0:40:59.440,0:41:03.359
for far

0:41:00.000,0:41:05.119
too long the resulting flood of capital

0:41:03.359,0:41:07.440
bypassed the creative destruction

0:41:05.119,0:41:08.560
process a lot of this happened under the

0:41:07.440,0:41:10.720
radar

0:41:08.560,0:41:11.839
you’ve probably seen stories about the

0:41:10.720,0:41:14.720
lyft ipo

0:41:11.839,0:41:15.760
and other unicorns that will soon go

0:41:14.720,0:41:19.280
public

0:41:15.760,0:41:22.079
unicorns being a type of a

0:41:19.280,0:41:23.920
wishful company going public with a very

0:41:22.079,0:41:26.000
high ipo

0:41:23.920,0:41:28.160
the news this new this is news because

0:41:26.000,0:41:30.000
it’s now so unusual

0:41:28.160,0:41:31.200
the number of listed companies is

0:41:30.000,0:41:33.839
shrinking

0:41:31.200,0:41:35.760
because a cheap capital lets them stay

0:41:33.839,0:41:37.680
private longer and b

0:41:35.760,0:41:40.720
the founders and venture capitalists

0:41:37.680,0:41:43.280
often exit by selling to a larger

0:41:40.720,0:41:45.359
cash flush competitor instead of going

0:41:43.280,0:41:47.200
public

0:41:45.359,0:41:49.520
an economy in which it’s easier and

0:41:47.200,0:41:51.440
cheaper to buy your competitors rather

0:41:49.520,0:41:53.280
than out innovate them is probably

0:41:51.440,0:41:55.359
headed towards stagnation

0:41:53.280,0:41:58.640
and that’s the problem that we had we

0:41:55.359,0:42:00.319
saw all through the 1800s

0:41:58.640,0:42:02.319
competition was being bought up

0:42:00.319,0:42:05.440
constantly the railroads

0:42:02.319,0:42:08.400
the consolidation in the

0:42:05.440,0:42:10.800
auto industry in the in the early half

0:42:08.400,0:42:14.000
of the 20th century anytime that you see

0:42:10.800,0:42:17.119
competition just being eaten up

0:42:14.000,0:42:18.960
by buying them out you’re not

0:42:17.119,0:42:20.560
innovating at all when you buy you just

0:42:18.960,0:42:20.880
have companies that are so large they

0:42:20.560,0:42:24.000
can

0:42:20.880,0:42:24.560
buy out anybody that’s that’s competing

0:42:24.000,0:42:26.319
with them

0:42:24.560,0:42:29.280
facebook is doing the same exact thing

0:42:26.319,0:42:30.640
now facebook has bought up four or five

0:42:29.280,0:42:32.960
major

0:42:30.640,0:42:34.640
uh competitors all in different sectors

0:42:32.960,0:42:37.440
of what they do

0:42:34.640,0:42:37.920
but they’re buying their way to success

0:42:37.440,0:42:41.040
and

0:42:37.920,0:42:42.400
that stifles innovation what are your

0:42:41.040,0:42:44.560
what are your thoughts on that

0:42:42.400,0:42:46.000
yeah definitely i mean we talked earlier

0:42:44.560,0:42:46.880
about that barrier to entry right that’s

0:42:46.000,0:42:48.319
one of the biggest things when you’re

0:42:46.880,0:42:50.400
looking at these monopolies

0:42:48.319,0:42:51.839
and if you’re a small startup trying to

0:42:50.400,0:42:53.440
compete with somebody like facebook and

0:42:51.839,0:42:54.560
they just offer you a blank check to

0:42:53.440,0:42:56.480
just buy you out

0:42:54.560,0:42:57.599
it’s hard to say no to that especially

0:42:56.480,0:42:59.280
if you know that there’s

0:42:57.599,0:43:01.040
you have no real hope of competing with

0:42:59.280,0:43:02.960
them and i think that

0:43:01.040,0:43:04.400
the more they just because when facebook

0:43:02.960,0:43:06.000
buys you out they then also get more

0:43:04.400,0:43:07.760
powerful because they have your

0:43:06.000,0:43:09.520
your your workforce or your resources or

0:43:07.760,0:43:11.040
whatever you had to offer and they have

0:43:09.520,0:43:12.079
less competition so they only get more

0:43:11.040,0:43:13.839
powerful

0:43:12.079,0:43:15.119
uh it’s it’s a it’s a win-win in the

0:43:13.839,0:43:15.440
worst kind of way i think especially

0:43:15.119,0:43:17.760
when

0:43:15.440,0:43:19.920
for consumers and the economy yeah and

0:43:17.760,0:43:22.800
and part of the problem you have is

0:43:19.920,0:43:24.720
because of this you have companies that

0:43:22.800,0:43:27.760
shouldn’t be in business

0:43:24.720,0:43:29.280
are getting bought out and and their the

0:43:27.760,0:43:30.880
technology they have is inferior

0:43:29.280,0:43:32.640
technology

0:43:30.880,0:43:34.160
but you have larger companies buying

0:43:32.640,0:43:36.000
them not because of the

0:43:34.160,0:43:39.119
technology so they can integrate into

0:43:36.000,0:43:42.240
their own they’re buying their users

0:43:39.119,0:43:44.319
so you may have a company uh

0:43:42.240,0:43:46.160
i don’t want to say quibby but you know

0:43:44.319,0:43:48.400
a company like quibby that spent all

0:43:46.160,0:43:51.760
this money up front

0:43:48.400,0:43:53.680
on advertising and and you know

0:43:51.760,0:43:56.560
we’ll say technology although it’s not

0:43:53.680,0:43:59.280
that that revolutionary

0:43:56.560,0:44:01.040
but their whole goal was to basically

0:43:59.280,0:44:02.160
get a whole bunch of people on the

0:44:01.040,0:44:06.079
platform

0:44:02.160,0:44:09.599
and then sell it and in their case

0:44:06.079,0:44:11.200
they failed in their case they projected

0:44:09.599,0:44:15.440
something like 70 million

0:44:11.200,0:44:17.599
people signing on with this 1.5 billion

0:44:15.440,0:44:20.319
budget or something that they had

0:44:17.599,0:44:22.000
they wound up getting 70 000 people

0:44:20.319,0:44:23.599
actually subscribing to it and they went

0:44:22.000,0:44:26.160
out of business

0:44:23.599,0:44:28.800
that’s the exception to the rule whereas

0:44:26.160,0:44:32.079
that should be the natural

0:44:28.800,0:44:33.280
order of how business works especially

0:44:32.079,0:44:35.200
with capitalism if you’re

0:44:33.280,0:44:36.480
not a good business you should just fail

0:44:35.200,0:44:39.119
absolutely

0:44:36.480,0:44:40.480
um but you know instead you have

0:44:39.119,0:44:42.720
companies that they

0:44:40.480,0:44:43.839
garner this large following and it could

0:44:42.720,0:44:45.520
be

0:44:43.839,0:44:47.200
because of certain people that might be

0:44:45.520,0:44:49.599
on your service

0:44:47.200,0:44:51.440
one of the things that twitter ran into

0:44:49.599,0:44:54.160
was that when they banned donald trump

0:44:51.440,0:44:55.520
around the time of the january 6

0:44:54.160,0:44:57.119
insurrection

0:44:55.520,0:44:58.720
their user base dropped off

0:44:57.119,0:44:59.599
significantly because all of his

0:44:58.720,0:45:02.720
supporters

0:44:59.599,0:45:05.760
stopped using the service

0:45:02.720,0:45:07.599
that cult following is enough to start

0:45:05.760,0:45:09.599
your own social network

0:45:07.599,0:45:11.200
bring all those people on board and then

0:45:09.599,0:45:14.640
sell those users even

0:45:11.200,0:45:18.000
the social network itself is

0:45:14.640,0:45:19.920
outdated technology is 90 years old

0:45:18.000,0:45:21.040
they’re selling eyes at that point in

0:45:19.920,0:45:24.000
time and that’s

0:45:21.040,0:45:27.359
generally not how business is done

0:45:24.000,0:45:30.240
because in most cases traditionally

0:45:27.359,0:45:32.400
the consumer isn’t the product yeah the

0:45:30.240,0:45:34.240
product is something you produce

0:45:32.400,0:45:36.800
but in the case of technology and social

0:45:34.240,0:45:38.240
media today the consumer is the product

0:45:36.800,0:45:40.319
because that’s where people are making

0:45:38.240,0:45:42.000
money with all your information

0:45:40.319,0:45:44.000
so it kind of breaks the rules and

0:45:42.000,0:45:46.560
that’s why we kind of have an

0:45:44.000,0:45:47.920
upset balance here so we’re going to

0:45:46.560,0:45:50.960
take our last break here and we’re going

0:45:47.920,0:45:53.119
to come back and look at the future of

0:45:50.960,0:46:00.110
regulating monopolies and why tech might

0:45:53.119,0:46:02.720
be different

0:46:00.110,0:46:05.200
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[Music]

