At least before there was a certain common baseline derived from everyone watching the same news and reading the same press. Now they are just as enclosed in their thought bubbles as everyone else. It is entirely possible for a tech CEO to have a full company of tech workers despising the current plan and yet that person being constantly reinforced by linkedin and chatgpt.
I remember first hearing the phrase "yes man" in relation to a human ass kisser my dad worked with in like 1988.
It's very easy to unknowingly surround yourself with syncophants and hangers on when you literally have more money than some countries. This is true now and has been true forever. I'm not sure they're more out of touch, as much as we're way more aware?
I think you're underestimating a bit. We must implement AI because they were able to sell it so good that they got billion $ investors (see all the money coming from Qatar/saudi arabia etc). That's a lot of money coming in that allows to innovate/etc.
I swear that every 5-10 years, corporate CEOs all get together in a secret meeting where they all agree on the next buzzword technology. They invite Harvard Business Review and the tech press to give them their marching orders. Then, finally, the white smoke comes forth from the chimney indicating the next bubble buzzword has been chosen, and the industry goes bananas over it for 10 years for no reason.
It "could be anything", but the current AI trends/updates are really impressive. This is why they are investing.
If we reach a limit in the next 5 years, so be it. But it's driving and pushing for a paradigm shift in the way things work - search, coding, tooling, etc. It touches almost anything people do, not a specific group of people, but society as a whole.
Well, assuming they're not trying to revive the cartel.
Perhaps a better approach to anti-monopoly and anti-trust is possible, but I'm not sure anybody knows what that is. Khan was very well regarded and I don't know anybody who's better at it.
Another approach would be a wealth and income taxation strategy to ensure sigmoid income for the population. You can always make more, but with diminishing returns to self, and greater returns to the rest of society.
Don't pick a fight with people who buy ink by the barrel and bandwidth by the exabyte-second. Or at least, don't do it a month before an election.
That being said, Kamala's refusal to run on Kahn's record definitely helped cost her the election. She thought she could play footsie with Wall Street and SV by backchanneling that she would fire Kahn, so she felt like she couldn't say anything good about Kahn without upsetting the oligarchs, but what she was doing was really popular.
Chip fabs used to be like book publishers; you don't have to own a printing press to be an author. Carver Mead even described his vision of the industry that way.
Nowadays you have to get your cell libraries and a large chunk of your toolchain from the fab. Of course it's laundered through cadence+synopsys, but it's still coming from the fab. You have to buy your masks from the fab (heck they aren't even allowed to leave the fab so do you really own them?). And on and on.
For the record I don't agree with the "exponential" part, but otherwise this is an underappreciated and powerful technique.
I can still make a book like that in my basement. People do this as a hobby now. You can still build chips like that in your garage. People do this as a hobby now.
These things DO NOT SCALE... you cant have 10,000 people running printing presses in their basement to crank out the NYT every day. A modern chip fab has more in common with the printer for the NYT than it does with what you can crank out in your garage.
Let's look at TSMC's plant in AZ. They went and asked intel "hey where are you sourcing your sulfuric acid from. When they looked at the American vendors TSMC asked intel "how are you working with this". Intels response was that it was the best they could get.
It was not.
TSMC now imports sulfuric acid from Taiwan, because it needs to be outrageously pure. Intel is doing the same.
Every single part, component, step and setup in the chain is like that. There is so much arcane knowledge that loss of workers represents a serious set back. There are people in the production chain, with PHD's, who are literally training their successors because thats sort of the only option.
Do you know who has been trying the approach you are proposing? China. It has not worked.
https://www.youtube.com/asianometry probably the best rough and ready education you can get on the industry.
> https://www.youtube.com/asianometry probably the best rough and ready education you can get on the industry.
I would take anything from that channel regarding China with a pinch of salt.
You can absolutely manufacture a convincingly-professional, current-generation book in your basement with a practically-small capital investment.
You cannot manufacture a convincingly-professional chip (being generous: feature size and process technology from the last two decades) in your basement without a 6-7 figure capital expenditure, and even then - good luck.
The complexity of actual fabrication was always, and still is, entirely within the foundry. But in the early days of that model, designs could be more easily handed off at the logical level, leaving the physical design to back end companies, which makes designs much more portable between foundries. (The publisher analogy.) What's changed is that the complexity of physical design has exploded, and you can't make the handoff at nearly as high a level, and there is much more work that depends directly on the specific process you are targeting. Much more work at the physical level falls to the fabless semi companies. So it is much more work to retarget a design to a different foundry or process.
