Getting back to the situation of having only a few massive slaughterhouses, with work forces vulnerable to Covid-19, and the problems of centralizing capacity in a few huge companies (starts here, last here), I see that the venerable Bruce Schneier is of the same mind, albeit coming at it from his famous perch as a computer security expert:
First, we need to enforce antitrust laws. Our meat supply chain is brittle because there are limited numbers of massive meatpacking plants — now disease factories — rather than lots of smaller slaughterhouses. Our retail supply chain is brittle because a few national companies and websites dominate. We need multiple companies offering alternatives to a single product or service. We need more competition, more niche players. We need more local companies, more domestic corporate players, and diversity in our international suppliers. Competition provides all of that, while monopolies suck that out of the system.
I cannot agree more. It’s not hard to draw an analogy between a market with many small and competing suppliers and the Internet itself, which is itself composed of interlinking subnets, potentially of different types of networks. This flexibility was designed into the Internet by the original designers, and there’s something to be learned there. Contrariwise, a network confined to a single platform type is a monoculture, which is a huge security risk, since a platform with a security hole means all of the instances of that platform has the hole, until it’s patched.
And patching’s usually a ragged, even irresponsibly managed, process.
It’s important to realize that the libertarians will tell you that our current situation of a few big companies is self-correcting. As the big boys become fat and sloppy, new competitors armed with new technology, processes, and business models will come in and knock over the current kings. They’ll have examples to show that it happens.
And sometimes it does.
But, as tempting as that model is for the government hater and, incidentally, the computer programmer who sees human interference in their programs and systems as loathesome[1], a few examples do not prove the case for the whole. Indeed, some potential examples, such as Amazon knocking over Barnes & Noble (increasingly irrelevant) and Borders (bankrupt), has resulted in exactly the opposite: concentration of the market in the hands of the few. Or one. To bring in some thoughts from the investing community, part of the calculation of a new competitor making good, and thus being a good investment, depends on the size of the moat, which is the amount of investment needed to compete, plus the critical intellectual properties owned by the current winners. A big moat has an inverse correlation with changes of success for the new competitor – and moats are often big, and manipulable into becoming artificially bigger.
I look forward to learning if Schneier will be, or has already, critiqued free trade in general.
(h/t CT)
1 Interference, as in adjustments, restarts, corrections of corrupt data. These all hint at imperfections in the program for the naive software engineer who is prone to an almost-religious devotion to their craft – I’ve known a few. Then they look at the economy and capitalism and see government regulation as an opportunity for corruption, and seek to prove it’s unneeded. Someone should write a book, Government Regulation For The Software Engineer: Why It’s Needed.