0:47:04.160,0:47:07.680
welcome back to insights into tomorrow

0:47:06.000,0:47:09.280
we’re talking monopolies

0:47:07.680,0:47:10.960
and we’re going to talk about how to

0:47:09.280,0:47:11.760
regulate today’s monopolies in

0:47:10.960,0:47:14.160
tomorrow’s

0:47:11.760,0:47:16.319
market so when the global financial

0:47:14.160,0:47:17.599
crisis slowly subsided in the spring of

0:47:16.319,0:47:20.559
2010

0:47:17.599,0:47:22.720
tech giants google apple facebook and

0:47:20.559,0:47:24.559
amazon known collectively as

0:47:22.720,0:47:26.160
gaffa i’ve never heard that before i

0:47:24.559,0:47:28.000
haven’t either i didn’t write the

0:47:26.160,0:47:30.160
article though

0:47:28.000,0:47:31.920
they were collectively valued at just

0:47:30.160,0:47:35.119
under 450

0:47:31.920,0:47:35.839
billion euros by market cap these

0:47:35.119,0:47:38.640
companies

0:47:35.839,0:47:39.680
were drivers of innovation that pointed

0:47:38.640,0:47:41.200
the way forward

0:47:39.680,0:47:44.160
enterprises at the center of a

0:47:41.200,0:47:46.880
flourishing technological ecosystem

0:47:44.160,0:47:48.000
with a creative and technology driven

0:47:46.880,0:47:49.920
vision

0:47:48.000,0:47:51.760
over the past decade the transformation

0:47:49.920,0:47:52.559
of society’s relationship to those

0:47:51.760,0:47:55.520
companies

0:47:52.559,0:47:56.880
is unprecedented we use the products of

0:47:55.520,0:47:59.040
these companies to manage

0:47:56.880,0:48:00.559
almost our entire professional and

0:47:59.040,0:48:02.880
private lives

0:48:00.559,0:48:04.480
and during the coronavirus crisis the

0:48:02.880,0:48:07.520
value of the tech giants

0:48:04.480,0:48:11.359
have increased even more

0:48:07.520,0:48:12.880
so when we put together the idea of the

0:48:11.359,0:48:14.079
show these were really the companies

0:48:12.880,0:48:17.200
that were talking about

0:48:14.079,0:48:19.520
for today’s modern monopolies um

0:48:17.200,0:48:21.280
how do you feel about do you first let

0:48:19.520,0:48:22.640
me ask do you use their products i think

0:48:21.280,0:48:24.079
that’s probably the most important

0:48:22.640,0:48:26.000
question to ask anybody

0:48:24.079,0:48:27.680
yeah i mean it’s kind of hard not to

0:48:26.000,0:48:28.480
right at least like google and amazon

0:48:27.680,0:48:29.920
even

0:48:28.480,0:48:31.440
even if you don’t buy things from amazon

0:48:29.920,0:48:32.960
amazon still controls a lot of web

0:48:31.440,0:48:35.200
traffic too for their searches

0:48:32.960,0:48:36.800
so you’re using them either way but yet

0:48:35.200,0:48:38.079
i don’t use i don’t have any

0:48:36.800,0:48:39.599
i don’t think i have any apple products

0:48:38.079,0:48:40.880
anymore i did though for a while i was

0:48:39.599,0:48:42.640
an iphone user

0:48:40.880,0:48:44.800
um i have a facebook and instagram

0:48:42.640,0:48:46.559
account i don’t really use but i still

0:48:44.800,0:48:48.319
look at them so they’re getting you know

0:48:46.559,0:48:50.800
my eyes either way

0:48:48.319,0:48:52.319
and then google i use all their products

0:48:50.800,0:48:54.800
and services so yeah i’m

0:48:52.319,0:48:56.559
pretty far in yeah and i think one of

0:48:54.800,0:48:58.480
the biggest things to keep in mind here

0:48:56.559,0:49:02.319
is that these companies don’t just

0:48:58.480,0:49:04.559
influence the american economy the

0:49:02.319,0:49:07.040
these are global companies that have a

0:49:04.559,0:49:10.800
major impact on the world

0:49:07.040,0:49:12.559
so looking at the monopolies of tomorrow

0:49:10.800,0:49:15.760
i think we have to ask ourselves

0:49:12.559,0:49:17.359
probably a few questions and and

0:49:15.760,0:49:19.599
kind of come the turns with a few things

0:49:17.359,0:49:21.440
like one is how we handle the us

0:49:19.599,0:49:23.920
monopolies today

0:49:21.440,0:49:24.960
will dictate europe’s future and even to

0:49:23.920,0:49:26.559
a certain extent

0:49:24.960,0:49:28.400
the rest of the world don’t you think

0:49:26.559,0:49:30.880
yeah absolutely i mean i think that

0:49:28.400,0:49:31.440
in our modern age it’s all it’s a global

0:49:30.880,0:49:33.119
economy

0:49:31.440,0:49:34.319
it’s not as isolationist as it used to

0:49:33.119,0:49:35.359
be with things like standard oil and

0:49:34.319,0:49:37.040
things like that

0:49:35.359,0:49:38.720
yeah and i think the other thing is that

0:49:37.040,0:49:40.480
even though you know it’s hard to

0:49:38.720,0:49:43.440
envision but

0:49:40.480,0:49:45.119
the technological revolution isn’t over

0:49:43.440,0:49:48.880
we’re

0:49:45.119,0:49:51.200
kind of still in the early phases of it

0:49:48.880,0:49:52.160
and and i think one of the issues that

0:49:51.200,0:49:56.480
we’ve run into

0:49:52.160,0:49:58.240
is that we don’t make the rules as fast

0:49:56.480,0:49:58.800
as the technology grows would you agree

0:49:58.240,0:50:00.800
with that

0:49:58.800,0:50:02.720
yeah i mean just in the last i don’t

0:50:00.800,0:50:03.520
know five six years you had snapchat

0:50:02.720,0:50:05.520
show up which

0:50:03.520,0:50:07.599
blew up again and became a another

0:50:05.520,0:50:09.440
staple in the social media icon

0:50:07.599,0:50:11.200
you know on your phone that a lot of

0:50:09.440,0:50:12.000
people use and is now a publicly traded

0:50:11.200,0:50:13.440
company so i think

0:50:12.000,0:50:15.440
that we’re definitely going to see it

0:50:13.440,0:50:16.800
again tick tock as well also huge

0:50:15.440,0:50:18.480
so i think that you know every couple

0:50:16.800,0:50:19.520
years it’s you know just how these

0:50:18.480,0:50:20.480
things work you’ll get a whole new

0:50:19.520,0:50:22.559
social media app

0:50:20.480,0:50:24.079