The latter would have to be backstopped by taxes on individual income.
This is in the right spirit but you want two things to be different about it.
The first is that the threshold for a given industry doesn't make sense as a dollar amount, it makes sense as a market share percentage. Having more than 15% market share should be a thing companies don't want, regardless of whether it's a $100 trillion industry or a $100 million one.
And the second is that taxes create a perverse incentive for the government. You absolutely do not want the government to have even more of a financial incentive to sustain and create more of the companies of that size. What you want is to have fewer of them.
So, what you want is a rule that if a company has more than 15% market share, the entire general public is allowed to sue them into bankruptcy for the offense of market consolidation. Which also removes the problem where they buy off the government prosecutors, because if they commit the offense then anybody can sue them.
who bears the costs of this suit?
And who determines what makes for a good market share size to be the threshold?
And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know). It's a bad set of policy imho.
A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition. If a company, such as AWS, is getting a lot of marketshare, but their profit margins is still high, then the gov't should incentivize competition by funding or giving loans to businesses that want to compete with AWS.
However, if AWS's profit margins, even at high market share, remains very low (e.g., amazon's commerce side), then there's no need for the gov't to "step in" at all, as there would be no incentive for any competitor to try enter the market due to low margins.
The goal is to not have it happen, because the company is going to see that they're only slightly below the threshold and voluntarily split themselves into smaller pieces and buy themselves a safety margin because if they don't everybody knows the lawsuits are going to vaporize them once they exceed the threshold.
> And who determines what makes for a good market share size to be the threshold?
Anything in the vicinity of 5%-15% would be fine.
> And by having such a rule, an industry that would have higher efficiency to when consolidated would not be able to (but you wouldn't know).
This is extremely rare and the circumstances where it happens aren't a mystery. It's when entering the market has extremely high fixed costs but then the unit cost of usage is negligible, e.g. it costs a huge amount of money to install water and sewer but then the incremental cost of someone washing their hands is insignificant.
For those things you either have the government do them, or if it's a private company then it's a regulated utility which is completely banned from anything that even vaguely resembles vertical integration as the price of being allowed to have more than the threshold amount of market share.
> A better way would be for gov't to increase competition by adding supply, or demand, whichever one is the bottleneck to competition.
The problem is generally caused by the incumbents capturing the government and then enacting rules that inhibit rather than increase competition. That's why you need anyone to be able to initiate the lawsuit, so they can't capture the government department which is supposed to be thwarting them because then it's the entire public.
so why not solve this issue directly? Transparency, auditing and public awareness etc are needed to prevent regulatory capture. Public apathy are the reason why it is currently "easy" to do capture regulators.
The fact is even if a law suit is possible from anyone in the public, no one is going to pay to do a law suit (which has costs), when the result doesn't net them more profit. So unless the law suit enables the accuser to wholesale take a piece of that company as private property from the owners - which no law currently would allow nor have precedents for - why would anyone expend private money for a public good?
And in any case, i don't the apathy going away, even if the law suit was free. Because currently, the same apathy is allowing regulatory capture in the first place. So solving public apathy first, and foremost, is the solution.
It's mostly easy because the people doing it are good at lying. When they create a rule it isn't called the "mandate this company's product rule" or the "increase fixed costs to lock out smaller competitors rule", it's sold as a safety measure or consumer protection or some other pretext, even though the effect is to raise costs to the benefit of the companies getting the money or exclude competitors to the benefit of the incumbents.
Or they simply don't prosecute antitrust violations, and then there is nothing to audit because there is nothing happening, meanwhile people are kept distracted with other things.
> The fact is even if a law suit is possible from anyone in the public, no one is going to pay to do a law suit (which has costs), when the result doesn't net them more profit.
It does net them more profit. The premise is that having more than the threshold amount of market share is a strict liability antitrust violation, which allows any customer or prospective customer (i.e. anyone) to sue them for it. The person who files the lawsuit would get the money, the same as someone who sues a company for pollution or fraud.
The point of letting people sue you for polluting or fraud or, in this case, market consolidation, isn't to make plaintiffs rich, it's to deter the thing you don't want companies to do. The goal isn't to have a lot of lawsuits, the goal is to have companies not want the market to consolidate and actively prevent it because if it happens they'll get sued.
> So solving public apathy first, and foremost, is the solution.
