Exactly, it's "just" the market setting the price.

The issue is that these are near monopolies, so the market isn't efficient.

In other words, if those companies didn't have monopoly power, other businesses (or non-commercial entities) might be able to afford to hire some of these people as well, which might be beneficial overall for innovation.

That's the economic argument and it's pretty clean imo.

But as far as I'm concerned personally, I would really prefer to live in a world in which smart people work on human flourishing... rather than whatever that is.

I think that's exactly the point I was getting it. Who decides what efficient is, and what do they measure. You might care about vision algorithms, and I might care about hamburgers.

From the economics perspective, something being Monopoly doesn't mean it's inefficient.

Depending on the situation, they can be far more efficient then diverse companies, or much less

> From the economics perspective, something being Monopoly doesn't mean it's inefficient.

From an economics perspective, if there is a monopoly, there is no free market, so you can't rely on the market for efficiency. A monopoly can be efficient, but it can also be arbitrarily inefficient and still keep its position.

you are correct and I agree.

I was trying to make the point that monopoly isnt defined by inefficiency, either by the technical definition or the colloquial one.

Rality is complex, and few monopolies can be arbitrarily inefficient. I think this is where a lot of the public confusion about monopiles comes from.

If you have the only grocery store or gas station in town, it might seem like there is a monopoly. There is probably a wide leeway to raise prices or be inefficient, but not without limit or else someone would compete.

If Amazon, Google, or whomever 10X'd their prices, competitors would arise.

The market is shit at making long term risky bets that require a lot of R&D.

That's the reason why quantum computing and projects of this type would not exist if you didn't have behemoth companies with extra cash lying around.

The problem with your ideals is that every one has different ideas on what "human flourishing" looks like. One way or the other, if it is Government that is in charge of "human flourishing", then some group of people are going to benefit at the expense of another group of people, at the discretion of whoever currently has the most political clout.

Capital markets don't perfectly account for all positive and negative externalities in the world, not even close. For example think of a company that invents a miracle drug that only costs $1 to produce. The net benefit to humanity would be to open up production and sell it to everyone who needs it for a few bucks, but of course the company will do everything it can to maintain a monopoly and sell the drug for $X0000/dose, even if relatively few people can obtain it. Lawyers and lobbyists will get paid a lot of money to get the second outcome, even though they're producing negative value overall.

Im not saying they do. I am saying that claims of inefficiency or failure need to be compared to a possible and realistic counterfactual.

You might think it is is inefficient to have a miracle cure for cancer tied up on patent for 20 years, but what are you comparing it to.

> sell the drug for $X0000/dose, even if relatively few people can obtain it

A rational company would lower the price if that broadened the market and netted more profit by volume. Drugs aren't Veblen goods.

The impetus for jacking up drug prices is that the market is captive, and those who need the drug will obtain it. That and insurance/government is often the payor.

Right, but in some cases volume doesn’t make up for the price drop. Or the source materials are the bottleneck. Even if the societal benefit was greater.

If the drug is needed by 1 million people, selling it for $1 will net you $1 million (let's assume all the 1 million can afford $1). If they instead sell it for $1000 and only 2000 people who need it can afford it, they'll make $2 million, so it's much more economically efficient.

No, because once those people take the drug then cash flow disappears, because they're cured. It's ideal to stretch out the adoption of the drug as much as possible in that situation.

It's the same reason SAAS took off so much. If you sell the product and consumers are (relatively) happy, now what? They might come back and buy another version in 5-10 years, but how do you generate enough cash flow between now and then to stay afloat?

Thats not very true for drugs, especially a theoretical cure all.

The time value of money means you want to sell every dose as soon as possible. with a 10% annual return, $1,000 today is better than $2,600 in 10 years.

Additionally, each day that passes, someone else can come in and outperform you or undercut your price.