It's not a crime if we do it with an app

https://pluralistic.net/2025/01/25/potatotrac/#carbo-loading

by keepit • 1 year ago

872 589 1 year ago

but would Airbnb or Uber exist if they tried to get permission first? Netflix streaming was illegal at first. Youtube for sure. Napster. Tesla (no dealerships it was direct sales to consumers.)

Even craigslist or ebay or the very first Ford Model T. They break rules because that's the only way to test the waters and see if the public wants the rule broken?

tripplyons• 1 year ago

What was illegal about Neflix, YouTube, and Tesla at first?

chippiewill• 1 year ago

Youtube had a lot of illegal content early on and didn't make much effort to respect rightsholders etc. for a while until the service had taken off.

ta12432• 1 year ago

Youtube came to fame because of sharing copyrighted material without permission of the copyright holders. Still does.

With Tesla, I've no idea if there are laws preventing direct to customer selling, the "land of the free" has a lot of laws preventing freedom.

marcosdumay3• 1 year ago

Youtube got a lot of users by not fighting piracy. And Tesla had that thing where direct sales were illegal in the US.

I don't know about Netflix.

Symbiote• 1 year ago

I don't think most of your examples are correct, but in any case, not everything has to be started in the USA.

Private companies running a taxi service (arranged by phone) were widespread in the UK long before Uber, and surely also other places. Why couldn't Uber start there, if the USA was too restrictive?

ajmurmann7• 1 year ago

One Uber founder is American and the other Canadian and AFAIK both lived in the Bay area, so they probably prefer staying where they were. How much harder would it be to get VC funding for a business in the UK? They already had VC connections in the US from prior ventures. Same issue probably true for engineers they could bring on board. The UK is a much smaller market.

Further, I don't think Uber started out breaking regulations. Initially you could only hail black limos and which were licensed. They only started offering rides from unlicensed drivers in response to competition from Lyft. Lyft in turn started as a long-distance ride sharing company which is also legal. So the hurdle for either company to move to the UK was even higher. Moving an established company to a less important market seems far fetched

Lord_Zero• 1 year ago

There's definitely a balance between innovation and cancer. AirBnB started off great but now it's a cancer. Housing supply is at a massive shortage and Airbnbs eat up what little remains. 2 houses on my tiny street (which are all starter homes are Airbnb).

Uber started off great but quickly became incredibly expensive thanks to surge time and increased costs.

Ekaros5• 1 year ago

Uber started wrong from the beginning. They were dumping their service. And not charging full cost. That is price that goes to driver and the R&D and marketing after say 1 year.

mrs6969• 1 year ago

Maybe they should not exist at the first place.

So I cant use my car to carry out people, without a permission. However, if I do it with uber, I suddenly can!

More than this, I wonder if I can create a company to do taxi bussiness. I will buy 5 car, then rent out 5 more, do taxi bussiness… what makes uber so special, I wonder

golemotron3• 1 year ago

Uber is not a great case for your argument. They made the world safer and enabled transportation for people who would otherwise not have it. No one, literally no one, who has spent any time in taxis wants to go back to them. I can't tell you the number of times I've had to call several companies to get a taxi to the airport have none arrive. Uber broke the ice and showed what was possible. There was literally no other way to get past the regulatory capture. Yes, they broke the law, but they are net positive by a large margin.

wongarsu• 1 year ago

What rules did Craigslist, eBay or the Ford Model T break?

Craigslist seems like a straightforward digital version of what newspapers and community boards were doing for a long time. eBay is just a digital version of an auction house. And the Model T was just a cheaper more widely available car compared to the cars that came before.

None of them seem comparable to AirBnB (subverting hotel regulations by pretending to be something else) or Uber (subverting taxi regulations by pretending to be something else)

serf• 1 year ago

craigslist served as a prostitution and drug trafficking forum for most of its' popular existence.

ebay used to allow the sale of presription drugs, prescriptions themselves, body parts , animal cadavers , pirated software, and shipping of weapons to restricted global areas.

ebay was also an unreported tax-haven-ish thing for a few early years.

(ebay was great fun to browse around in the mid 90s.)

the production of the model T had some interesting quirks. When production ramped he essentially bought the entire workforce from certain regions and caused all sorts of social issues. He had his employees self-tattle on each other for 'moral standards'.

The model-t itself was also produced off a different patent that was held by someone else and ignored; it was fought for later and won by Ford in 1911.

andrepd• 1 year ago

Don't forget that Uber burned through VC money at a peak rate of something like 500 million$ a month to subsidise their low prices until they drove competitors out of business and/or established themselves as ubiquitous. In the olden days it was called dumping, now it's disruption.

Cheer21717• 1 year ago

This is revisionist history: Netflix was legal. Craigslist was legal. eBay was legal, Youtube was legal (yes people uploaded copyrighted content, but they complied with DMCA takedowns as required to under the law)

andrewfromx2• 1 year ago

putting DVDs in the mail was legal but when Netflix first started streaming they broke some laws.

Craigslist and ebay were "unregulated marketplaces".

You're absolutely correct that YouTube complied with the Digital Millennium Copyright Act (DMCA) by implementing a takedown system for copyrighted content. However, YouTube's early operations still faced significant legal challenges and criticism because its platform enabled widespread copyright infringement on a massive scale. secondary liability. Viacom claimed that YouTube was aware of the widespread infringement and benefited from it, which they argued disqualified YouTube from DMCA safe harbor protections.

layer83• 1 year ago

The end doesn’t justify the means. And for half of your examples, one could debate the end being a good thing in the first place.

jpswade• 1 year ago

Feels more and more like we're entering a post-"disruption" era.

maiar4• 1 year ago

No, we’re just learning that disruption is usually terrible. The word is proving to mean what it actually means.

fredsted• 1 year ago

If it's a crime, it's obviously still also a crime if it's an app, just look at Ross Ulbricht or SBF.

Is it really fair to compare "PotatoTrac" with Uber and AirBnB?

diggan2• 1 year ago

Is it really fair to compare "PotatoTrac" with Uber and AirBnB?

If they both break laws but seemingly get away with it, so they have that in common, why not compare them? What makes PotatoTrac or any of the other incomparable?

calvinmorrison• 1 year ago

Taxi medallions are a crime. A cartel. That's it.

djoldman2• 1 year ago

It appears that the crux of the article is that a lot of price fixing is going on through the use of programs that suggest or encourage pricing among a few players, to the advantage of all the players and the disadvantage of the customer.

Crackdowns do take time in the US but there is hope. See e.g.:

https://www.justice.gov/opa/pr/justice-department-sues-realp...

sega_sai• 1 year ago

There is zero chance that this kind of Justice department actions will be continued in the current administration

eastbound• 1 year ago

The previous administration didn’t do anything either. They, oh oops, studied for 3.5 years, and launched processes in the last 4 months of the 4 years. Oh my, I need to reelect them to see it happen!

cudgy9• 1 year ago

Actually, there’s still a chance the current administration can do something about it. But there’s a zero chance the previous administration did anything about it.

fny2• 1 year ago

The current administration, however, plans to let M&A run wild. Oligopolies don’t need an app for uncoordinated price fixing. The fact that there’s a cartel that controls 97% of the frozen potato market is wild. This will only get worse without breakups.

stickfigure4• 1 year ago

cartel that controls 97% of the frozen potato market

This is a weird and emotionally loaded statement. Properly stated, the top four frozen potato producers have 97% of the market share.

That doesn't sound odd? In a mature market with very little technology innovation (potatoes) and very little geographic specificity (frozen), how many companies would you expect? How many laundry detergent companies are there? How many cereal companies are there?

How was this different in the past, except going back to before the interstate highway system?

djoldman2• 1 year ago

Lawsuits are filed in this case as well:

https://www.washingtonpost.com/business/2024/11/20/potato-ca...

cpill• 1 year ago

The New Deal, which Bernie was resurrecting, was meant to break monopolies up, to promote completion and make price fixing impossible. the democrats voted against that as they are controlled by the big companies too. this is easy MAGA exists, and won.

dralley• 1 year ago

Lina Khan led the most antitrust-focused DoJ in a century, which went after Apple, Google, Nvidia, Realpage, airlines, and dozens of other companies.

MAGA give zero fucks about antitrust, and antitrust or lack thereof has nothing to do with the creation of MAGA. That's such an absurd argument I have no idea how to even respond to it. The cornerstone of MAGA has always been nativism & reactionary politics.