Apathy is cyclical. People don't care until the problem gets bad enough, then they care enough to demand change and make it go away for a while, then they stop caring until it gets bad enough again.
But you don't want people to have to die or get severely abused before the problem gets addressed. What you want is to change the structure of the system to prevent it from getting that bad to begin with, by making sure that the power to nip the problem in the bud (i.e. stop market consolidation at 5% or 15% instead of 50% or 90%) is held by someone who will actually exercise it, which can be accomplished by granting that power to everyone affected, which in this context is each and every member of the public.
That's not really a convincing argument. The government is the body for setting up the economic rules, it is not bound by it. The government doesn't have revenue or profit. Money is created by the government, it doesn't have a value yet. The direct financing of actions through taxes is not done for the government, but a way for the government to project the costs of the governmental action into the economy. Sure, there are a lot of idiots now-a-days, that think a state should work like a business and make profits, but they are misled.
When a new law is proposed, the Congressional Budget Office prepares a report on the impact it will have on the budget.
Now suppose a new law is proposed that will remove an existing unfair advantage of large companies over small ones, causing more small companies to form and take market share from incumbent larger ones. If large companies pay a 50% tax rate and small companies pay a 10% tax rate, the CBO analysis will show tax revenue going down. Then in order to make up the shortfall at a given level of deficit spending, the government would have to raise taxes or reduce spending, both of which are unpopular, so instead the bill gets tabled and the huge companies retain their unfair advantage. That's the perverse incentive we don't want to see.
> Money is created by the government, it doesn't have a value yet.
If the government can create an unlimited amount of money with no drawbacks, why don't they just send everyone a check for a trillion dollars? If they can't then whatever they want to spend in excess of what they can get away with printing or borrowing has to come from tax revenues, and then what happens when you set up an incentive structure where the government gets more money to spend the bigger they allow companies to get?
> Sure, there are a lot of idiots now-a-days, that think a state should work like a business and make profits, but they are misled.
This is a straw man. The only people who think the government should make a net profit are the people trying to build some kind of sovereign wealth fund. The US government isn't doing anything even resembling that -- it has been running massive deficits for decades. It's to the point that interest on the debt is now a major component of the budget -- we're now spending about as much on interest as on Medicare.
The only saving grace is that it can die and others will scoop up released resources.
When country level planned economy dies, people die and resources get destroyed.
This is confused. Here is how classical economists would frame it: a firm chooses how much to produce based on its cost structure and market prices, expanding production until marginal cost equals marginal revenue. This is price guided production optimization, not central planning.
The dominant criticism of central planning is trying to set production quantities without prices. Firms (generally) don’t do this.
And of course I will grant firms use hierarchical coordination mechanisms internally (managers allocate resources by command rather than prices).
I suppose my angle here is to be clear that firms are typically a kind of hybrid entity: they mix various coordination mechanisms (prices and hierarchy). This makes them quite different from centrally planned economies.
Next, to avoid a definitional stalemate and talking past each other, let me try a different angle. If you want to predict what a company will do next, what mix of models do you use upon?
If I were to predict a company’s production choices, I would model them as being very sensitive to costs and changing dynamics to maximize profit . I would not do that when modeling a centrally planned economy. For that I would use longer time scales and do long supply chain analysis in the service of a social welfare function. See what I mean? What am I missing from your POV?
You describe politics not market economy. It was fully present in communist, state wide, planned economies.
If you want to add “politics” to your causal map, that’s fine too. Reality is multi-factor. I do not deny that leaders make (to varying degrees) political and-or command-and-control decisions. This was already baked into the conversational context. Please take the conversational history into account.
I wouldn’t phrase it this way — to me, this implies unpredictability and/or a lack of rationale. Perhaps you simply mean “internal managers at companies do not necessarily price resources using market mechanisms” which I would agree with.
Many fields of study give insight to the various kinds of distortions that arise from human psychology and negotiation, etc.
Exactly, same as in centrally planned economy.
That's the case in a healthy competitive market. Once you have a monopoly or an oligopoly, you get into central planning territory.
Economists have concepts and models for monopolies and oligopolies — and the way they operate are quite different from the practice of central planning.
I’m talking from within the frame of economic concepts, and I’m striving to use words as understood in the field. At times I value metaphorical thinking, but here in the case of economics, we don’t need to bend words when other fitting concepts are readily available and battle-tested.
An example: If someone calls corporate consolidation “central planning,” they’ve lost the ability to analyze it properly. The relevant questions for oligopolies (strategic behavior, barriers to entry, tacit collusion) are completely different from central planning questions (calculation problems, information aggregation, incentive alignment).
