Government regulations that mandate some return (think telecommunications services for those in rural areas, pollution standards, etc.) can provide an incentive for monopolists/oligopolists to perform better according to some criteria. The problem is those mandates are not what we would always consider "innovative". By definition, they are often designed to incrementally improve on the status quo.
The game of politics has an important role. When there are oligopolies in many industries it is not unusual to see regulators getting jobs at the very companies they regulate. Think of the ties between the SEC and finance, CRTC in Canada and the communications sector, etc. Monopolists have a way of cementing their position in the economy and reducing the mandates that governments place on them.
On the flip side, monopolies often have little incentive to invest in improving their products/services, and find they can profit from making their products cheaper/worse.
Comparing one very effective and interesting skunkworks lab with the incredible explosion in choices and service in telecommunication, as well as drastically lower prices, that came when the monopoly was broken up?
I think you're demonstrating the anti-monopoly point handily.
The crashing and burning of a big monopoly may very well be a healthy event; but oh the damage they do before then...
IMO, innovation is usually fueled by competition. Where there's lots of competition, the need to innovate is the necessity for survival. I mean, how innovative was Microsoft in the 90's when they essentially had a monopoly on desktop computing? That's how we got stuck with IE 6 for so long...
Academic institutions are hugely monopolistic...
> Where there's lots of competition, the need to innovate is the necessity for survival.
That's the theory. In practice, competition drives bean-counting efficiency. See, e.g., Thinkpads before and after the Lenovo acquisition. Pretty much the only place you see innovation in that space is among companies that can carve out a niche based on brand or differentiating factors (Apple), or among companies that have a monopoly on a key piece of the supply chain (Intel, Microsoft).
I wonder what could make something like Comcast into a "good monopoly" though.
Another aspect is that commercial competition, while generally accepted as a system that in the end delivers superior results, seems woefully inefficient in terms of waste of resources, as opposed to something like academic competition, were people freely reuse competitors' previous work.
* Criticism: https://medium.com/@petersimsie/why-peter-thiel-is-dead-wron...
* Alternate interpretation of Thiel's intent: https://www.quora.com/Peter-Thiel-claims-that-competition-is...
I like drawing parallels between economics and ecology... monopolies are farms, massive artificial monocultures that suppress natural competition and extract value for the profit of a few. They embody a cycle of growth and stagnation.
A healthy economy is more like a jungle, innumerable smaller competitors with diverse approaches to survival... an extremely resilient and constantly evolving ecosystem that leads to fascinating innovation.
I think you missed PT's point. The word "monopoly" has overshadowed his message. He wants people to pursue "blue ocean"[1] ideas to be innovative.
Instead of starting a company that makes another generic clone of aspirin, you pursue a drug that cures breast cancer. Or instead of building a business that broadcasts 150 characters (hey we offer you +10 more characters than Twitter), do something more innovative for society like building cheap flying cars.
I'd venture to guess that 99% actually agree with PT's underlying idea (innovation) but the distasteful word "monopoly" has completely drowned out the message. The term "blue ocean" is the same concept -- it just doesn't rile people up as much.
What you're describing is a jungle. Niches with dominant players that share in a diverse resilient economy. Bees and hummingbirds compete for the same resources but they are not copycats.
A monopoly is a farm, an established entity that's taken control of the local system to suppress disrupters.
That's the part I was replying to. When you say "I agree" with parent post that disagreed that "[monopoly] is also good for society as a whole."
>A monopoly is a farm,...
I wasn't replying to this alternative analogy. I think we both agree that PT wasn't using "monopoly" in this manner. His usage of "monopoly" was closer to your "jungle" ecosystem. My point was that you may actually not be disagreeing with PT.
Theranos had promises of "blue ocean". No competition. This attracted investors like moths to a flame. (We now know they had no competitors because their technology was a fraud.) The investors would have been better off investing in a boring factory making generic aspirin ("red oceans of bloody competition").
Uber should be a case study that burning up billions in investor money (billions wasted on trying to underprice Didi in China) was a colossal mistake. How much of that bad strategy is blamed on Travis's vs investors is something we won't know until a tell-all book comes out.