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welp comments on Rationality Quotes Thread July 2015 - Less Wrong
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I am going to disagree vehemently with the notion that monopolies drive progress.
Telkom spent a long time as a fixed-line telecommunications monopoly, and South Africa still has terrible fixed-line internet costs as a result.
Monopolies, as far as I can see, will almost always relax once their monopoly is secure and just keep doing things the same way all the time, holding onto their monopoly. (Sometimes they will even attempt to squash competitors before they grow large enough to threaten said monopoly). Companies in competition, on the other hand, will improve their offerings and/or lower their prices in order to attract more customers. Therefore - and this is borne out by the Telkom example - I conclude that monopolies lead to stagnation, while healthy competition is more likely to lead to progress.
You're right, monopolies certainly don't drive progress. But the possibility of a monopoly can.
Progress requires R&D, and R&D is expensive and unpredictable. No one would want to do the type of long-term research that invigorates the economy or even creates brand new industries if they won't take in the lion's share of the profits. So it would be a bad idea to implement a policy of breaking up any and all monopolies, despite the fact that it is better in the moment (similar to Newcomb's problem). In fact, we actually institute monopolies using government power, via intellectual property.
Agreed. The attempt to reach a monopoly is a great driver of progress; it's only once a company reaches that state that it starts to hinder progress.