or something along those lines yeah and

0:50:22.559,0:50:26.319
i think one of the issues

0:50:24.079,0:50:28.319
that concerns me is that the room for

0:50:26.319,0:50:30.400
maneuvering needed to figure all the

0:50:28.319,0:50:33.040
stuff out

0:50:30.400,0:50:33.520
is shrinking the time that we have to

0:50:33.040,0:50:35.760
put

0:50:33.520,0:50:36.800
measures in place now to govern these

0:50:35.760,0:50:40.480
things

0:50:36.800,0:50:42.319
is running out rapidly um

0:50:40.480,0:50:44.000
if we want to know what to do next it’s

0:50:42.319,0:50:45.920
vital that we gain some in-depth

0:50:44.000,0:50:48.240
understanding of the mechanisms by which

0:50:45.920,0:50:49.680
the tech monopolies operate

0:50:48.240,0:50:51.280
and i think part of the problem that we

0:50:49.680,0:50:53.280
have is that

0:50:51.280,0:50:56.000
the people in in our country at least

0:50:53.280,0:50:58.240
that are making these laws

0:50:56.000,0:51:00.160
don’t have a clue about technology yeah

0:50:58.240,0:51:01.520
i mean they really have no idea how it

0:51:00.160,0:51:04.160
works how it progresses

0:51:01.520,0:51:05.839
the impact that it has the security you

0:51:04.160,0:51:06.640
know there’s a lot of talk right now

0:51:05.839,0:51:09.040
about

0:51:06.640,0:51:11.280
cyber security because of the pipeline

0:51:09.040,0:51:13.599
hack and all these you know the the

0:51:11.280,0:51:14.640
uh microsoft exchange hack and the solar

0:51:13.599,0:51:17.680
winds all the stuff

0:51:14.640,0:51:20.160
this cyber security is in the news and

0:51:17.680,0:51:21.599
our politicians are are trying their

0:51:20.160,0:51:24.400
best really

0:51:21.599,0:51:25.040
to pay lip service to it but have no

0:51:24.400,0:51:27.920
idea

0:51:25.040,0:51:28.800
whatsoever what the technology means

0:51:27.920,0:51:30.559
like for instance

0:51:28.800,0:51:32.319
my biggest question you know sticking

0:51:30.559,0:51:34.800
with the pipeline

0:51:32.319,0:51:36.880
incident they got hit with ransomware

0:51:34.800,0:51:39.119
well why in the world was your pipeline

0:51:36.880,0:51:41.440
network even connected to the internet

0:51:39.119,0:51:43.040
absolutely no reason for that and yet

0:51:41.440,0:51:44.400
there isn’t a single politician who’s

0:51:43.040,0:51:45.599
asked that question yet because they

0:51:44.400,0:51:47.440
don’t understand they just think the

0:51:45.599,0:51:49.119
internet is some

0:51:47.440,0:51:51.119
nebulous piece of technology that

0:51:49.119,0:51:52.640
connects everything

0:51:51.119,0:51:55.760
and these are the people that are making

0:51:52.640,0:51:57.040
the laws what do you think about that

0:51:55.760,0:51:58.559
yeah i think that’s definitely part of

0:51:57.040,0:51:58.960
the problem i think you saw it too back

0:51:58.559,0:52:00.240
when

0:51:58.960,0:52:02.559
any new technology when it showed up

0:52:00.240,0:52:03.520
like tv like blew people’s minds and

0:52:02.559,0:52:04.640
they thought it was going to like you

0:52:03.520,0:52:06.079
know give you the devil

0:52:04.640,0:52:08.319
in you so i think it’s something like

0:52:06.079,0:52:09.760
this too and eventually

0:52:08.319,0:52:11.839
we’ll hopefully get or they’ll hopefully

0:52:09.760,0:52:12.960
catch up but i think the difference with

0:52:11.839,0:52:14.559
modern technology is that it’s

0:52:12.960,0:52:15.680
progressing way faster than things like

0:52:14.559,0:52:17.280
tv ever did

0:52:15.680,0:52:19.119
i mean it’s changing almost on a yearly

0:52:17.280,0:52:22.079
basis what the norms are

0:52:19.119,0:52:22.960
so i think that the pace is much more

0:52:22.079,0:52:25.599
accelerated

0:52:22.960,0:52:27.359
yeah so let’s let’s let’s you know take

0:52:25.599,0:52:30.640
a second to take a look at what

0:52:27.359,0:52:33.760
the current technol tech monopolies

0:52:30.640,0:52:35.760
are and and why they’re different

0:52:33.760,0:52:37.599
so i think the biggest thing and we’ve

0:52:35.760,0:52:39.920
touched on this already is that

0:52:37.599,0:52:42.079
tech monopolies survive on data and

0:52:39.920,0:52:45.440
algorithms that’s their product

0:52:42.079,0:52:47.760
you as the consumer are their product

0:52:45.440,0:52:50.079
they take your information and they sell

0:52:47.760,0:52:52.319
it for advertising

0:52:50.079,0:52:53.280
they’re not necessarily selling you

0:52:52.319,0:52:55.440
anything amazon

0:52:53.280,0:52:57.520
doesn’t make any money off anything that

0:52:55.440,0:52:59.920
it sells

0:52:57.520,0:53:01.839
from its store it’s literally a break

0:52:59.920,0:53:03.680
even it’s a loss leader for them

0:53:01.839,0:53:04.880
they make their money on their amazon

0:53:03.680,0:53:06.960
web services

0:53:04.880,0:53:08.960
which everybody hosts everything through

0:53:06.960,0:53:11.200
their amazon web services

0:53:08.960,0:53:12.960
which ironically was kind of an offshoot

0:53:11.200,0:53:14.720
for their own needs they had to build

0:53:12.960,0:53:16.480
out their own network to support the

0:53:14.720,0:53:18.000
amazon store

0:53:16.480,0:53:19.839
and they found out that they could rent

0:53:18.000,0:53:22.960
space on their cloud

0:53:19.839,0:53:25.280
and make more money but google

0:53:22.960,0:53:26.800
you’re the product they collect your

0:53:25.280,0:53:30.319
data

0:53:26.800,0:53:33.440
facebook you’re the product um amazon

0:53:30.319,0:53:35.520
you’re the product with apple

0:53:33.440,0:53:36.559
apple recognized this and now in the

0:53:35.520,0:53:39.839
latest version of

0:53:36.559,0:53:41.440
apple’s operating system

0:53:39.839,0:53:43.520
they implemented this new privacy

0:53:41.440,0:53:45.680
feature where applications have to

