[amelius]

In my view, unfair competition practices begin when investors make a huge pile of money to "out-money" any competition.

For example, how is it fair that a bunch of investors make a pile of money so big that it puts small bookstores out of business?

[AnimalMuppet]

Nobody owed small bookstores a living. If Amazon can give people more choice at the same or better prices, why should the small bookstores survive? They're less efficient and therefore wasting resources.

(Yes, I know, small bookstores provide a whole different experience than shopping on Amazon. The thing is, nobody cares. Or at least too few people care to make the small bookstores into viable businesses.)

How did Amazon "out-money" small bookstores in a way that wasn't simply "more efficiently providing a competing service"?

[amelius]

> Nobody owed small bookstores a living.

By saying that you're basically throwing the whole concept of "fairness" out of the window, so that's no argument.

In my view, Amazon does provide a more complete service than smaller bookstores, but they achieved this with external money; money obtained from outside the book-selling business.

A similar thing is happening to restaurant owners. Companies like Uber Eats (started through enormous investments) build a portal where people can order food. Suddenly, restaurant owners have to pay a sum of money to these companies to stay in business. This is totally unfair, in my view.

[ChrisLomont]

>By saying that you're basically throwing the whole concept of "fairness" out of the window, so that's no argument.

Is fairness forcing people to spend more money on less desirable products and firms simply because those firms exist?

That seems pretty unfair to me. And it's been shown to be bad economics time and time again.

Fair seems letting people decide which business they want to purchase from, even if that means less desirable ones don't get paid.

[amelius]

It's not a matter of all or nothing.

A different way, for example, would be for Amazon to let small bookstores share in the profits, as a compensation for putting them out of business in such unfair way.

(That would be fair, but it is unfortunately not how we have organised things.)

[asdfasgasdgasdg]

Why should small bookstores get a medal for being worse than shopping for books online. I can make dozens of worse experiences than Amazon. Should Amazon have to pay me for each one that is unprofitable?

[ChrisLomont]

>for putting them out of business in such unfair way

Again, is it fair for good and efficient businesses to be forced to support bad and inefficient businesses?

If so, what will stop people from starting inefficient businesses to make the good ones hand them charity?

Most of our standard of living increases is the result of inefficient companies and processes being replaced by more efficient ones. What you propose slows this down (or perhaps stops it completely), so now is it fair you're robbing the future of quality of life gains simply to hand charity to inefficient actors?

Do you routinely buy overpriced goods to support your beliefs?

This is simply bad economics, and it's the kind of belief that leads to terrible societal outcomes when enough people enforce this via political power.

I find it fair for companies to compete for customers via better products, lower prices, better service, or any combination of things their customers want, and those companies that cannot compete through obsolescence, inefficiency, market changes, to fade away. This seems pretty fair to me, and has less societally painful side effects than any system I've seen tried (and I've read quite a bit on such things).

[AnimalMuppet]

> > Nobody owed small bookstores a living.

> By saying that you're basically throwing the whole concept of "fairness" out of the window, so that's no argument.

Not at all. I'm saying that, if the small bookstores are less efficient at providing books to people, then there is room for a more efficient competitor to drive them out of business without any unfair competition taking place.

> In my view, Amazon does provide a more complete service than smaller bookstores, but they achieved this with external money; money obtained from outside the book-selling business.

So what if the money was from outside the book-selling business? You seem to be declaring all outside capital investment to be unfair, which strikes me as a bizarre stance. Were railroads unfair competition to wagons because the railroads had to raise capital on Wall Street?

[fzeroracer]

The large failure of your argument is that those competitors are not more actually more efficient. This is why large companies are harmful even before they reach the distinction of monopoly; although as an aside I see people here making arguments that monopolies cannot exist.

Uber for example is not more efficient than RideAustin, the local non-profit ridesharing alternative. What they do have however, is a large amount of funding behind them which allows them to artificially lower the true cost and choke out competitors. Once they've bled the competition dry, they can raise the prices again and benefit from full control over various parts of a market.

This is the same tactic that Walmart has used in order to destroy many local towns by severely undercutting local businesses into oblivion. We should consider this to be an objectively bad thing, considering if said sole company ends up leaving the area due to profitability reasons they leave the residents with nothing [1].

This is how the 'free market' works in practice. The largest companies with the most money don't actually compete on the same level as local companies and it would be naive to think that small bookstores vanishing is solely due to inefficiency.

[1] https://www.theguardian.com/us-news/2017/jul/09/what-happene...

[asdfasgasdgasdg]

> Once they've bled the competition dry, they can raise the prices again and benefit from full control over various parts of a market.

A thing that HNers have been speculating will happen for years, but which has so far failed to materialize.

[fzeroracer]

Failed to materialize would be objectively wrong. I even gave you a direct example in the tactics that Walmart pulled in order to destroy local stores.

You can also look at how dreadful the situation is for ISPs in America.

[amelius]

> You seem to be declaring all outside capital investment to be unfair

Let's take the Uber Eats example. You think that restaurants owe Uber money for simply being present on their platform (necessary for survival these days for restaurant owners). But Uber doesn't owe restaurants anything?

It's not investments that are the problem. It's the way whole professions are "enslaved" by investors who simply make a pile of money, scale things up and build a portal, which then becomes the new market leader.

(Of course, if you keep thinking inside the box of the free-market, then you will think this is all ok, but that is not the point).

[AnimalMuppet]

Is being present on Uber Eats really necessary for a restaurant's survival these days? If so, why? Is it because Uber Eats has become how customers find restaurants? And if so, how has it done so? It wasn't just by having a lot of money and setting up a website. (See pets.com for a counterexample.)

Uber Eats provides value to (at least some) eaters, who therefore use it to decide which restaurants to patronize. (I can't tell you why they do so; I don't use it myself, and I don't understand why anyone would want to.) The restaurants then have to be part of Uber Eats (at a cost), or to miss out on those customers who use Uber Eats. If Uber Eats charges more than it's worth, then the restaurants won't sign up.

> It's not investments that are the problem. It's the way whole professions are "enslaved" by investors who simply make a pile of money, scale things up and build a portal, which then becomes the new market leader.

You don't become a market leader by having a lot of money and building a portal. You do it by providing something that people want enough for them to use your portal. Otherwise you get ignored.

> (Of course, if you keep thinking inside the box of the free-market, then you will think this is all ok, but that is not the point).

I think my box matches the reality of the world more than your box does. Maybe you need to think outside of your box a bit too...

[cryptonerd2212]

I don't know that using railroads as a model of non-monopolistic business is the best idea, but I agree with you that investors are critical to business. It's the original crowdfunding.

[matthewmacleod]

I do generally agree, but capital can really distort fair competition in the long run. A large investment can be used to sell products at unsustainable prices until competitors go out of business, before jacking them up for the now-captive market. Classic predatory pricing.

It’s often the case that this is harmful to the market in the long term.

[AnimalMuppet]

I agree. My objection is to amelius, whose claim seems to be that money is automatically or inherently unfair (as opposed to your statement, which is that it can be used that way).

[xanipher]

I don't know about the US, but in Europe the big one was taxes: Due to loopholes in tax regulations, weird accoubting practices, etc. Amazon pays next to no taxes, whereas small bookstores who can't afford to "Double-Irish with a Dutch" their taxes pay way more.