I'm very, very tired of leftists shamelessly lying about anything and everything they can just to smear the Democrats.

ryandrake4• 1 year ago

More like "It's not a crime if a corporation does it." The US treats corporations with kid gloves. They get away with so much, and in those rare cases where a regulatory body does anything, it's often just a strongly worded letter, a warning, a threat to one day send a strongly worded letter, or, in really rare, extreme cases, a company official gets called in to say a few words in front of Congress. Nobody goes to jail, fines get whittled down to nothing in appeal after appeal, and the government usually finally just accepts a pinky-swear to never be bad again.

Contrast that to how individuals get the hammer put down on them by the justice system if they so much as fart in the wrong room. The lesson from the last 50 years should be: If you want to commit a crime and get away with it, do it as a corporation.

jeffhuys• 1 year ago

This also happens in the EU, tho.

akoncius• 1 year ago

there are some exceptions, when US jails EU CEO https://www.theverge.com/2017/12/6/16743308/volkswagen-olive...

memhole• 1 year ago

This has actually been partly why when people ask me about my business I tell them it sometimes feels more like a statement about incorporating yourself.

Minus the crime part to be clear. I actually try to hold myself to a high ethical standard.

maiar4• 1 year ago

This. The entire point of corporations is to shield individuals from penalties, but they don’t work. Business failure in good faith, where the shielding makes sense, is not really protected because bank loans require personal liability and because it’s impossible these days to recover from a damaged reputation unless you come from a family rich enough to hire its own PR firm. On the other hand, when it comes to letting rich people get away with absolutely unambiguous criminality, corporations work very well.

alt227• 1 year ago

I get the feeling this was the plan from begining.

miohtama8• 1 year ago

Corporations are owned by people. Profit is distributed back to the society thru dividends. The largest shareholder category is pension funds, not billionaires. So effectively boomers are robbing younger generations.

ryandrake4• 1 year ago

The corporate veil should provide enough protection from random and unforeseeable failures to encourage entrepreneurship, but not enough that it shields wrongdoers from consequences. Currently it shields nearly everyone from everything in nearly all cases from run-of-the-mill business failure all the way up to straight-up fraud.

__MatrixMan__12• 1 year ago

We need to start seizing IP into the public domain and sending shareholders to jail when their companies misbehave. I'm on the hook if my dog bites somebody, it should be no different if the role of my dog is played by a company.

Monetary risk is not a real enough risk.

layer83• 1 year ago

While I’m sympathetic to the sentiment, I don’t see how “sending shareholders to jail” could possibly work, given how many people own shares. It’s like your dog would be collectively owned by a million people. Maybe you mean the board?

scarface_746• 1 year ago

So should every one who owns stock in a company - including mutual funds go to jail?

adrr2• 1 year ago

That would be like you sending the whole family to jail if one of them commits a crime. They are separate legal entities.

throwaway98797• 1 year ago

yea sure let’s make taking risks even harder

we as a society are better off when people take risks

amazingamazing3• 1 year ago

i find this comment strange. limited liability is by design

anticorporate• 1 year ago

Yes, limiting the liability of criminals from prosecution is the design. That's what's wrong with it, and why we must stop it.

wat100008• 1 year ago

Limited liability means the shareholders are shielded. It’s not supposed to mean the company itself is shielded.

swatcoder• 1 year ago

The "design" is sensitive to which liabilities are limited for whom.

Shielding marginal or non-voting investors from disproportionate responsibility for things essentially out of their control transfers risk from them, and makes it easier to move money to useful places. That's great!

Shielding key decision-makers and large-stake owners from responsibility for actions performed at their behest is not so much. And in fact, the pure "design" of limited liability has means for "piercing the veil" and keeping these individuals responsible and for wholly disolving corporate charters.

It just turns out that once commercial enterprise grows big enough, or is steered by influential enough leadership, capturing regulation and enforcement to serve their own interests, they can undermine those safeguards and assert a kind of wholesale corporate immortality and immunity that completely undermines the "design" -- a bug in the implementation of that design, if you would.

paulddraper3• 1 year ago

Please cite example of farting in the wrong courtroom.

Either that, or your post is hyperbolic.

buggy6257• 1 year ago

Yes. Yes it is. Congrats you cracked the code.

stanleykm• 1 year ago

hacker news discovers literary devices

gruez23• 1 year ago

Contrast that to how individuals get the hammer put down on them by the justice system if they so much as fart in the wrong room. The lesson from the last 50 years should be: If you want to commit a crime and get away with it, do it as a corporation.

That's because most crimes "individuals" do are straightforwardly illegal and easy to prosecute, whereas the "crime if a corporation does it" are not. It's not any different than say, simple property crimes (eg. stealing or vandalism) vs white collar crimes, both of which can be perpetrated by individuals but the latter are far harder to prosecute. Stealing a candy bar is an open and shut case, especially with surveillance footage. A long firm fraud[1] is far harder to prosecute. If you buy a truckload of candy bars on credit, fail to repay the vendor, and declare bankruptcy, prosecutors are going to have a hard time prosecuting the case. Having bad business acumen isn't a crime, so on the surface nothing illegal has happened. To prove wrongdoing they must prove that you intentionally acquired goods on credit without intending to pay it back, which is far harder.

[1] https://en.wikipedia.org/wiki/Long_firm_fraud

dartos3• 1 year ago

That's because most crimes "individuals" do are straightforwardly illegal and easy to prosecute, whereas the "crime if a corporation does it" are not

Maybe that’s something that should be adjusted by a legislative body.

Crimes are only “easy” or “difficult” to prosecute because of the laws as they’re written.

regularization• 1 year ago

That's because most crimes "individuals" do are straightforwardly illegal and easy to prosecute, whereas the "crime if a corporation does it" are not. I

Yes, but why are individual crimes easy to prosecute and corporate crimes not. These are not things that just popped into being like a thunderstorm. They are a part of an economic and social system that makes things in such way.

noisy_boy• 1 year ago

Sure - then don't let them get big enough that they start to affect public at large. Name and shame the company, not the individuals. Let the public and market decide if such a company lives or dies. Right now, we are letting them get big enough that they are turning back and are eating us.

bongodongobob3• 1 year ago

That's like saying "you can tell this is an Aspen by the way it is". The idea is that we should have control over those laws dude. We didn't just spawn in a video game and are forced to deal with it. "Cause that's what Dad says" isn't how it's supposed to be.

qwerty_clicks2• 1 year ago

The era of trump will accelerate this further. Not that Obama Biden were saviors, Trump and co are putting fuel on the fire

arrosenberg6• 1 year ago

That's true, which is why we should be heavily focused on keeping corporations small, discrete and weak enough to drown in a bathtub when they act up.

bmitc• 1 year ago

That's because most crimes "individuals" do are straightforwardly illegal and easy to prosecute, whereas the "crime if a corporation does it" are not.

That's part of the point and problem because it is by design. Rich people and corporations like treating their problems as so complex as to be completely intractable. "How do you tax me when I don't have income?!" "How can I be responsible for a system of decisions?!" Etc. Rich people and corporations want nothing but upsides, and they have designed the system to work this way.

A great example of this is Steve Cohen, who got away with insider trading for years. https://www.youtube.com/watch?v=1szayJV505M. You're telling me that a small business owner whose direct reports repeatedly commit and are convicted of fraud would just be able to walk away? Yea, right. In Cohen's case, he just walked away and bought a sports team.

bdangubic5• 1 year ago

Contrast that to how individuals get the hammer put down on them by the justice system if they so much as fart in the wrong room.

The thing is though - in America people are corporations except of course no one will teach you that. Open an single-person LLC and boom - you are now corporation. Have a rental, move it under LLC, own a car, LLC… now you are corporation (with limited to no liability) :)

gruez23• 1 year ago

You have to be very careful with this, especially as a single person corporation.

https://en.wikipedia.org/wiki/Piercing_the_corporate_veil

Moreover most of the difficulty in prosecuting corporate crimes comes from the fact that responsibility is spread across multiple people, that it's hard to prove anyone did anything wrong. Obviously that won't work with a single person corporation.

otterley2• 1 year ago

That’s not quite true. It’s just the first step. Your business then has to observe and perform all the required customs and ceremonies (board meetings, etc.) in order to be respected by the law. Otherwise a court can “pierce the corporate veil” and find individuals liable for their actions.

lb1lf• 1 year ago

'Corporations have neither bodies to be punished or souls to be condemned. Hence they do as they please.'

