<i>"I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good."</i><p>A market in which buyers are not free to choose better products is not a free market.<p>A market in which new entrants cannot compete <i>fairly</i> against established players is not a free market.<p>A market in which innovators have to get permission and pay established players for "access" (think ISPs) is not a free market.<p>And yes, a market in which economic and political power is concentrated in large corporations geographically clustered in a handful of giant metropolitan areas... is also not a free market.<p>Those corporations have both strong incentives and the means to change the rules of competition to their advantage.
Highly relevant: Matt Stoller in The Atlantic:<p>"How Democrats Killed Their Populist Soul
In the 1970s, a new wave of post-Watergate liberals stopped fighting monopoly power. The result is an increasingly dangerous political system."<p><a href="https://www.theatlantic.com/politics/archive/2016/10/how-democrats-killed-their-populist-soul/504710/" rel="nofollow">https://www.theatlantic.com/politics/archive/2016/10/how-dem...</a>
Her two examples, the medical and agriculture sectors, are two of the most regulated industries around.<p>A lot of these "monopolies" result because of regulation pushed by combination of well-meaning and self interested people and corporations (see bootleggers and baptists).<p>Her examples suggest it'd be better to focus on the marriage between corporations and government, which allows companies to focus their energy on getting gov to hassle their competitors vs improving their own product.<p><a href="https://en.wikipedia.org/wiki/Bootleggers_and_Baptists" rel="nofollow">https://en.wikipedia.org/wiki/Bootleggers_and_Baptists</a>
Drive through many American small towns and it looks the exact same.<p>A strip mall with a Subway, a couple national fast food joints, and if you're big enough, Wal-Mart.<p>There are literally 1000s of towns with this copy and paste setup-- how could this not be detrimental when money is going to a huge corporation every time?
Multiple other comments in here about this particular niche that the subject of the story went into (medical supplies), but what came to mind to me was a similar story about how it's a similar situation with the golf ball market [1] and from many other stories with eyeglasses (Luxottica artificially dominates the market).<p>These are both cases where it's not so much anti-merger/monopoly law that's the culprit, but the general structure of the legal system that favors those with the larger pockets and forces out upstart manufacturers.<p>1 - <a href="http://www.golfdigest.com/story/ball-wars-costco-files-lawsuit-against-acushnet" rel="nofollow">http://www.golfdigest.com/story/ball-wars-costco-files-lawsu...</a>
> In 1994, at the height of the AIDS crisis, in which I lost several friends and a beloved employee to the disease, I started a manufacturing company in Little Elm, about 35 miles north of Dallas, to produce the first-ever automatically retracting syringe to eliminate the risk of nurses contracting HIV through accidental needle sticks. The syringe received rave reviews from nurses, hospital executives and public health officials, a major grant from the National Institutes of Health and robust private investment. But when my partners and I tried to sell it to hospitals, we were told time and time again that even though it was a better product — a lifesaving product — they weren’t able to purchase it. The primary supplier of syringes, which controlled 80 percent of the market, structured an arrangement with a vast network of hospitals that essentially closed our industry to new firms for good.<p>That last bit sentence me a bit odd. Rather than go into the details of incentives of hospitals and why they would forgo a better alternative, the author just attributes it to "monopoly". If this is true, there is some deeper misalignment with incentives in this industry that won't go away by just removing product providers that control a significant portion of the market. Or something that the author doesn't know about the industry that would make this decision make sense.
Most legislation, counted in line or pages, is written by industry. Legislators aren't writing this themselves.<p>And there's little in the way of taking a strong anti-trust (competition law) in politics. The Obama administration watched over, and permitted mergers that very blatantly reduce competition: multiple airlines, and drug companies. And it was more aggressive overall in applying competition law compared to previous Republican administrations. So, point is, even with a Democratic president, competition law isn't pressed strongly enough, let alone with a Republican in office where it's apparently "we need to recognize more natural monopolies, and help them whenever possible".<p>About the only thing all Americans might be able to agree on when it comes to politics, is the increasingly obvious need for a constitutional amendment getting money out of politics.
Does anyone else think that nearly all huge companies exist due to monopolies or near-monopolies? MS has monopoly on desktops. Apple on cell phones and tablets. Facebook on social networking. Google on search. I think any market without at least 3-4 strong competitors will devolve into one dominant player who can milk more from the customer base.
Rural America could bust monopolies tomorrow if they voted differently. They've done it before, and they don't need to be rescued by us for that. More like they need to rescue themselves and the rest of us.