0:53:43.520,0:53:48.559
ask if you want them to track your

0:53:45.680,0:53:51.599
movement outside the application

0:53:48.559,0:53:54.720
which if you think about it

0:53:51.599,0:53:56.880
is almost a no-brainer like no

0:53:54.720,0:53:58.480
why do i want facebook tracking me in

0:53:56.880,0:54:00.720
other apps

0:53:58.480,0:54:02.160
but facebook is actually fighting this

0:54:00.720,0:54:03.839
to the point that they’re threatening

0:54:02.160,0:54:06.000
legal action

0:54:03.839,0:54:08.800
because they’re saying that it gives

0:54:06.000,0:54:11.440
apple an unfair advantage

0:54:08.800,0:54:13.440
so apple has access to that information

0:54:11.440,0:54:14.640
but facebook doesn’t so therefore apple

0:54:13.440,0:54:17.760
has an advantage

0:54:14.640,0:54:19.440
i mean i guess but it’s like jeez guys

0:54:17.760,0:54:21.119
it’s like just the two crazy

0:54:19.440,0:54:23.920
billionaires yelling at each other

0:54:21.119,0:54:24.800
for more money you know if you look at

0:54:23.920,0:54:26.640
the

0:54:24.800,0:54:29.280
companies in the 20th century their

0:54:26.640,0:54:32.000
wealth came from factories and machines

0:54:29.280,0:54:33.920
and employee qualified employees and the

0:54:32.000,0:54:37.280
stuff that they made

0:54:33.920,0:54:38.000
that consumers purchased so it was much

0:54:37.280,0:54:41.520
easier

0:54:38.000,0:54:44.480
to say okay well you’re not innovating

0:54:41.520,0:54:45.839
cars fast enough you’re not innovating

0:54:44.480,0:54:47.599
um

0:54:45.839,0:54:49.359
refrigerators or whatever it happened to

0:54:47.599,0:54:51.680
be because you had

0:54:49.359,0:54:53.359
an actual defined product how do you

0:54:51.680,0:54:56.559
tell when you’re

0:54:53.359,0:54:59.040
not innovating services

0:54:56.559,0:54:59.760
enough if the consumer’s the product

0:54:59.040,0:55:02.000
like like

0:54:59.760,0:55:02.799
what’s the answer to that question i

0:55:02.000,0:55:04.880
mean

0:55:02.799,0:55:06.079
then we get into a question of privacy

0:55:04.880,0:55:07.599
right because the only way to innovate

0:55:06.079,0:55:10.000
that is to become more intrusive in

0:55:07.599,0:55:10.960
people’s lives and to collect more data

0:55:10.000,0:55:13.359
on them and then

0:55:10.960,0:55:15.200
that’s a whole other can of worms of of

0:55:13.359,0:55:16.880
where you draw that line of

0:55:15.200,0:55:18.400
if it’s just you’re purely just a

0:55:16.880,0:55:19.839
product at that point and

0:55:18.400,0:55:22.640
the the human element is completely

0:55:19.839,0:55:25.040
removed absolutely

0:55:22.640,0:55:26.880
so over the past decade the big tech

0:55:25.040,0:55:28.480
companies have built a huge competitive

0:55:26.880,0:55:30.480
advantage because they control the

0:55:28.480,0:55:32.160
operating systems and the search engines

0:55:30.480,0:55:33.440
and the browsers and all the cloud

0:55:32.160,0:55:35.760
infrastructure

0:55:33.440,0:55:37.599
they also own the shopping marketplaces

0:55:35.760,0:55:39.839
the communications platforms

0:55:37.599,0:55:41.680
the network household appliances and the

0:55:39.839,0:55:43.359
app stores

0:55:41.680,0:55:44.960
to return to our picture of the 20th

0:55:43.359,0:55:47.680
century tech monopolies

0:55:44.960,0:55:48.000
not only have factories and machines

0:55:47.680,0:55:50.640
they

0:55:48.000,0:55:53.119
also increasingly own the entire

0:55:50.640,0:55:55.920
infrastructure of the value creation

0:55:53.119,0:55:57.760
chain including all the businesses and

0:55:55.920,0:56:01.280
all the communication channels

0:55:57.760,0:56:04.400
to the customer which being that

0:56:01.280,0:56:06.720
ingrained and essentially owning control

0:56:04.400,0:56:09.200
of the economy

0:56:06.720,0:56:10.480
makes it almost impossible to regulate

0:56:09.200,0:56:11.839
them don’t you agree

0:56:10.480,0:56:14.079
yeah i mean it’s almost like it’s too

0:56:11.839,0:56:16.000
late um it reminds me of and this is

0:56:14.079,0:56:17.359
sort of related but movies uh

0:56:16.000,0:56:19.119
they used to be there was a big

0:56:17.359,0:56:20.720
paramount decision like the 30s

0:56:19.119,0:56:22.720
because their own distribution

0:56:20.720,0:56:23.680
production and exhibition which was like

0:56:22.720,0:56:24.960
movie theaters

0:56:23.680,0:56:26.319
and that’s what this reminds me of

0:56:24.960,0:56:27.119
they’re owning every single step of the

0:56:26.319,0:56:29.680
chain

0:56:27.119,0:56:31.119
which is a monopoly but in this instance

0:56:29.680,0:56:31.760
they’re way too powerful to be stopped

0:56:31.119,0:56:34.960
at this point

0:56:31.760,0:56:37.599
right and you know the capital

0:56:34.960,0:56:38.240
that the big tech companies suck out of

0:56:37.599,0:56:40.319
the system

0:56:38.240,0:56:43.280
using this mechanism is fed straight

0:56:40.319,0:56:46.880
back in undermining the competition

0:56:43.280,0:56:49.280
or accessing new areas of business

0:56:46.880,0:56:51.040
vendors on amazon’s marketplace are just

0:56:49.280,0:56:53.200
as dependent on the goodwill of the

0:56:51.040,0:56:55.119
platform as media companies are on

0:56:53.200,0:56:57.680
google and facebook

0:56:55.119,0:57:00.000
this goodwill can only be acquired by

0:56:57.680,0:57:01.599
consistently providing access to all

0:57:00.000,0:57:04.000
content and data

0:57:01.599,0:57:05.599
thus continuing to feed the monopoly and

0:57:04.000,0:57:08.160
making it more efficient

0:57:05.599,0:57:10.000
so even for competition the work they

0:57:08.160,0:57:11.359
have to cooperate with the big tech and

0:57:10.000,0:57:13.440
provide the big tech

0:57:11.359,0:57:15.200
exactly what they need to give the big

0:57:13.440,0:57:16.720