-Edward, Lord Thurlow.

FireBeyond4• 1 year ago

Tangentially, my other favorite on such things:

There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to the public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.

-- Robert Heinlein, Life-Line

amelius• 1 year ago

This will get worse soon with the oligarchs in power.

And by the way, this is preaching to the choir. Nothing will change if we keep echoing the same things to ourselves.

steveBK12310• 1 year ago

Exactly - theres a lot of stuff that if an individual/small business owner did, they'd be personally onerously fined or jailed.. but corporations get a pass. Corporations also have a lot of money to pay good lobbyists & lawyers such that laws are pretty forgiving, loopholes are found & exploited, and finally they are vigorously defended if the government ever does try to crack down.

Ubers behavior during its growth phase, and even now is a good example of this. The latest letter of the law vs spirit of the law thing Uber did was circumvent the NYC law to try and ensure Uber drivers get a fair minimum wage.

To avoid having to pay any difference to make up the hourly wage to drivers, Uber runs an algorithm which kicks drivers out of the app randomly if demand gets too low, without warning or indication of when they can get back in. It can be minutes or hours. So the drivers remain on the road, driving/idling, waiting to get back into the app. The "work" is still getting done, but it doesn't count against Uber.

Imagine a small restaurant doing similar, deciding at random slow times instead of sending staff home for the day, they assign them no tables and mark them as off-the-clock. When demand picks up again, they get assigned some tables and resume making money.

The whole independent contractor on-demand app market is an automated exploitation engine.

gruez23• 1 year ago

To avoid having to pay any difference to make up the hourly wage to drivers, Uber runs an algorithm which kicks drivers out of the app randomly if demand gets too low, without warning or indication of when they can get back in. It can be minutes or hours. So the drivers remain on the road, driving/idling, waiting to get back into the app. The "work" is still getting done, but it doesn't count against Uber.

I get legislators want uber drivers to earn a living wage, but expecting uber to continue allowing unlimited amount of drivers to be "online", when they have to pay for them is absurd.

Imagine a small restaurant doing similar, deciding at random slow times instead of sending staff home for the day, they assign them no tables and mark them as off-the-clock. When demand picks up again, they get assigned some tables and resume making money.

You're trying to imply small businesses don't do this but this happens all the time. It's not even limited to minimum wage laws. After the ACA was passed, everyone started avoiding hiring people for more than 32 hours if they could, to skirt the "you have to provide healthcare to all full time employees" requirement.

pbhjpbhj2• 1 year ago

Imagine a small restaurant doing similar //

These are 'zero hour' contracts a popular tool in the UK for businesses you screw over poor employees.

There is some utility for workers too - some people need to be able to say 'I'm not coming in today', or 'I'm leaving right now', often due to carer responsibilities though. The power lies with the business and the workers bad circumstances are often being exploited.

onemoresoop• 1 year ago

It’s a classical example of how power bends all the rules.

klooney• 1 year ago

I remember being unhireable. Piece work stuff like Uber where you didn't need a resume felt like the only possible way to make money.

exe34• 1 year ago

Luigi Inc.

yapyap• 1 year ago

I’d say “it’s not a crime if ur rich” or “it’s not a crime if ur powerful” is more fitting.

casey2• 1 year ago

If you go down the list, every single reason written or not that illegal taxicabs for example are illegal doesn't apply to ride sharing platforms this is why you see such a major propagandist push from taxi companies about Uber drivers being rapists, serial killers, mass shooters etc while taxi drivers are angles.

The laws exist for a reason and it's not to protect the wages class of people who drive taxis. Since ride-sharing doesn't break the letter nor the spirit there is very little desire to change laws to make it illegal.

An individual choosing to break the law on the other hand, well, we've already seen what happens, things get bad fairly quickly as opposed to the decade plus of relatively spotless service from Uber and similar companies. There is even a statistically significant gap in DUIs compared to certain cities that banned ride-sharing companies, though I haven't seen a proper meta-analysis yet.

wnevets• 1 year ago

This is only gonna get worse, we just had the CEOs of massive corporations actively campaigning for the current president.

flawn2• 1 year ago

Make company leadership (partly) liable again and create incentives against such happenings.

nxobject• 1 year ago

My favorite example is PG&E: convicted for 84 counts of involuntary manslaughter after the Camp Fire, the punishment was… a $3.4 million fine, because you can’t incarcerate a corporation.

https://www.abc10.com/article/news/local/wildfire/pges-mansl...

fny2• 1 year ago

Don’t react to the Airbnb and Uber: read the article to the end. The core argument is tech empowers oligopolies which in turn drives inflation.

There are other damning facts too:

private equity companies have rolled up all the fire truck companies, hiking the price of trucks, creating backlogs and bottlenecks for parts and service, and starving the nation's municipalities (including Los Angeles)

Capitalism is dead. Long live capitalism.

cluckindan6• 1 year ago

Crony capitalists are trying to see how far they can push before the people push back. So far people seem to be content to lie down and complain on forums managed by crony capitalists (for example the site you are on right now).

davidw2• 1 year ago

For capitalism to work well, you need a strong state to create free and fair markets and punish bad actors.

ipdashc• 1 year ago

Don’t react to the Airbnb and Uber: read the article to the end.

Agreed, but it is IMO a flaw in the author's work that they chose to lead with Airbnb and Uber. You see this very often with criticisms of the tech industry, and while it is understandable (they're the 2nd and 3rd most visible examples of what the author is describing; I'd put crypto 1st, though), I think it just hurts the point and certainly the appeal of such articles. Frankly, if we ignore the real issues they cause, how many people in the real world actually care about Airbnb and Uber dodging regulations? The public-opinion tide miiight have turned against Airbnb by now, but I'd wager that for most people, Uber/Lyft are still fine, and an overwhelming improvement compared to the taxis we had before. (I don't even use them more than a handful of times a year, but that's way more than taxis.) Even for Airbnbs, I suspect most people think nothing of them; a small chunk see, like, those funky, slightly-cheaper, hipstery accommodations they might have stayed in once or twice; and a vanishingly small percentage actually care about property shortages or regulatory issues.

I realize I've detracted from the main point, and I apologize, but it is something people will have to deal with if they want to make this point (tech industry regulation) to the wider public. Using Airbnb and Uber as the headline examples of "tech dodging regulations" is an awful idea when most people are ambivalent, if not outright happy, that the regulations were dodged in those cases. We will need something a bit more salient.

constantcrying2• 1 year ago

The core argument is tech empowers oligopolies which in turn drives inflation.

No it isn't. How is potato farming "tech"?

pseudalopex3• 1 year ago

PotatoTrac is an analytics service. Not a farm.

ajmurmann7• 1 year ago

Read the article! The point is that there is a app that facilitates potato price fixing

cute_boi• 1 year ago

Unchecked capitalism is harmful. It seems like the Trump administration will exacerbate the issue. Biden had an opportunity to address it, but he failed to act. In the end, we’re left being governed by crooks.

benreesman• 1 year ago

I think it comes down to how one defines capitalism. Markets are an excellent default for pricing things and thereby allocating resources and effort. Markets are also almost impossible to really get rid of: if one attempts to completely eliminate market activity you usually end up with a “black” market.

But markets experience market failures: this might be in the form of monopoly or monopsony pricing power, it might be in the form of lobbyism or other institutionalized corruption, it might be in the form of outright lawbreaking or other even more direct coercion.

Capitalism-like systems only serve the populations that live in them when they are honestly and competently referred: they only work when market failures are addressed with vigor.

We’ve sailed so far past this type of state that the government is now actively aiding and abetting cartels and oligarchs in their efforts to induce market failures.

That ends with some kind of internal or external war, hence the bunkers and islands and spaceships and shit.

Eextra953• 1 year ago

Does anybody know whats stopping ethical and slightly less greedy companies from outcompeting these conglomerates? Its a question I keep coming back to because if the market were efficient then competitors should be able to use that same data to undercut big potato (or big whatever). This never seems to happen.

method_capital• 1 year ago

The answer is: nothing. The whole argument is predicated on a political conviction, not an economic reality.

miohtama8• 1 year ago

Only argument I can think of is economics of scale. You need to have sufficient mass to enter the markets.

However even in this case customers, or Big Potato buyers, can simply ally and create a new supplier where they are shareholders.

llamaimperative4• 1 year ago

You don’t think massive conglomerates have additional advantages they can deploy against competitors in order to retain their cartels?