When technical fields have already solved a conceptual problem through careful definition and model building, importing loose metaphorical language degrades analytical clarity.
If you want to propose a different model, I’m all ears, by the way.
The claim isn't that it is exactly like central planning like a state, but very similar through the view on the whole society. You have a powerful caucus, no longer bound by reality (competition), making decisions, that they think are good, which effectively set the pace for the whole economy field. Whether this caucus formed through rigged elections or by inheritance of companies isn't all that relevant. It would be quite a different story, if the state would enforce its monopoly on (political) power and governing, but it refuses to do so now-a-days.
> The relevant questions for oligopolies (strategic behavior, barriers to entry, tacit collusion) are completely different from central planning questions (calculation problems, information aggregation, incentive alignment).
The observation on these oligopolies, that are now larger than some states is, that they seem to lack in their strategic reasoning and are more built on vibes of their leader, which is subject to blindness due to sycophants, much like in an authoritarian regime. Also they tend to treat the whole market as their internal planning problem.
> but here in the case of economics, we don’t need to bend words when other fitting concepts are readily available and battle-tested.
I think a majority of commenters on HN are not as well-versed in Economics as you, so would value elaboration on modern monopolies. I think they differ a bit from classical monopolies in their amount of ties to the government and interference into elections. Not that lobbying isn't typical for monopolies, but modern monopolies seem to not need to lobby anymore, but simply do and dictate.
Yes, there are several problems with oligopolies and monopolies. You referred to one: a kind of blinkered irrationality. Also, capable and strategic self-interest can threaten free markets.
I don’t expect readers here to have the equivalent of a US bachelor degree in economics (though I think this is likely to be a valuable skillset to learn in one’s free time).
Still, I’m hoping they can recognize when they’re stepping into an unfamiliar realm and pay attention to the feeling of “seems like economists are using certain words in particular ways that I should dig into rather than treat them as known vocabulary.” Achieving this level of self-awareness is probably hard for many. To build a deep sense of intellectual honesty and self-awareness of one’s cognitive limitations, I think one can do worse than working closely and intensely with others who also care about these traits. Mentorship helps.
Back to Econ… It also helps to remember in much of economists, these terms are founded in mathematical models. So the interpretation might be subjective, but the mathematical model (the operations) are formalized.
Ideally. Realistically in market with only few companies around it makes it even less competitive.
It's a form of "centralized planning", except it's not centralized at all.
I think this is actually the long tail of "too big to fail." It's not that they're all thinking the same way, it's that they're all no longer hedging their bets.
> we have made the rewards too extreme and too narrowly distributed
We give the military far too much money in the USA.
~ themafia, 2025
(sorry)
On a more serious note the military is sure a money burning machine, but IMHO it's only government spending, when most of the money in the US is deliberately private.
The fintech sector could be a bigger representation of a money vacuuming system benefiting statistically nobody ?
Comparing budgets by adjusting for inflation doesn't make any sense. A budget that served a country of 218 million in 1976 would, when adjusted for inflation, serve a country of 218 million in 2026. Percentage of GDP is what you want to look at.
Budget-to-GDP ratio in the US is close to 40%. (On that note, you should really consider federal + state combined rather than just federal.)
In early 1900s this same ratio was around 5-10%.
It has been increasing pretty much everywhere during the 20th century. It has made me wonder whether much of the prosperity we've seen and felt might not be a result of this ever-increasing percentage. Essentially we're spending more and more and that makes it feel like we're progressing faster than we are. Eventually it's going to have to stop though and I dread what happens when we do.
I don't see why we'd eventually have to stop this level of spending. The debt is unsustainable, but that's a policy choice to keep taxes too low for the level of spending we've chosen.
It's also the case that none of the CIA, NSA or DHS budgets show up under the military, even though they're performing some of the same functions that would be handled by militaries in other countries.
We also have "black appropriations." So the total of the spending on surveillance and kinetic operations is often unknowable. Add to this the fact the Pentagon has never successfully performed an audit and I think people are right to be suspicious of the topline "fraction of GDP" number.
At least not in the data set I use:
I don't think there is even a good solution for that. Govt could essentially sponsor some competition but that's easy to go from "helping to market" to "handouts for incompetent"
But the power concentration is a strong reason. That level of wealth is incompatible with democracy. Money is power, and when someone accumulates enough of it to be able to personally shake entire industries, it's too much.