tech the authority university

0:57:15.200,0:57:17.440
competition and quotes there a little

0:57:16.720,0:57:20.880
bit

0:57:17.440,0:57:22.400
exactly exactly so the enormous

0:57:20.880,0:57:23.119
profitability of the infrastructure

0:57:22.400,0:57:25.280
services

0:57:23.119,0:57:26.720
allows the big tech companies to invest

0:57:25.280,0:57:30.160
in new fields of business

0:57:26.720,0:57:32.160
on a very long term basis to do this

0:57:30.160,0:57:34.480
the monopolists are willing to accept

0:57:32.160,0:57:36.240
high losses for many years

0:57:34.480,0:57:38.720
in order to weaken the competition and

0:57:36.240,0:57:42.079
build up market shares

0:57:38.720,0:57:46.480
it’s ironic what amazon is doing

0:57:42.079,0:57:49.359
because amazon is doing online

0:57:46.480,0:57:50.720
in the marketplace exactly what walmart

0:57:49.359,0:57:54.000
did

0:57:50.720,0:57:56.720
so walmart had this reputation

0:57:54.000,0:57:58.480
for buying everything in bulk and

0:57:56.720,0:57:59.760
selling it very cheap with very little

0:57:58.480,0:58:02.559
overhead

0:57:59.760,0:58:04.480
and they would come into a town and they

0:58:02.559,0:58:05.680
would open up a mega store

0:58:04.480,0:58:07.520
and they put all the other small

0:58:05.680,0:58:09.200
mom-and-pop businesses out of out of

0:58:07.520,0:58:11.280
business because they couldn’t compete

0:58:09.200,0:58:14.720
they didn’t have this the economy of

0:58:11.280,0:58:14.720
scale to compete with walmart

0:58:14.960,0:58:18.960
amazon now shows up and they started out

0:58:17.280,0:58:20.640
selling books at first and they changed

0:58:18.960,0:58:22.240
the way we bought books

0:58:20.640,0:58:24.000
well it wasn’t long before they started

0:58:22.240,0:58:26.799
selling everything

0:58:24.000,0:58:27.920
and now not only do they sell everything

0:58:26.799,0:58:29.760
you can get it

0:58:27.920,0:58:31.680
delivered in two days for free if you’re

0:58:29.760,0:58:33.839
an amazon prime member

0:58:31.680,0:58:36.799
you can get it delivered the next day if

0:58:33.839,0:58:40.000
you’re in certain geographic locations

0:58:36.799,0:58:42.799
they basically are putting

0:58:40.000,0:58:43.839
companies like am like walmart out of

0:58:42.799,0:58:45.440
business

0:58:43.839,0:58:47.599
because they can sell it cheaper than

0:58:45.440,0:58:48.960
walmart and that’s not even

0:58:47.599,0:58:50.799
counting all the other services they

0:58:48.960,0:58:51.839
provide too like they’re you know

0:58:50.799,0:58:54.319
they’re video streaming

0:58:51.839,0:58:56.160
services as a competitor to netflix i

0:58:54.319,0:58:57.760
mean they’re they’re omnipresent

0:58:56.160,0:58:58.880
yeah yeah i mean they’re they’re

0:58:57.760,0:58:59.839
literally everywhere they’re in the

0:58:58.880,0:59:01.359
music

0:58:59.839,0:59:03.440
yeah they’re in they’re producing their

0:59:01.359,0:59:04.720
own tv shows they’re producing their own

0:59:03.440,0:59:08.160
movies that they’re putting up

0:59:04.720,0:59:10.480
for awards they’re selling goods

0:59:08.160,0:59:13.119
there’s a situation there’s several

0:59:10.480,0:59:16.160
situations amazon’s been involved in

0:59:13.119,0:59:17.680
where they’ve had

0:59:16.160,0:59:19.359
people on their service because you can

0:59:17.680,0:59:21.119
sell through amazon so they’ve had

0:59:19.359,0:59:22.240
people on their service that were

0:59:21.119,0:59:25.760
selling

0:59:22.240,0:59:28.400
i think one was diapers.com um

0:59:25.760,0:59:30.319
they were selling uh low overhead

0:59:28.400,0:59:32.559
diapers through amazon

0:59:30.319,0:59:33.920
well amazon decided that they were now

0:59:32.559,0:59:36.000
going to sell diapers

0:59:33.920,0:59:38.799
and they would buy their diapers in much

0:59:36.000,0:59:42.079
larger bulk than diapers.com could

0:59:38.799,0:59:43.839
and they would sell them at below cost

0:59:42.079,0:59:45.440
they could take the loss because they

0:59:43.839,0:59:46.640
had plenty of other profit leaders

0:59:45.440,0:59:47.920
elsewhere that they could absorb it

0:59:46.640,0:59:49.359
through

0:59:47.920,0:59:50.880
and eventually they got to the point

0:59:49.359,0:59:51.920
where they put this company out of

0:59:50.880,0:59:53.760
business

0:59:51.920,0:59:55.359
and that’s a practice that they’ve done

0:59:53.760,0:59:58.079
over and over again

0:59:55.359,0:59:59.599
and it isn’t like diapers.com was

0:59:58.079,1:00:01.280
bringing in so much money selling

0:59:59.599,1:00:03.920
diapers that it was

1:00:01.280,1:00:06.000
a threat to amazon so there was no

1:00:03.920,1:00:07.359
reason to put them out of business

1:00:06.000,1:00:09.040
amazon simply wanted to own that

1:00:07.359,1:00:11.040
business and now they do yeah

1:00:09.040,1:00:13.119
i guess i guess for them even if there

1:00:11.040,1:00:14.799
was a chance a one percent chance that

1:00:13.119,1:00:15.760
diapers.com could have taken over the

1:00:14.799,1:00:17.200
diaper industry

1:00:15.760,1:00:18.799
they had to take that as an absolute

1:00:17.200,1:00:20.720
certainty yeah and they did

1:00:18.799,1:00:22.640
and that’s really what the scary thing

1:00:20.720,1:00:22.960
is with these monopolies today is that

1:00:22.640,1:00:25.200
they

1:00:22.960,1:00:27.359
have that ability you know they could

1:00:25.200,1:00:28.720
literally give their products away for

1:00:27.359,1:00:30.960
six months

1:00:28.720,1:00:32.799
and put everyone else out of business so

1:00:30.960,1:00:35.119
that they’re the only one left after six

1:00:32.799,1:00:37.680
months they could absorb that loss

1:00:35.119,1:00:39.280
and now that bottle of water that cost

1:00:37.680,1:00:42.000
you a dollar before it will cost you ten