92834092323• 1 year ago

This is naive and wrong. An example of this is Google Fiber and ironically Tesla. When Google Fiber came out, ISPs lobbied to sue Google and local governments to prevent Fiber from being available in their areas instead of competing. When Tesla tried to sell direct to consumer, dealerships sued to prevent it. Entrenched companies will always use the system to prevent competition. Regulatory capture is a term for a reason.

aleph_minus_one• 1 year ago

Does anybody know whats stopping ethical and slightly less greedy companies from outcompeting these conglomerates?

The customers who buy the product with the lowest price.

A very low price is much easier to achieve if you can make use of economics of scale.

MaxikCZ• 1 year ago

Discoverability. Theres no money in promoting free stuff, so compact free solutions never make it to your suggestions.

ajmurmann7• 1 year ago

What do you mean "free stuff". This isn't about giving potatoes away for free but about reducing margins and competing on price. "Your margin is my opportunity" seems to work well in many cases

pants2• 1 year ago

Perhaps, given economies of scale, it's difficult for smaller more ethical companies to compete even with the price-fixed conglomerate product.

There are some more ethical companies, too. In N Out french fries are $2.30, certainly due to the fact that they own their supply chain and cut potatoes in house.

thiagoharry• 1 year ago

My take: at scale, "more ethical" and "less greedy" are illusions. Corporation are not people, they are systems where, to succeed at large scale, being less greedy and more ethical is detrimental. Therefore, these good corporations are filtered out. Add to this the fact that each time, you need more and more initial investment to enter a market: you need to operate in larger scale with more and more technological investments. So, as the time passes, it is also harder to have ethical corporations operating in a market.

swiftcoder2• 1 year ago

Monopolies. They may not all have the 100% marketshare to convince regulators they legally constitute a monopoly, but in practice one can't compete on price with vertically-integrated conglomerates that already own the lion's share of the market, and have an existing relationship with all of your potential suppliers/logistics/retailers...

fwip• 1 year ago

This is the answer. On paper, we have laws preventing monopolists from abusing their power. In reality, it's easy to disguise any predatory pricing or "special offers," running at or near a loss in your upstart competitor's market until they go out of business.

The only way you win is either major disruption (which is usually not possible), or having a bankroll comparable in size to the incumbent. But anyone with enough cash to enter the market is doing so for a return-on-investment, with just as much profit motive as the existing players.

BlueTemplar• 1 year ago

That's not what monopoly means in practice, and in fact, depending on jurisdiction, there's not even a >50% rule in place.

layer83• 1 year ago

I’m just guessing, but it likely requires scale in order to become profitable. Building up the necessary network, infrastructure and logistics, while getting up to speed on all the regulatory requirements, would require a lot of difficult work. VCs also wouldn’t fund something that merely becomes profitable, without a chance of making stupid amounts of money. The number of “founders” who would want to make this their carrier is constrained by that limited prospect as well, in addition to “selling potatoes” not being very sexy. And the price-fixing cartel would try to thwart you at every step.

Ekaros5• 1 year ago

Looking at expansion of local grocery "co-operative" in European country, well it might not have shareholders, but customers that bought in. And it is still expanding monster. Going to places where it really makes not much sense for entity that should offer shopping for local customers...

olivierduval• 1 year ago

That's called "barrier to entry" to a market (or "un-leveling the field of play"). Actually, that's what any significant corp use first to forbid any new competitor to compete (and that's the reason of the need of "disruption", meaning changing the field of play instead of trying to level it for all players).

Examples:

- laws and regulations provide great barrier for newcomers

- brand recognition (would you better by a know cigarette brand or unknown cheapest one?)

- technical and/or financial and/or IP investment, either because the INDUSTRIAL process need costly tools (so you need to be big from the start) or because you need some really specific know-how

- ...

shkkmo2• 1 year ago

It's not like there's an open market you can actually just sell your frozen potato product on. The supply chain between producers and consumers is a web of vertical integration and deals between large oligopolistic companies.

If you can finangle a wedge of the market, they can just buy you, or apply local pricing pressure in lock-step based on their data broker recommendations.

ajmurmann7• 1 year ago

A very good question!

I'd add though that companies don't have to be "ethical and slightly less greedy" to compete on price. Competing on price is a natural way to gain market share. Nobody would say that Bezo expressed ethics and less greed when he said "Your margin is my opportunity"

Companies should charge the real equilibrium price of a product. It's an important signal to lower or increase supply. However, they should not create a coordinated scarcity or otherwise artificially force a higher price than the equilibrium price. This can only happen through (illegal!) cartels or too much market power (which the government is supposed to prevent).

As usual ee cannot ask for better people but need a system that makes the wrong people do the right thing.

adminu2• 1 year ago

An oligopol often has some kind of moat due to anti competitive behaviour. E.g. the potatoe argument from the article, where McCain makes it hard to buy potatoes from anybody but them as they are part of a packaged deal.

Glyptodon2• 1 year ago

From what I can tell, market theory assumes it's easy to enter a market or that people with money to spend somehow want to use it to compete knowing that they're doomed to drive the industry back to "normal profit." Nobody investing money actually wants to throw money at something that will obviously drive a return to normal profit by competing, and do so within a few years after significant capital expense. They want to invest in something that will drive margin growth. Instead, the only reason people do it is to get a buyout offer from established businesses in the same market. Unless you're Mark Cuban.

Though the above is only true to a point - obviously if the margins get high enough or product deviates sufficiently existing businesses with related interests will step in: witness Costco's chicken business.

So maybe the question is less why isn't there more competition and more so why haven't restaurants vertically integrated their potato supply? The main theory I'd have is that price increases haven't negatively impacted their margins or revenues sufficiently yet.

ceejayoz• 1 year ago

In some cases, the answer is "use some of that money you're raking in to bribe competitors not to compete". https://www.ftc.gov/news-events/topics/competition-enforceme...

simpaticoder• 1 year ago

Does anybody know whats stopping ethical and slightly less greedy companies from outcompeting these conglomerates?

I like this question because it inspires the thought of an "incrementally more ethical firm". Ethics can be roughly characterized as constraints on behavior, therefore if two firms, all else equal, differ then the ethical one is naively at a natural disadvantage, having fewer degrees-of-freedom in any situation. The classic response is that cooperation between firms is itself a powerful advantage, and that ethical behavior ought to yield advantages to cooperation that outweigh the cost of behavioral restrictions.

I believe that the equation changes when ethical behavior itself is successfully attacked and associated with weakness. What happens to a bank if everyone believes it will fail? It fails. What happens when everyone believes that morality is weakness? Morality IS weakness. At that point the reputation and cooperation effects are erased, and only the loss of freedom remains. At that point the culture shifted from the "cooperate-cooperate" Nash equilibrium to the "defect-defect" one. (Religious belief tends to unequivocally favor "cooperate-cooperate" and can therefore both resist this transition and assist in the reverse transition, which adds to religion's social utility.)

AngryData• 1 year ago

By time a market is lopsided enough to incentivize startups to replace them, the established monopoly has built up a warchest of funds that is able to squash most any potential competition.

And even assuming companies don't resort to skeevy tactics to prevent competition, the companies that incentivize profit the most are going to have the most capital to expand and have the highest growth out of any potential competitors and fully saturate the market the fastest.

dd3612• 1 year ago

Because there is collusion in the supply chain as well. The grocery stores won’t place your product, the distributors won’t distribute it or will charge you more, the farmers will charge you more. This is why horizontal and vertical consolidation were made illegal a century ago. Anti-competitive behavior has to be policed at every level.

waiwai9332• 1 year ago

It's not wage theft if we do it with an app.

Which one is this? (Taxi = Uber, Hotel room = Airbnb, Unregistered security = various crypto?)

caseyy• 1 year ago

I think Uber too, and many competitors. They fundamentally employ people but don’t pay minimum wage.

waiwai9332• 1 year ago

Ah thanks, for some reason the description had made me think there was some dodgy HR/payroll startup rather than the gig economy generally.

edoceo• 1 year ago

Walgreens and Storenet

hermannj3142• 1 year ago

This is the way our world works.

If you steal a potato, you will be arrested immediately and the case will be resolved in a few weeks or months.

If you illegally fix the price of potatoes and steal billions from the market, you will be allowed to operate for years in the open while a lengthy civil procedure eventually may ask you to give 1 or 2% of what you stole back in fines.

Don't blame the potato theives or potato cartels, blame the politicians that built the system to work this way.

