Messing with Market Forces: the evolution of competition.

Precis: Markets arise from competition. Antitrust law arises from the need for competition. Intellectual Property laws ought to protect the rights of those who create ideas. This essay arose from Roger’s comment about competition on Elias Isquith’s Walmart and the Welfare State essay.

retail jobs, like government jobs, don’t face competition from outside the US. Manufacturing jobs were killed when we messed with market forces.

What constitutes messing with market forces? It might begin with a discussion of competition itself.

Libertarians seem much-divided on the topic of monopoly and monopsony, though that assumption probably arises from my own ignorance. I’ve been looking at what Rothbard and Kinsella said against intellectual property rights from their perspective. Roderick Long is down on it, too. Cato seems to send mixed messages on this topic. The Austrians don’t seem to like antitrust legislation, concluding a monopoly will collapse under its own weight, but I’m not sure how this squares up with their notions of property. Property has to be more than tangible objects.

I suspect this is one of those Apples of the Hesperides questions: property of the gods. I’ve been looking into another branch of AI, modelling Too Big to Fail problems.

It started out with a thought about the relationships between predator and prey species. A predator has to look forward, binocular vision depends on it. A prey animal has a much wider field of view, at the expense of binocular vision. This seems to be true since the evolution of the eye itself.

The prey dinosaurs got awfully big. Their size saved them from the raptors but they had to reproduce in huge numbers to get that big. They also formed herds to cope, a pattern we still see in prey species.

But since the evolution of mammals, who started out small, predators and prey are substantially smaller. The larger predators, lions for instance, often steal kills from faster but smaller predators such as cheetahs and leopards. Why haven’t prey species gotten any larger than they have in recent times? Even elephants aren’t nearly as large as the prey dinosaurs. The one exception to this rule seems to be whales, who continue the strategy of Too Large to Kill.

If a firm is a society, what might give it dominance in its field? A smaller firm can easily outmanoeuvre a larger firm afflicted with much bureaucracy. But as with the larger predators, there’s a dominance hierarchy which lets lions steal from cheetahs. How much of this is tolerable in human endeavour?

Those who control the technology control the world. It’s lots easier to model dominance in a universe with fewer rules. Trouble is, a monopoly can last an awfully long time. Predators can form prides: collusion and price fixing are serious impediments to market evolution.

The only reason Linux remains a viable option is because it’s free. Never mind that it’s evolved to cope with an astonishing variety of roles. The fact that it’s a de-facto reference development platform hasn’t given it much traction on the desktop. Linux evolved around the desktop island: Microsoft remains Too Big to Kill in that space and Linux remains Too Nimble to Catch. The Apple operating system went through a painful (and entirely necessary) retrofit, adopting and forking the BSD kernel. Apple did reach the desktop because it put the necessary effort into its user interfaces. But Apple could only achieve that goal by absolute control of the display hardware. Linux doesn’t enjoy that luxury. But as with Microsoft’s awkward emulation of Apple’s old graphical user interfaces, we see the pattern of the Lion and the Cheetah: Microsoft didn’t have to invent anything. It could wait for Apple to do the hard work.

The rise of the patent wars we now see is just such a Lion and Cheetah hierarchy: patent lawyers are expensive and the court cases are death by a thousand cuts. Now Apple and Google are in the same regulatory hot seat as Microsoft was years ago. As a developer, I prefer to use a reference standard and avoid vendor lock-in, whatever the advantages of some proprietary technology might give me in the short term. But there was a day, long ago, when Microsoft was at COMDEX in Chicago, handing out packets of diskettes to developers, for free, too — asking us to develop for their brand-new operating system: something called Windows. Apple charged big bucks for their toolkits in those days. They still do, too. But it was Microsoft who started the tech wars, Bill Gates furiously criticising developers for writing free software and stealing his shit.

Humans didn’t evolve to great size. The Neanderthals were certainly bigger and if their skeletons are any guide, they were stronger and far better adapted to their environments. We formed societies with internal specialities, developed technologies to gain dominance. This got us into trouble: technology evolved faster than we did as a species. Nobody’s happy with the laws as they are: they haven’t evolved and we’re now reaching an intellectual bottleneck as the Patent Wars devolve into hideously expensive trench warfare.