1:00:39.280,1:00:44.960
dollars because you don’t have a choice

1:00:42.000,1:00:46.319
which is kind of scary so let’s talk a

1:00:44.960,1:00:48.960
little bit about where we

1:00:46.319,1:00:50.319
think the future of monopolies is going

1:00:48.960,1:00:52.160
and we can sort of sum up this

1:00:50.319,1:00:54.720
discussion

1:00:52.160,1:00:56.799
so i jotted down a few talking points

1:00:54.720,1:00:58.640
here i want to bounce them off of you

1:00:56.799,1:01:00.799
um my first point is that technology

1:00:58.640,1:01:02.319
moves faster than legislation is that

1:01:00.799,1:01:03.760
something that you would agree with

1:01:02.319,1:01:06.000
yeah we already talked about that in

1:01:03.760,1:01:07.520
terms of i compared it to television but

1:01:06.000,1:01:09.839
yeah absolutely especially today it’s

1:01:07.520,1:01:11.520
moving even faster than you know

1:01:09.839,1:01:13.200
people in charge of making laws and

1:01:11.520,1:01:15.920
politicians can even fathom

1:01:13.200,1:01:17.359
yeah and and today’s monopolies are more

1:01:15.920,1:01:20.240
complicated

1:01:17.359,1:01:22.079
than railroads and telephones ever were

1:01:20.240,1:01:24.000
uh there’s more of an international

1:01:22.079,1:01:26.319
impact from today’s monopolies than ever

1:01:24.000,1:01:27.920
before

1:01:26.319,1:01:29.520
how what kind of impact do you think

1:01:27.920,1:01:32.480
that will have on

1:01:29.520,1:01:34.000
regulating these companies that are too

1:01:32.480,1:01:36.000
big to fail moving forward

1:01:34.000,1:01:37.839
i think we’re going to have to change

1:01:36.000,1:01:38.480
the notion of a product right because

1:01:37.839,1:01:39.839
they’re not

1:01:38.480,1:01:42.000
it’s not a tangible thing that you can

1:01:39.839,1:01:43.040
get it’s it’s data it’s information

1:01:42.000,1:01:44.240
that’s being sold

1:01:43.040,1:01:46.319
so i think that’s going to be the first

1:01:44.240,1:01:47.280
step in in really making some serious

1:01:46.319,1:01:49.119
change on how to

1:01:47.280,1:01:50.480
to stop these monopolies is changing

1:01:49.119,1:01:52.880
what we view as

1:01:50.480,1:01:54.240
you know the product do you think from a

1:01:52.880,1:01:55.680
domestic standpoint

1:01:54.240,1:01:57.039
that the us government should be

1:01:55.680,1:01:59.039
regulating these or do you think we

1:01:57.039,1:02:00.240
should be turning that sort of authority

1:01:59.039,1:02:03.119
over to

1:02:00.240,1:02:04.160
the world trade organization or or

1:02:03.119,1:02:07.200
something

1:02:04.160,1:02:08.799
on a bigger scale uh i think

1:02:07.200,1:02:10.960
the government the us government should

1:02:08.799,1:02:12.640
step in and then do it because these are

1:02:10.960,1:02:14.000
united states-based companies and i

1:02:12.640,1:02:15.280
think that there’s a degree of

1:02:14.000,1:02:16.799
responsibility there

1:02:15.280,1:02:18.400
now in reality that’s probably not going

1:02:16.799,1:02:19.440
to happen because they have really no

1:02:18.400,1:02:21.039
reason to

1:02:19.440,1:02:22.559
uh especially because like we’ve said a

1:02:21.039,1:02:24.640
bunch of times that these companies are

1:02:22.559,1:02:28.079
already way too powerful to be regulated

1:02:24.640,1:02:28.559
um but maybe if uh you know the world

1:02:28.079,1:02:30.640
trade

1:02:28.559,1:02:32.079
organization and the us government you

1:02:30.640,1:02:33.200
know teamed up i don’t really know how

1:02:32.079,1:02:36.880
that works in terms of

1:02:33.200,1:02:38.400
of law um but perhaps you know that

1:02:36.880,1:02:40.160
level of force would would get something

1:02:38.400,1:02:42.720
done

1:02:40.160,1:02:43.359
i could certainly see that i could see

1:02:42.720,1:02:44.960
you know

1:02:43.359,1:02:46.559
even if you go regionally with things

1:02:44.960,1:02:48.240
like the european union

1:02:46.559,1:02:50.319
and stuff like that where you might be

1:02:48.240,1:02:52.000
able to regulate that

1:02:50.319,1:02:53.200
let’s talk penalties for a minute so we

1:02:52.000,1:02:54.400
already kind of talked about the fact

1:02:53.200,1:02:55.760
that the penalties that are being

1:02:54.400,1:02:59.119
imposed on these companies are

1:02:55.760,1:03:01.599
are really insignificant how do you

1:02:59.119,1:03:03.200
punish a company for monopolistic

1:03:01.599,1:03:06.160
practices

1:03:03.200,1:03:08.079
when they have economies larger than

1:03:06.160,1:03:10.960
most countries in the world

1:03:08.079,1:03:12.319
it’s really hard to uh i mean i’m i was

1:03:10.960,1:03:13.280
thinking of something like when they

1:03:12.319,1:03:15.039
broke up at

1:03:13.280,1:03:16.880
t but how are we going to break up

1:03:15.039,1:03:18.000
amazon right i mean

1:03:16.880,1:03:19.359
i guess you could do it where like they

1:03:18.000,1:03:20.880
own whole foods so whole foods would

1:03:19.359,1:03:22.160
then become its own company again maybe

1:03:20.880,1:03:23.920
something like that would work

1:03:22.160,1:03:25.520
or all the different independent sellers

1:03:23.920,1:03:27.280
that they’ve tried to acquire like our

1:03:25.520,1:03:28.720
diapers.com example

1:03:27.280,1:03:30.559
breaking those up and making them their

1:03:28.720,1:03:32.480
own independent companies but then

1:03:30.559,1:03:33.760
logistically they’re not going to

1:03:32.480,1:03:34.559
succeed because they’re not on the

1:03:33.760,1:03:36.559
amazon app

1:03:34.559,1:03:37.760
which is what everybody’s using so it’s

1:03:36.559,1:03:39.680
it’s a

1:03:37.760,1:03:41.280
very difficult thing that uh you know

1:03:39.680,1:03:42.240
i’m not an economist so i have no idea

1:03:41.280,1:03:44.400
how you’d even begin