Ekaros5• 1 year ago

Let's be honest hear. If you go to store and steal sack of potato. I doubt either the store or police will even attempt to track you anymore... Retail theft is just left to happen.

dijit• 1 year ago

Not really, theres a handful of selective enforcement; but as far as crimes go they are prosecuted much more frequently as a percentage of total of infractions than something like price fixing.

__MatrixMan__12• 1 year ago

I've seen some pretty gnarly fights between grocery store security and shoplifters. Back when I worked in one I had to take our security guard to the hospital to have a bite wound treated.

There are more of them nowadays, with guns prominently displayed. It feels like we're not far from a world where they stop bothering to chase them down and just start shooting them in the back.

I think you just have a nice neighborhood.

bovermyer2• 1 year ago

I doubt that. "Loss prevention" divisions in larger corporations might allow for some amount of unpunished theft, but once that number gets high enough, they'll implement measures to control it. Sometimes, that takes the form of locking down shelves, but I imagine some take a more reactive approach.

Additionally, the amount of video and audio (and other data) recorded is increasing, not decreasing. As tracking technology gets more sophisticated, systems of identification, location, and retaliation will also get more sophisticated. Even automated.

I don't think it'll be too long before we'll have "arrest-a-thief" as-a-service.

KennyBlanken2• 1 year ago

Nope. Theft and shrink (from employees) accounts for 5% of losses and it has not gone up - at all - from historical trends.

https://www.brennancenter.org/our-work/research-reports/myth...

https://www.vera.org/news/the-truth-about-retail-theft

https://www.brookings.edu/articles/retail-theft-in-us-cities...

https://www.cnn.com/2023/11/17/business/shoplifting-retail-c...

techjamie• 1 year ago

We'll absolutely document a theft of a sack of potatoes if we notice it, because it's never just the sack of potatoes. The vast majority of thieves get emboldened and either up their thefts, or continue to repeat offend at a low level.

The one sack of potatoes is likely actually a sack of potatoes every week, and it doesn't really take long to rack up a dollar amount worth prosecuting over. I can get my local detectives hungry to file a warrant at the $100 mark.

Shoplifting is a bad game where the store has every edge, and only has to win once. The shoplifter has to win every time. If they don't, they usually find the line between getting away with it and jailtime is much thinner than they thought.

pseudalopex3• 1 year ago

Don't blame the potato theives or potato cartels, blame the politicians that built the system to work this way.

Blame both.

tomaskafka• 1 year ago

Oh, and don't forget the voters, who mostly don't care, thus enabling the cartels that extract value from them to grow unchecked.

chipotle_coyote• 1 year ago

Yes. I see this kind of "if your lock is easy to pick and your house is robbed, it's not the burglar's fault" argument a lot -- it's the lock-maker's fault! It's your fault for not doing enough research on locks! Or more commonly on HN, it's the fault of too much regulation somehow? -- and, it's like, okay, all of those factors may be worth considering, but the burglar still made a conscious decision to rob you. The burglary is not some inevitable consequence of systemic failure. If somebody leaves their laptop on a bar top for a few minutes to go to the bathroom and you steal it, "hey, they left it there" is not some kind of magic get out of jail free card for you. You chose to steal it.

And, yep: if four companies that control 97% of their market conspire to fix prices together, they are making a conscious decision to do so. There may be systemic failures which make it easier for them to do that than there should be, but they're still choosing to do it knowing that it's wrong. I'd go so far as to say that they're actually counting on people pointing the finger anywhere but at them. It's not us, it's just inflation! It's not us, it's the Biden administration! It's not us, it's something something something Covid! Yeah, okay, but at the end of the day, you're consciously choosing to price gouge.

Doctorow's point is, I think, that companies are deflecting from this by saying "it's not us, it's the apps, man! They're telling us what the optimal prices are, and we're just following their command!" But that's still, at the end of the day, price-fixing. It's _outsourced_ price-fixing, but it's still price-fixing.

daveguy• 1 year ago

Well, mainly blame the potato cartels and the politicians. The potato theives are the only ones the deterence system is nominally working to prevent.

crawfordcomeaux5• 1 year ago

Don't blame anymore because blame is an act of supremacy.

Responsibility says it's shared to varying degrees through various classes of equivalence among all.

The thieves are trying to eat or feed people in the context of oppression that capitalism is. Capitalism is a system of oppression that requires poverty to work, so is an economic system of oppression. "Crimes" committed in the context of oppression are required when "noncrimes" are insufficient for meeting needs.

Cartels operate without regard for human life and support the context of oppression. Totally different level of responsibility.

Politicians create the system based on choices made due to support from the cartels. They're in some classes of equivalence with the politicians because they're interacting in a way that promotes the context of oppression.

They're all operating within the context of oppression that is individualism.

bovermyer2• 1 year ago

Hypothesizing for the moment that all of that is true and accurate, what do you propose the solution is?

crawfordcomeaux5• 1 year ago

Wearing these down downvotes as a badge of honor. Appistocracy gotta keep the truth down

confidantlake• 1 year ago

The potato thieves and the politicians are the same team.

drweevil• 1 year ago

The politicians didn't build this. The cartel owners did, so they are absolutely blame worthy. But politicians sit back and do nothing about it, due to regulatory capture.

delfinom• 1 year ago

Well I would argue political donations that politicians gladly accept leads to them sitting back and doing nothing.

cratermoon• 1 year ago

News flash: either the head of Potato Cartel inc was tapped to run the US Potato Thief Catching Commission, or the head of the US Potato Thief Catching Commission retired from public life and took a position as head of Potato Cartel inc

gruez23• 1 year ago

while a lengthy civil procedure eventually may ask you to give 1 or 2% of what you stole back in fines.

Examples? Usually when this argument is trotted out, there's two factors not mentioned: the amount "stolen" is the amount transacted (ie. total potato sold, rather than the additional profit made), or that the government's case is shaky and the settlement reflected that.

hermannj3142• 1 year ago

Big banks role in 2008 financial crisis. Facebook fines from FTC regarding user privacy.

But your point shows the asymmetry in the system. Most thieves don't get to argue costs of goods stolen vs. sticker price of goods stolen and then get to reach a cushy settlement because the government is scared of losing a protracted battle.

wat100008• 1 year ago

A real world example: wage theft in the US is bigger than all other forms of theft combined. How often do you hear about it? We hear endlessly about shoplifting rings and lax enforcement by lefty prosecutors. When was the last time you saw coverage of workers not being paid what they’re owed? When was the last time somebody went to jail for not paying their workers what they’re owed?

SpicyLemonZest3• 1 year ago

I routinely see coverage of workers not being paid what they’re owed.

People do sometimes go to jail for not paying workers what they’re owed (https://kfoxtv.com/amp/news/local/el-paso-contractor-jailed-...), but this article illustrates pretty clearly why you don’t hear more about it. Advocacy orgs aren’t going to brag about some random contractor or McDonalds supervisor going to jail, and the corporate fat cats they could brag about rarely commit wage theft themselves.

mminer237• 1 year ago

That's not actually true. Wage theft is maybe third: https://truthnotoutrage.com/2023/12/05/retail-theft-dwarfs-w...

By all indicia, shoplifting is a much bigger problem. I know this myth and wage theft in general are really popular on social media. I think its lacking of representation in traditional media and prosecution is a mix of how much more clear-cut shoplifting is and just the victims report it more.

datavirtue5• 1 year ago

You don't talk bad about the advertisers.

paulddraper3• 1 year ago

I virtually guarantee you will not be arrested immediately.

Frieren• 1 year ago

Don't blame the potato theives or potato cartels, blame the politicians that built the system to work this way.

The potato cartels are controlling the politicians. They are directly to blame.

Get rid of the super-rich and we will get politicians that work for the public instead of the super-rich.

RobotToaster2• 1 year ago

They hang the man and flog the woman

That steal the goose from off the common,

But let the greater villain loose

That steals the common from the goose.

The law demands that we atone

When we take things we do not own

But leaves the lords and ladies fine

Who take things that are yours and mine.

The poor and wretched don’t escape

If they conspire the law to break;

This must be so but they endure

Those who conspire to make the law.

The law locks up the man or woman

Who steals the goose from off the common’

And geese will still a common lack

Till they go and steal it back.

English nursery rhyme, circa 1700.

datavirtue5• 1 year ago

So the silly Haitian goose drama in Ohio was really a message to all the plebs?

Meanwhile, citizens are being stopped and harassed for their papers because they don't look right.

