From an ethical perspective, tech monopolies aren't a very good idea. However, from a purely economics standpoint, tech giants make up a not insignificant part of the US's GDP.
The classic argument for laws regulating monopolies/abuse of power is that overall this worsens what consumers and countries care about. Both that it lowers quality for consumers (lack of true competition) and slows growth by eliminating the push for new things/efficiencies.
> However, from a purely economics standpoint, tech giants make up a not insignificant part of the US's GDP.
Yes. It would surely be better to have a large field of non-giants competing for customers taking up the same proportion of GDP though right?
Large scale - in some things - allows for higher quality at lower prices since you divide the costs of designing and building between more people. For many complex things you have to be a large enterprise to build it. Building a reliable engine that meets modern emissions standards isn't possible for a single human, or even a small group - a large (monopoly) can make that investment and divide those costs between many customers and so the price is cheaper than a small company that would have to divide the costs between many less customers. Tech tends to be similarly complex and so needs are large investment in R&D to be acceptable, which in turn means that they need to be large to make the costs divided between all customers acceptable.
The real question is where do those competing considerations meet up. A monopoly is bad, but you can go too far in the other direction as well. I don't know how to decide what the best answer is (I'm not even aware of anyone who has made a useful argument for any particular compromise)
Those things are not linked. Large and monopoly are very different. Your example of engines is good, there isn't afaik a monopoly on building engines. Even a small number of huge auto makers are still competing against each other.
> A monopoly is bad, but you can go too far in the other direction as well. I don't know how to decide what the best answer is (I'm not even aware of anyone who has made a useful argument for any particular compromise)
I agree, I think the general aim with the EU makes sense which is about use of power in one field to control another. So google are good at search but that doesn't mean they get to make their own shopping attempt rank higher than others. If they have 90% of the search market then fine if that came from being better than everyone else but their shopping offering has to be better than others.
Disruptive tech monopolies upset entire existing industries for the sake of their owners/shareholders/employees, which is usually tiny compared to the said industries.
(Think of FB/Google advertisement centralisation as the end of other media providers.)
From an economics standpoint, does that make tech giants good, or does it make the US's GDP weaker since so much wealth is concentrated among so few players?
I keep wanting to push back on whether GDP is the best way to measure an economy, but most of the articles I find bring in concepts like "[GDP] doesn’t meaningfully account for successful management of priorities like public health, economic equity, climate action, or racial justice."[1] But you're making it clear you're talking from a purely economics standpoint. So pushing back on the ethics of applying GDP doesn't even apply.
> tech giants make up a not insignificant part of the US's GDP.
Indeed. So could the US reliance on these monopolies and tax-avoiders have anything to do with the US's relatively unimpressive growth compared with the EU?
But most of the US tech giants don't produce anything of value. They just suck out adverting money from companies that actually produce wealth. Its the same as the Germans 1944 GDP or Russians current. The numbers go high when you burn a tremendous amount of money.
There's lots of value in being able to influence huge portions of the population. The fact that you consider it morally wrong does not make it invaluable to others.
Agreed. Also just so you know, invaluable is one of those weird words that is intensified with in-, not negated. It means even more valuable, not worthless
Don't be so literal, it's a weak contribution. I think OP's sentiment is clearly along the lines of "disproportionate little value to humanity in regard to their economic power".
Ad companies like Google actually produce negative economic value, because advertising is a Red Queen's Race with no upper bound and every dollar wasted on advertising is a dollar that the company must recoup by increasing the price of the product, at absolutely no benefit to the consumer.
>But most of the US tech giants don't produce anything of value.
That doesn't really matter at the end of the day when you're discussing finances. All that matters for people, countries and governments in capitalism is that they have more money in their pockets than the rest, not how ethically that value gets generated or if their work produces much social value to society.