1:03:42.240,1:03:46.000
i mean more money would be ideal but

1:03:44.400,1:03:47.200
like you said they’re bigger than some

1:03:46.000,1:03:48.880
small countries

1:03:47.200,1:03:50.559
so how much money can you realistically

1:03:48.880,1:03:51.839
find them right

1:03:50.559,1:03:54.240
and and the last thing that i want to

1:03:51.839,1:03:56.480
throw out there is one that

1:03:54.240,1:03:58.720
it seems to seep into every conversation

1:03:56.480,1:04:01.200
that we have and that’s politics

1:03:58.720,1:04:02.799
you know you have governments that

1:04:01.200,1:04:05.440
benefit too much from

1:04:02.799,1:04:07.839
monopolies you know the number of people

1:04:05.440,1:04:10.240
that amazon employs

1:04:07.839,1:04:11.599
uh the impact it has on the economy and

1:04:10.240,1:04:13.520
the unemployment rate

1:04:11.599,1:04:14.799
and the amount of tax dollars that they

1:04:13.520,1:04:17.839
get from these companies

1:04:14.799,1:04:21.119
is vast

1:04:17.839,1:04:24.160
you have politicians whose constituents

1:04:21.119,1:04:27.039
are benefiting by having you know

1:04:24.160,1:04:28.160
amazon recently had a big competition

1:04:27.039,1:04:29.520
about where they’re going to put their

1:04:28.160,1:04:32.480
new headquarters

1:04:29.520,1:04:33.359
and you had companies or you had cities

1:04:32.480,1:04:36.319
rather

1:04:33.359,1:04:36.640
that were vying for it offering up you

1:04:36.319,1:04:39.359
know

1:04:36.640,1:04:40.000
tax incentives and everything almost

1:04:39.359,1:04:41.680
like it was the

1:04:40.000,1:04:43.599
olympics and you had people vying for

1:04:41.680,1:04:45.760
the olympics they were

1:04:43.599,1:04:48.160
they were politicians falling all over

1:04:45.760,1:04:51.039
each other to try to get amazon in their

1:04:48.160,1:04:52.079
in their districts when you have that

1:04:51.039,1:04:53.760
kind of power

1:04:52.079,1:04:55.359
that you have politicians that are

1:04:53.760,1:04:57.280
catering to you

1:04:55.359,1:04:58.880
and and mind you we talk about corrupt

1:04:57.280,1:05:00.480
politicians and the fact that the united

1:04:58.880,1:05:01.599
states has the best politicians money

1:05:00.480,1:05:03.839
can buy

1:05:01.599,1:05:05.520
all the time here but when you have

1:05:03.839,1:05:06.079
politicians that are falling all over

1:05:05.520,1:05:09.520
themselves

1:05:06.079,1:05:10.480
without you even gracing their palm with

1:05:09.520,1:05:11.920
any money

1:05:10.480,1:05:13.680
just the fact that you’re bringing that

1:05:11.920,1:05:15.359
kind of business and economic benefit to

1:05:13.680,1:05:16.880
their districts

1:05:15.359,1:05:19.200
how are you going to have these same

1:05:16.880,1:05:20.880
politicians now regulate these companies

1:05:19.200,1:05:22.240
and break them up and try to push some

1:05:20.880,1:05:24.400
control over them

1:05:22.240,1:05:26.240
how do you get past the politics of it i

1:05:24.400,1:05:27.200
mean you don’t really i mean this

1:05:26.240,1:05:28.880
reminds me of

1:05:27.200,1:05:30.559
we studied a lot of the around the

1:05:28.880,1:05:32.799
sherman antitrust time those

1:05:30.559,1:05:34.640
politics of that time in high school and

1:05:32.799,1:05:36.480
there was a lot of cartoons of like

1:05:34.640,1:05:37.920
a big octopus that was standard oil that

1:05:36.480,1:05:39.039
would like have its tentacles in

1:05:37.920,1:05:40.000
politics and this is kind of what that

1:05:39.039,1:05:43.280
reminds me of

1:05:40.000,1:05:45.359
um except that i think today

1:05:43.280,1:05:46.880
while everybody knows about amazon’s

1:05:45.359,1:05:48.240
like how poorly they treat their workers

1:05:46.880,1:05:49.599
and things like that and the

1:05:48.240,1:05:51.280
you know the accidents that have

1:05:49.599,1:05:53.520
happened on the company lines

1:05:51.280,1:05:55.359
i still think amazon is still viewed

1:05:53.520,1:05:57.200
publicly very positively

1:05:55.359,1:05:58.480
because of their convenience right so i

1:05:57.200,1:05:59.359
think that that’s going to be a major

1:05:58.480,1:06:00.960
step too

1:05:59.359,1:06:03.359
because the politicians associated with

1:06:00.960,1:06:04.480
amazon aren’t like as nefarious as they

1:06:03.359,1:06:05.520
were when they were associated with

1:06:04.480,1:06:07.200
standard oil

1:06:05.520,1:06:08.559
so it’s a matter of public perception of

1:06:07.200,1:06:09.920
even having the pressure on the

1:06:08.559,1:06:10.880
politicians in the first place to make

1:06:09.920,1:06:13.680
the change

1:06:10.880,1:06:14.160
i think you’re right i mean i’m a amazon

1:06:13.680,1:06:18.799
user

1:06:14.160,1:06:22.480
yeah i’m a google user i’m a apple user

1:06:18.799,1:06:24.240
i don’t use facebook um the shows on

1:06:22.480,1:06:25.920
facebook but i don’t manage that i don’t

1:06:24.240,1:06:27.760
log into facebook

1:06:25.920,1:06:30.160
and the problem i have is i know these

1:06:27.760,1:06:32.480
companies are problems

1:06:30.160,1:06:33.760
but i still use them and i will continue

1:06:32.480,1:06:37.039
to use them

1:06:33.760,1:06:40.079
um they’re not

1:06:37.039,1:06:41.039
evil enough for me to not facebook is

1:06:40.079,1:06:42.960
evil enough

1:06:41.039,1:06:44.960
facebook to me is is accessible so i

1:06:42.960,1:06:47.039
won’t use facebook

1:06:44.960,1:06:49.039
but these other companies provide

1:06:47.039,1:06:51.440
benefit to me

1:06:49.039,1:06:52.559
and i don’t personally feel the

1:06:51.440,1:06:55.280
detriment

1:06:52.559,1:06:57.920
that’s associated with them so it’s very

1:06:55.280,1:06:59.839
hard for me to even advocate

1:06:57.920,1:07:02.000
breaking them up or cracking down on

1:06:59.839,1:07:05.200