JumpCrisscross14• 1 year ago

If you steal a potato, you will be arrested immediately and the case will be resolved in a few weeks or months

Have you been to San Francisco?

We don't prosecute petty crime in America. If you want a proper example, compare it to wage theft (including by small businesses).

mandmandam2• 1 year ago

We don't prosecute petty crime in America.

Yes we do; at rates that horrify the rest of the world. It's very expensive. You can find a lot of detail here: [0].

Most people in the U.S. criminal legal system are not accused of serious crimes; more often, they are charged with misdemeanors or non-criminal violations. Yet even low-level offenses, like technical violations of probation and parole, can lead to incarceration and other serious consequences. Rather than investing in community-driven safety initiatives, cities and counties are still pouring vast amounts of public resources into the processing and punishment of these minor offenses.

0 - https://www.prisonpolicy.org/reports/pie2024.html

barbazoo2• 1 year ago

Politicians don’t exist in a vacuum. People are to blame too. So are business owners.

charles_f2• 1 year ago

blame the politicians that built the system to work this way.

Politicians are only doing what the potato cartel is telling them to, because if they weren't they'd be replaced by big-potato-friendly politicians. You can't blame a single actor. What's to blame is the system itself. As long as what's driving it is capital, whomever and whatever makes it grow most will be rewarded, under the risk of being replaced. There's only one metric that counts in this game, and it's no surprise that everything arranges around its optimization.

World is controlled by big potato.

vhcr• 1 year ago

https://en.wikipedia.org/wiki/Onion_Futures_Act

Terr_3• 1 year ago

"[...] but what should we do when the highborn and wealthy take to crime? Indeed, if a poor man will spend a year in prison for stealing out of hunger, how high would the gallows need to be to hang the rich man who breaks the law out of greed?"

-- Snuff by Terry Pratchett

ddtaylor2• 1 year ago

Blame can be shared. They lobbied to have and keep the systems. The concept or argument that someone accomplished this in this way on accident or without understanding the ethical repercussions is laughable.

delusional• 1 year ago

You can not have a lawful and fruitful society if the inhabitants of that society don't want it.

There is no law that you can pass to make the billionaire asshole not be an asshole. You can make him not a billionaire, but the inhabitants of the American society will not allow that.

That is a population problem. Not a political one.

malshe• 1 year ago

Don't blame the potato theives or potato cartels, blame the politicians that built the system to work this way.

The corporations and politicians are not independent though. The corporations lobby to get a rigged system they want.

cluckindan6• 1 year ago

What proportion of the ultimate financial beneficiaries of these apps are old money white supremacists?

Airbnb leaves more people homeless while enabling the rich more convenience.

Uber (as in ”übermensch”) makes the most desperate people compete for pittances, use their income at the gas station and the auto parts store while enabling the rich more convenience.

Doordash does the same.

Robinhood et al take from the poor and give to the rich.

Potatotrac at least screws everyone over somewhat equally. Where are the riots over this?

crawfordcomeaux5• 1 year ago

Rioting has its place, but I think we're at a point where that's become somewhat performative & police are now militarized with Trump holding a good bit of the slack on their leash.

Find the underground railroads. Build communities of care. We need to get better at caring for each other & collaboration. The other side has apps for that. Where are the developers making apps for the revolution?

cluckindan6• 1 year ago

Where indeed:

https://www.reddit.com/r/Bitcoin/comments/5m18v0/sam_maloney...

crawfordcomeaux5• 1 year ago

It'll be interesting to see how many people focus on debating legality instead of centering the harm being done, particularly to those living in poverty.

istultus• 1 year ago

It really does suck that US companies have belatedly figured out that demand is elastic and jacked up the prices. Where I live that happened long ago.

The thing is that he doesn't present any alternative. I know he's some variant of a communist, so does he suggest government control for everything? As if that solved anything? I guess what you find on empty market shelves is cheaper.

Truly a question - what's your solution? What's a solution? People have been arguing that everything is getting worse since forever. I've yet to see people organize and stop buying Pepsi or Coke. Should the government do it for them? Do you propose AI will solve the Socialist Calculation Problem? You're probably against AI as well...

miohtama8• 1 year ago

Pepsi and Coke issue has been solved as there are multiple cola brands with store label or no label. You can buy cheaper cola and you do not need to buy Coke/Pepsi.

shkkmo2• 1 year ago

I think the classic suggestion is to breakup monopolies and block large mergers. We don't need to have people stop buying Pepsi or Coke, we need the company that sells Coke to not own a giant swath of the entire drink market.

Although specifically here, I think we need new regulations broadly banning the type of data broker price fixing that is discussed in this article.

wat100008• 1 year ago

The direct fix is not that hard. I’m pretty sure the laws are already there, they just need to be used. Block mergers that create companies with massive market share. Break up monopolies. Severely punish price fixing.

The real question is, why doesn’t this happen? And answering that gets you to the real, difficult problem: the government doesn’t want to do these things because the government chiefly operates to serve the rich and powerful. Solving that is quite difficult indeed.

immibis3• 1 year ago

You shouldn't have to propose a solution to complain about a problem.

zzzeek• 1 year ago

yeah and it's not copyright infringement if we steal and redistribute the content using an "AI"

https://flaminghydra.com/sam-altman-and-aaron-swartz-saw-the...

dataflow2• 1 year ago

I can't say I buy this argument? I think for some of the cases (like Uber?) it might be correct, but are they sure there isn't another force at play in a lot of other cases?

I recall reading that with apartment rentals in NYC, the problem was (is?) apparently that there are literally contracts in place preventing landlords from deviating from the recommendation. That's the crux of the problem, not the app recommendation itself.

Are we sure the causes in these cases aren't analogously different? For example, the part about 97% of a market being controlled by one company sounds like a monopolization issue rather than anything to do with an app.

danny_codes3• 1 year ago

Did you read the article? The claim is that the app acts as a smokescreen to hide collusion. Or rather, it’s a new way to collude, and thus works as an obfuscation tactic. The app itself is immaterial: it’s using the technology as a way to dodge the law. In this case, w have laws against price fixing. Using an app for price fixing is a way for the price fixer to say, hey, it’s not me, it’s this other company that tells me pricing.

Ofc it’s the same outcome: price fixing.

dataflow2• 1 year ago

Did you read the article?

Seriously? I read the entire damn article before posting. That's why you see my comment had "the part about 97%" in it. It's referring to what was in the article. Was this really necessary?

it’s using the technology as a way to dodge the law. In this case, we have laws against price fixing. Using an app for price fixing is a way for the price fixer to say, hey, it’s not me, it’s this other company that tells me pricing.

And I was telling you I don't buy this. Because if someone can make more money from defecting from the coordination strategy, they absolutely will. Unless, you know, 97% of the market is owned by one player. Or unless the parties can legally prevent each other from defecting. Or unless they can just blatantly collide illegally because law enforcement is lazy. Etc.

I gave you an actual example. The rental thing in NYC has a contractual price enforcement mechanism that is the real culprit. Why the heck do you think they include that provision if merely having an app was enough to fix prices and obfuscate it?

nxpnsv• 1 year ago

I particularly enjoyed the "Optimized for Netscape Navigator." banner

chuckadams• 1 year ago

But ... the iNVIsiblE HAnD of thE FREe MaRKEt

photonthug• 1 year ago

The app crime angle for uber/airbnb is a now familiar topic that gets heated and still draws a variety of different kinds of opinions. Landlord price cabals enabled by apps have started to get press.. this surprises almost no one and makes everyone angry.

Price fixing, consolidation, and greedflation in food sources though does not seem to get much press. I think the revelation would be extremely surprising, scary, and absolutely infuriating to most people.

What is really striking here is how the tired old “vote with your wallet!” advice won’t even work for potatoes anymore. And yet the staunch defenders of business-as-usual capitalism still insist nothing has changed, that we only need to “use our agency!” to effectively fight against whatever kinds of abusive corporate bullshit is getting normalized this week. That’s not just a tired rhetorical trick to win points in an argument or to blame the victim, it’s becoming very transparently absurd.

gmueckl4• 1 year ago

This is all a result of a lack of active market regulation. The government needs to step in actively to keep a free market from collapsing into one of the natural end states. But the US has consistently been far too passive and accepts greedy companies far too readily.

If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently. Let them go through a cumbersome govenment approval process for price changes or something to cap margins. Price fixing cartels need to be busted more aggressively.

ajmurmann7• 1 year ago

"But the US has consistently been far too passive and accepts greedy companies far too readily."