It's avoidable by formalizing the execution of power. The head of state is very powerful, but he can't create laws or anything. That all needs to be done be the parliament, which is several hundred people.
Sure, the US does it differently, yet the parliament seems to often just not do anything and let courts legislate instead. Then you end up in this weird situation where the supreme court positions end up being extremely partisan to set the "correct" precedent.
Either way there's a lot of power in the executive in either system.
What you're saying basically boils down to: kings are inevitable, might as well choose them by economic success instead of the more old-fashioned approaches. I reject the first part.
First, if the people can incentivize the government enough to tax the wealthy with outrageous amounts, then those same people will demand regulation on everything whenever something goes wrong. You end up with a poor country this way. Second, the wealthy can just leave or influence the policy to be changed.
Also, the irony is that the US is already one of the best countries when it comes to taxing the wealthy instead of the poor. You don't have a 20-25% VAT that applies to everything you buy. You have a progressive income tax and your payroll tax (that avoids the progressive part) isn't a giant ~30% of gross income. You don't have giant excise taxes on things like gasoline that makes everything more expensive (including food). You also generally don't have punitive taxes on things that poor people buy a lot of, like sodas and similar.
The list above are things that are done by (a lot of) European countries. Our "welfare states" don't exist because rich people pay a large share, it's because everyone does.
A centralized authority capable of so severely restricting the economic freedom of the most powerful people implies a far greater concentration of power than the one you're fighting against. You're proposing to cure the common cold with AIDS.
Yes. That's the idea. Make the largest concentration of power an elected body auditable by the commons and whose actions are formalized by a bunch of rules, that they can choose, but still need to stick to.
So, billionaires are bad because they can use their money to enter into voluntary deals with other people, which can lead to them achieving goals we don't like. Therefore, we create a single point of concentration of power with totalitarian control and dictatorial powers, that can take resources from people they don't like and give those resources to others they do like.
And these people with totalitarian control over the commons and dictatorial powers over the commons and the most powerful lever on everyone whatsoever and especially on everyone with huge amount of money, will continue to be electable and auditable by the commons because... I don't know, probably because they feel like it, there is literally no other reasons or incentives for them to do so.
"Big money give a human to much power, so let's take all that power from EVERYONE, concentrate it in ONE PLAСE, and add to this power dictatorial powers and totalitarian control over society. Some might argue that this is the exact opposite of the stated goals of the whole undertaking, but they do not take into account the insurmountable protection in the form of MAGICAL RULES with the help of which society will be able to control all of this"
What matters to power is people, not places. Having power concentrated in one place, made up of hundreds of people who are elected and can be replaced, is fine. Having power concentrated in one or a few people is where things go wrong.
But yeah in the end companies behave in trends, if some companies do it then the other companies have to do it too, even if this makes things less efficient or is even hurtful. We can put that onto the human factor, but I think even if we replaced all CEOs with AIs, those AIs would all see the same information and make similar decisions on those information.
There is pascal's wager arguments to be had: for each individual company, the punishment of not playing the AI game and missing out on something big is bigger than the punishment of wasting resources by allocating them towards AI efforts plus annoying customers with AI features they don't want or need.
> Right now are living through a new gilded age with a few barons running things, because we have made the rewards too extreme and too narrowly distributed.
The usa has rid itself multiple times of its barons. There is mechanisms in place, but I am not sure that people really are going to exercise those means any time soon. If this AI stuff is successful in the real world as well, then increasing amounts of power will shift away from the people to the people controlling the AI, with all the consequences this has.
In theory I guess this creates a demand that should be satisfied by the market but in reality it seems like when the wealth is too concentrated in the hands of the few that call all the decision the market is unable to act.
No, it's pure capitalism where Atlas shrugged and ordered billions worth of RAM. You might not like it but don't call it "centralized planning" or "Soviet era".
There's too much group-think in the executive class. Too much forced adoption of AI, too much bandwagon hopping.
The return-to-office fad is similar, a bunch of executives following the mandates of their board, all because there's a few CEOs who were REALLY worked up about it and there was a decision that workers had it too easy. Watching the executive class sacrifice profits for power is pretty fascinating.
Edit: A good way to decentralize the power and have better decision making would be to have less centralized rewards in the capital markets. Right now are living through a new gilded age with a few barons running things, because we have made the rewards too extreme and too narrowly distributed. Most market economics assumes that there's somewhat equal decision making power amongst the econs. We are quickly trending away from that.