them or whatever

1:07:02.000,1:07:06.480
so unfortunately i don’t have any

1:07:05.200,1:07:08.000
answers myself

1:07:06.480,1:07:09.280
yeah it’s a it’s an interesting moral

1:07:08.000,1:07:10.319
question and i think we get that with a

1:07:09.280,1:07:11.680
lot of industries

1:07:10.319,1:07:13.520
if you really look into them they’re all

1:07:11.680,1:07:14.240
evil in their own ways right but it’s a

1:07:13.520,1:07:16.480
matter of

1:07:14.240,1:07:18.000
of your daily life and when what’s one

1:07:16.480,1:07:20.160
person gonna do

1:07:18.000,1:07:21.839
that if one person were to stop using

1:07:20.160,1:07:23.520
this product realistically how many

1:07:21.839,1:07:24.799
products would they have to stop using

1:07:23.520,1:07:25.920
you have to stop using the internet and

1:07:24.799,1:07:27.039
probably if you wanted to stop

1:07:25.920,1:07:28.880
benefiting amazon

1:07:27.039,1:07:29.920
if you cannot buy amazon products but

1:07:28.880,1:07:30.799
you’re still going to benefit them in

1:07:29.920,1:07:32.559
some way

1:07:30.799,1:07:34.880
that’s it goes back to their their omni

1:07:32.559,1:07:36.319
presence yeah you’re absolutely right

1:07:34.880,1:07:38.799
i think this is probably one of the

1:07:36.319,1:07:40.960
first episodes that we’ve done

1:07:38.799,1:07:42.079
where our future look didn’t really have

1:07:40.960,1:07:43.920
a path forward

1:07:42.079,1:07:45.599
i don’t think any of us either of us

1:07:43.920,1:07:46.880
have any answer on how to solve this

1:07:45.599,1:07:48.079
moving forward it’s wally

1:07:46.880,1:07:49.280
they’re gonna become by and large we’re

1:07:48.079,1:07:50.880
gonna have to fly off the planet because

1:07:49.280,1:07:51.440
all the amazon boxes are stacked up in

1:07:50.880,1:07:53.920
the cities

1:07:51.440,1:07:55.680
there you go there you go so i think

1:07:53.920,1:07:57.119
that that’s kind of all we can add to

1:07:55.680,1:07:58.480
this discussion today i think that was

1:07:57.119,1:08:00.640
all we had today did you have anything

1:07:58.480,1:08:03.039
else you wanted to add nope

1:08:00.640,1:08:04.480
uh well thank you for listening folks uh

1:08:03.039,1:08:06.559
before we go i would uh

1:08:04.480,1:08:07.680
invite folks to subscribe to the podcast

1:08:06.559,1:08:10.160
you can get

1:08:07.680,1:08:11.280
video versions of the podcast if you

1:08:10.160,1:08:13.119
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1:08:11.280,1:08:15.440
into things that will give you video

1:08:13.119,1:08:17.679
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1:08:15.440,1:08:19.199
if you just want audio episodes of this

1:08:17.679,1:08:20.319
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1:08:19.199,1:08:22.560
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1:08:20.319,1:08:24.319
we’re available on apple podcast spotify

1:08:22.560,1:08:27.839
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1:08:24.319,1:08:30.159
i heart radio amazon

1:08:27.839,1:08:30.159
google

1:08:30.880,1:08:34.159
yes all those evil people yeah i would

1:08:33.600,1:08:37.759
also

1:08:34.159,1:08:39.520
encourage folks to contact us you can

1:08:37.759,1:08:40.960
give us some suggestions on what topics

1:08:39.520,1:08:42.640
you’d like us to discuss

1:08:40.960,1:08:44.799
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1:08:42.640,1:08:47.440
we’ve done you can email us at comments

1:08:44.799,1:08:49.440
at insightsintothings.com

1:08:47.440,1:08:50.640
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1:08:49.440,1:08:54.080
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1:08:50.640,1:08:55.040
we stream five days a week this week six

1:08:54.080,1:08:58.400
days a week on

1:08:55.040,1:08:59.920
twitch at twitch dot tv slash insights

1:08:58.400,1:09:03.120
into things if you are an

1:08:59.920,1:09:04.239
amazon prime subscriber uh you do get a

1:09:03.120,1:09:05.920
free twitch prime

1:09:04.239,1:09:07.920
monthly subscription we’d appreciate if

1:09:05.920,1:09:10.719
you threw that our way

1:09:07.920,1:09:11.770
on facebook we are facebook.com should

1:09:10.719,1:09:13.440
have plugged the shows in the beginning

1:09:11.770,1:09:15.279
[Laughter]

1:09:13.440,1:09:16.560
yes we are part of the problem i i

1:09:15.279,1:09:18.480
understand that

1:09:16.560,1:09:20.000
uh we have no that’s a that’s another

1:09:18.480,1:09:22.080
byproduct of the monopolies

1:09:20.000,1:09:23.839
we have no other way to get our products

1:09:22.080,1:09:25.279
out there without using them

1:09:23.839,1:09:27.600
but on facebook you can get us at

1:09:25.279,1:09:28.799
facebook.com insights into things

1:09:27.600,1:09:30.799
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1:09:28.799,1:09:33.359
and on instagram we write insights into

1:09:30.799,1:09:36.480
things or you can go to our website

1:09:33.359,1:09:36.799
at http://www.insightsintothings.com for links

1:09:36.480,1:09:39.920
to

1:09:36.799,1:09:41.120
all of those things anything else before

1:09:39.920,1:09:42.960
we go any closing thoughts

1:09:41.120,1:09:46.000
no that’s i think that’s it all right

1:09:42.960,1:09:47.440
the world is owned by the monopolies

1:09:46.000,1:09:49.040
it’s a good game too you should try

1:09:47.440,1:09:52.480
playing it

1:09:49.040,1:09:56.320
that’s all for this week this month or

1:09:52.480,1:09:59.040
whenever we do another one uh

1:09:56.320,1:10:01.360
any closing words no we’ll see you next

1:09:59.040,1:10:04.719
time folks

1:10:01.360,1:10:04.719
that’s it another one of the books

1:10:14.840,1:10:17.840
goodbye

1:10:28.840,1:10:31.840
so

1:10:39.360,1:10:41.440
you

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