All companies are greedy. That's the reason for existence. Your point that monopolies and oligopolies need to be crushed is very valid though. I wish more mergers were rejected in the first place.

Regulating prices is a recipe for disaster though.

HarryHirsch2• 1 year ago

Regulating prices is a recipe for disaster though

That's an assertion, not a statement of fact. Pricing in natural monopolies is a mature subject, and public utilities have been a thing for over 100 years. Also, pricing for medical procedures is regulated in Europe, and it works extremely well.

gmueckl4• 1 year ago

I feel that US companies are consistently more ruthless and cut-throat than companies in other countries I have visited. I see that as cultural rather than a pure economic issue.

maeil6• 1 year ago

All companies are greedy. That's the reason for existence.

Black and white oversimplification that muddies the water.

You really can't think of two companies with incredibly different levels of "greed"?

dudeofea• 1 year ago

Henry Ford tried not to be greedy all the time, then he was sued, and now all corporations are required to be greedy.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

emn134• 1 year ago

One race-to-the-bottom phenomenon that (to me at least) appears to aggravate the impact of "corporate greed" is the social loop that goes as follows:

1. company decides to push the boundaries of the socially acceptable when it comes to cutting corners (e.g. screwing their customers, or employees, or environment, or debtors)

2. People don't like it, but rationalize this as being a natural consequence of incorporation and the profit motive. Hence while they grumble, there negative impacts to public perception don't actually cost the company as much as you might think

2b. Even if there's a boycott, there will be vocal minority that thinks it's all a bunch of whiny <target audience we're better than>. They'll actively harass or undermine said boycott or backlash, even if in a purely egotistical sense their interests are actually aligned with the boycotters

3. Social norm is reset; we all collectively expect even less from companies. That doesn't however mean the new norm is better or maintained, because as soon as there's some new major conflict between short-term profit and maintaining a decent reputation in public, we go back to step 1 from the new, lower baseline.

Stuff like increasing partisanship, and decreasing incentives for journalist (whether profession, citizen or influencer) to maintain their professional standing (as opposed to targeting clickbate) probably smears those gears nicely.

Many companies have historically clearly paid well over the odds to maintain their reputation, and done well doing so. It's just not true that nihilistic short term greed has always paid; obviously it didn't and still doesn't really. It profitable to do the little, but simultaneously also to do as many cheap things that materially affect public standing as possible.

By promoting the profit motive past a merely utilitarian means to an efficiency-optimizing end into a matter of national identity and point of distinction vs. in particular the USSR, we've shifted our culture beyond what's really rational. We (as a society) don't merely respect and understand the profit motive; we see it as a sign of merit - and significant enough merit that "winning" on that scale excuses a lot of other bad behavior.

Aurornis2• 1 year ago

If a single company can sell almost 100% of an essential good, they need to atomatically lose the power to set their prices and margins independently.

The fallacy is assuming that the government will make everything cheap for consumers.

In practice, government regulation of prices just changes the game. Look at any market with rent control: There are numerous meta-games around building or not building new supply, landlords are incentivized to not fix units because they know tenants don’t want to give up their rent control and move, and a new market emerges where people illegally sublet their rent controlled apartments because it becomes attractive to take advantage of the market demand that landlords aren’t allowed to capitalize on.

The other fallacy in all of this is thinking that companies control both supply and demand. For nearly all commodities, there is a price where consumers won’t pay for it. If rents get too high, people move to a different city. If gas gets too expensive they start carpooling and looking for WFH jobs. If eggs are too expensive they eat something else. These choices make people angry as hell, but there’s no denying that these choices exist. Companies can’t push past these limits and force people to buy at any price. They still have to discover that point on the supply and demand curve.

danny_codes3• 1 year ago

What. Are you advocating for monopolies? Obviously there is a point where people stop buying essentials. The point of capitalism is to deliver goods as cheaply as possible. If toothpaste costs $60 I would still buy it because I need toothpaste. But that extra money now goes to someone who isn’t producing, they are mooching. It’s a welfare check to a billionaire. In a monopoly pricing is fixed at maximum profit, which could make goods 10x or 100x for things with relatively inelastic demand.

galleywest200• 1 year ago

If rents get too high, people move to a different city.

With what money? It takes three months rent up-front to move (first+last month rent and a deposit equal to one month rent) up front. People _need_ a place to live and will spend every last dollar to not be homeless.

gmueckl4• 1 year ago

The government won't make things cheaper. The point of the regulation would be to actively encumbered the monopolist company and either give strong incentives to split up or make room for nimble competitors.

dd3612• 1 year ago

The government does not make things cheaper, competition does. The government’s role is to protect competition. Otherwise companies will collude not to compete.

wyager3• 1 year ago

The government needs to step in actively to keep a free market from collapsing into one of the natural end states.

Which is what, exactly? The US is per capita richer than almost all EU countries by a huge margin (with a few small exceptions mostly enabled by regulatory arbitrage targeting US money), so forgive me if I don't take your seething commentary about the US economic apparatus very seriously.

gmueckl4• 1 year ago

Any free, unregulated market will eliminate competitors until they create an oligopoly or even a single monopoly. It's an immediate consequence of the rules of the market.

olalonde5• 1 year ago

to keep a free market from collapsing into one of the natural end states

What is that natural end state? Natural monopolies are exceedingly rare, almost all monopolies are the result of government intervention.

emn134• 1 year ago

I'm curious what you base that on. For instance, we've never really allowed literally cutthoat competition, nor things like fraud and we've generally not allowed misrepresentation. Governments intervene heavily and always have to set those kind of boundary conditions - but there are really lots of them. Economies of scale seem to be very, very common ever since the industrial revolution; and even more so in today's information-economy platform era.

I'm sure there are plenty of cases where significant competition is a natural end state, but how common those are in comparison? I'm curious.

vtashkov• 1 year ago

Funny, whenever any leftists stay in power for a while we see such kind of situation, but somehow it only gets noticed AFTER they are no longer in power.

philipwhiuk2• 1 year ago

This is ridiculous. This situation has persisted under all parties, globally.

You think it's left vs right but actually the entire system has been co-opted by this neo-oligarchy.

enragedcacti• 1 year ago

Do you see it as a bit of a wrinkle in your theory that the author has five citations to his own work about price fixing published during the Biden administration?

constantcrying2• 1 year ago

What a terrible article. The title and the first paragraph talk about how new business models are circumventing existing laws, which seems fair enough and actually quite an interesting subject.

Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation ("so much of inflation can be attributed to a crime, done with an app"), then goes on to list a couple of traditional companies who are, he argues rising prices above inflation. And who he partially blames for inflation.

None of the examples he gives support the case he is trying to make in his title. Apparently being an "App" has absolutely zero to do with getting away with financial misdeeds.

None of the questions raised by the title are even investigated. And the core argument, that traditional companies are causing inflation, is never argued for. The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone. The source of the inflation being gone does not cause inflation to reverse. And so the fair market price would not get lower, getting something so basic wrong seems ridiculous for someone leveling serious accusations at companies.

yieldcrv• 1 year ago

Blog posts are just random comments that would get torn apart, but elevated as worthy of discussion because its in an app.

adminu2• 1 year ago

Then, there is a switch to the most traditional of businesses with the most traditional business models. Who, the author argues, are engaging in price gauging. In the second paragraph he claims that apps cause this inflation

He is saying that the traditional businesses use an app that allows for a legal way of price gauging.

The last paragraph portraits a stunning lack of economic knowledge, as companies raising prices in line with inflation obviously would not lower prices after the source of the inflation is gone.

The author claims, that these companies raise prices more than inflation based cost increases in production would allow for.

gruez23• 1 year ago

The author claims, that these companies raise prices more than inflation based cost increases in production would allow for.

That's just supply and demand? People get mad that when there's an oil shortage, that oil companies raise prices above the cost of production, but they're happy to see oil companies' margin collapse when there's an oil glut.

Arainach• 1 year ago

Did we read the same article? There are repeated examples of cartels colluding to fix prices which aren't being prosecuted because they're using a third party (app) to coordinate the collusion rather than doing it in a board room.

refulgentis• 1 year ago

I noticed you mistook "gouging" for "gauging", which I agree, would change it to an obviously-wrong essay that failed to back up anything.