Welcome to the new world of corporate mercantilism.<p><a href="https://en.wikipedia.org/wiki/Mercantilism" rel="nofollow">https://en.wikipedia.org/wiki/Mercantilism</a>
I wonder if, without monopolies, rural areas would be served at all with the types goods and services that these companies bring them. It might not be economically feasible!
They need to deregulate the entire medical industry, so anyone can start a medical practice. Right now, doctors control the supply of new medical licenses, and they're incentivized to restrict the supply so their own wages go up. The official line is that they can ensure high-quality medical treatments this way, but that's just something they tell themselves to feel good about it.<p>One of the consequences is that doctors are beholden to large corporations who have teams of lawyers to handle legal issues and malpractice lawsuits. Since there are limited slots, some of them even work in foreign countries until they get experience to land a job in the US, which is a waste of talent.<p>If anyone could start a medical practice, a new syringe company could sell to smaller practices that haven't yet been mired in enterprise contracts.<p>Right now, in order to even build a hospital you have to submit "evidence of need" to the government to get approval. Imagine if every startup had to convince a bureaucrat that they were needed: fewer people would be interested in starting one.<p>It's probably worth considering moving medical negotiations from insurance companies and employers to the consumer. I don't know that it's very common to call up multiple doctors and find the one with the lowest price, because you're paying your insurance company to do the negotiation for you. Taxing employer-provided health insurance as income might remove the incentive for them to provide it at all. Together with deregulating the entire medical industry, it would make it possible to buy cheap treatment without insurance, which might be enough to make insurance less important.
I largely agree with the observations in the article although I believe the author misstates the intention of government with <i>"But in the 1980s, folks in power decided bigger was better, and conventional political wisdom followed suit."</i> The issue with the 80's was that the US economy was in a very weird place where we had low growth and very high inflation (called 'stagflation' at the time). The mechanics of the economy were adjusted not to make 'bigger better' but instead to break out of the state of stagnant inflation.<p>That the changes weren't undone in the 90s when much of the economic forces were re-aligned was a problem, but understandable since nobody wanted to go back to that mode. We are living in the opposite local minimum of growth and deflation where the economy is growing but inflation isn't happening because real income is going down.<p>That said I believe that making single supplier contracts unenforcable would be an interesting change to try.
Most 'monopolies' that exist today are artificial - This is because they are only monopolies to the extent that they are able to:<p>1. Keep buying up advertising to make sure that any potential competitor cannot afford eyeballs.<p>2. Keep hiring up as much technical talent as possible to make sure that any potential competitor doesn't get access to that talent in order to build a competing product.<p>3. Keep subsidising the cost of their own services (at a loss to themselves) in order to make the market non-viable for any potential competitor.<p>It's a scorched-earth approach.
Any company that has the money can create an artificial monopoly for themselves by engaging in any of the three activities above.<p>However, those activities are increasingly expensive because they drive up advertising costs and engineer salaries.<p>If companies keep doing this, eventually, they'll make the market non-viable even for themselves.
This is behind many (maybe most) of our problems in America. For example, this is the biggest source of what's wrong with our healthcare system.<p>Businesses have built up "moats" throughout the system, leading to high prices and poor service. This is the source of the "cost disease" that makes our healthcare too expensive.<p>Competition is part of the very foundation of capitalism. Without it, capitalism itself doesn't work. So we better figure out some answers.
I found this book rather interesting: <a href="https://en.wikipedia.org/wiki/Monopoly_Capital" rel="nofollow">https://en.wikipedia.org/wiki/Monopoly_Capital</a> it reflects over essentially the same problem (to make a Marxist critique to capitalist pretenses of freedom, fairness and its claims to optimality.) Among other points, the book spends time arguing how Corporate Capitalism is fundamentally monopolistic.
Apparently this is true not only of the US but also of Japan.<p>I just finished watching a nice dram series called 'Shitamachi Rocketto' which might be of interest to folk on HN.
As someone who loves rural USA and especially Texas, how could we spread the word better? How could we make it more attractive? Do you think there are other possibilities to revive it besides changing government policies? Let us brainstorm about it!
Arguably this also affects workers in major centers who have to move to high-cost housing areas just to be employed while not materially improving quality of life.
The article never establishes what is wrong with rural America in the first place. Why does it need rescuing? Why are businesses with large market share a problem for rural America? The premise that monopolies are bad is never explained.<p>The author never establishes any of this. How did this make it to the front page?
Or make it profitable to build shit in this country again. If you taxed the hell out of manufactured imports, and loosened up the regulations that are choking US businesses to death, you'd have less meth-and-fentanyl scourged abandoned mill towns.
No! Rural America is responsible for the death of millions, Rural America is the responsible for holding the progression of human race and most important: rural America is who created the monopolies.
Free market can only exist where states aren't.