There's a lot of other stuff that is unclear (questions in the title? the article says inflation goes in reverse?), but that one thing neatly explains the vibe that might have driven the rest.

bschne5• 1 year ago

This is what has repeatedly bothered me about Doctorow, he writes quite compellingly on the surface, but the arguments are often sketchy at best, and the pandering to/expression of outrage often dominates any attempts at clear analysis.

FrustratedMonky• 1 year ago

Perhaps if there was a tighter line pointing at corporations using 'apps'.

Traditional rental property corporations, were pre-existing, and also adopted the use of an 'app' that allowed them to raise prices over the inflation rate.

So, traditional corps, taking advantage of the new 'app-crime-for-free' model.

But really, where the logic broke down a little. Was all those 'crime-apps' are actually reducing prices for most part. So should help inflation not hurt it.

qwerty_clicks2• 1 year ago

While some of the article’s leading point in apps doesn’t clearly connected to collusion to raise egg prices, it’s all valid. Tearing it all down is sore of you.

1vuio0pswjnm7• 1 year ago

https://idioms.thefreedictionary.com/methinks+thou+dost+prot...

More on Potatotrac:

https://fingfx.thomsonreuters.com/gfx/legaldocs/byprmmxmwve/...

https://ia800109.us.archive.org/34/items/gov.uscourts.ilnd.4...

elicksaur• 1 year ago

The fact that this is seemingly the top comment shows how entrenched HN’s typical user is in making money off the predatory practices articulated thoroughly in the article.

n2d4• 1 year ago

The title should be about monopolies, because while I was curious to read arguments on why Uber and Airbnb should be illegal, instead I got an article about cartels in some of the most traditional industries.

Feeling disappointed.

philipwhiuk2• 1 year ago

What happened to BoingBoing - I was surprised when I read the author was Cory Doctorow.

ftwynn• 1 year ago

Doctorow left BoingBoing in 2020 if Wikipedia is to be believed (though that roughly tracks with my memory).

He's been doing his own thing on Pluralistic ever since.

greyface-8• 1 year ago

Inflation is one of the most politically salient factors of this decade
Inflation has lots of causes, it's true.

https://fred.stlouisfed.org/series/M2SL

Algorithmic price fixing is certainly a not-insignificant part of the issue. But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period. When doing causal analysis, we need to examine both the private sector and our government.

When you use M2 as denominator for egg prices, we're at the same place we were in early 2016: https://fred.stlouisfed.org/graph/?g=1DcVw

cluckindan6• 1 year ago

Increase in money supply only causes inflation if the money is spent on purchases of items with inflated prices (say, ferraris instead of basic food items).

When the basic food items become ferraris, people have no choice on that.

Aurornis2• 1 year ago

Increase in money supply only causes inflation if the money is spent on purchases of items with inflated prices

The economy doesn’t work like that. You can’t inject money but only have it apply to specific sectors.

Everything is interconnected in the economy. If a lot of money comes into the market it will cause a lot of activity, changes in demand, new job openings that entice employees upward, increased wage demands for jobs, new hires requiring higher wages, rising costs to cover those wages, and the cycle goes on and on.

You can’t isolate the effects of inflation. At the scale of economies, inflation effects ripple through everything.

Also, eggs are a terrible indicator. Did everyone forget about the bird flu? It’s a supply problem.

lesuorac3• 1 year ago

But it's strange to see zero acknowledgement of the massive increase in money supply over the same time period.

Because when you look at inflation in the period of say ~2000 to ~2025 [1] it's really not very obvious that there's an increase in M2 from '08 onward.

Talking about M2 as a source of inflation is like shouting Red at a roulette wheel. Sure, sometimes the ball will land on Red but your shouting is a non-sequitur on the result.

[1] https://fred.stlouisfed.org/series/CPALTT01USM657N

VirusNewbie• 1 year ago

Because true inflation isn’t CPI!

greyface-8• 1 year ago

The CPI time series you provided is monthly % change. Here's M2 in those same units: https://fred.stlouisfed.org/graph/?g=1DcYJ

They look pretty similar to me. Chaotic in the short term, but averaging positive between 0-1%. In other words, slow but consistent exponential growth. I didn't say anything about a discontinuity in '08, I'm not sure what point you're trying to make with that.

Edit: here they are both plotted side by side in those units: https://fred.stlouisfed.org/graph/?g=1DcZr

miltonlost• 1 year ago

ok, but does the increase in money supply explain the price collusion that businesses admit to doing? You're bringing up an issue that's not pertinent to companies criming.

greyface-8• 1 year ago

I'm addressing the part of the article that uses inflation as a framing device. If inflation is the motivating issue, then we are turning a blind eye to the elephant in the room. I don't disagree with the criticisms of price collusion criming.

JumpCrisscross14• 1 year ago

does the increase in money supply explain the price collusion that businesses admit to doing

Why would one cause of a phenomenon explain another cause?

The hypothesis "both wood and plastic burn" doesn't require wood to explain to existence of plastic.

fransje263• 1 year ago

https://fred.stlouisfed.org/series/M2SL

This graph is absolutely insane. As I am completely unfamiliar with what is represented, would you have some pointers on where to start to understand what it represents?

I'm particularly intrigued by the very sharp rise during the covid time, when the global economy was in taters.

daedrdev3• 1 year ago

It's not as insane as it looks. They changed the definition of M2 in 2020, which means we expect to see a jump right then

greyface-8• 1 year ago

https://en.wikipedia.org/wiki/Money_supply

cudgy9• 1 year ago

Go to the settings of the graph and set the graph to logarithmic. Growth is linear.

dd3612• 1 year ago

For money supply to be inflationary it has to increase demand or reduce supply for a given product.

It sounds neat but there’s little evidence of that occurring on more than a temporary basis during covid. But covid also caused supply shocks.

It seems that what happened is covid showed companies what they could get away with both because of decades of consolidation and because of new ways of colluding.

greyface-8• 1 year ago

More dollars in circulation chasing the same supply of products = increased demand for those products, in dollar terms. I'm not looking specifically at the COVID spike (which, indeed, seems to be over from a monetary policy perspective), I'm looking at the longer term continuous exponential increase in money supply.

tarr11• 1 year ago

The article referenced in there about Lamb Weston and MvCain foods and goes into a lot of detail about how prices get determined in this market.

The “behave themselves” comment was certainly juicy, but the entire multi thousand word article is about how these companies are in an intense competition in a low margin industry. Here’s an example:

Former VP of International at Lamb Weston Well, McCain came in at a better incentives than Lamb Weston, and Lamb Weston maybe felt complacent and said, no, we're going to keep this account, and they lost it. That was a blow to their ego. They lost the Wendy's business. They lost the majority of their Wendy's sales to Cavendish Farms, which was 200 million pounds plus. So they've lost some major accounts. Tegus Client Because they refused to concede on the price mostly? Former VP of International at Lamb Weston That's correct. They could have kept the business if they conceded on the price. But there's a cost to conceding on the price as well. I mean there's a cost, but there's also cost to not to concede. I'm not sure when they're going to get the Aramark's business back or if they ever get it back. They've got to pay us to get Aramark's business again. They're going to have to do exactly what McCain did, try to maintain it. Tegus Client Right now, this sounds more like a good competitive market. So how does this tie back to just Lamb being silent on the price increase and McCain like leading again? Former VP of International at Lamb Weston Well, they felt that they're not going to give McCain Foods the price increase. The price increase never happened. Even though it did get announced, it never did happen. So this is one of those battles that may be short-lived, but it could be long-lived. It could be a couple of years because McCain, a privately held company, they're not subject to the stock market or the analysts asking them difficult questions, even though most of them don't ask difficult questions to Lamb Weston. So they're independent. They can do what they want to do. The 2 major shareholders are the second generation, Scott and Mark McCain. Their EBITDA exceeds $1 billion a year, not bad for 2 young men that inherited the business. So they're not really in any hurry to concede to Lamb Weston or to say, okay, I'm just going to forget this. It could be tit for tat down the road, could be. Or they may just say, let's not go there, let's just try to raise the price. If Lamb tries to raise their price in September, you asked the reason why would they raise prices if they had a cost reduction on potatoes, they're going to raise prices because inefficiencies in the plant, COVID costs, they're going to mention that. They're going to talk about ingredients, oil consumption, cardboard up and all. So their COGS have increased even though potato prices would have been reduced.

https://app.tegus.co/guest/document/view/67Hf3DiMGQ944SkfpRh...

bschne5• 1 year ago

These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period

The only one I found a time series for quickly is Lamb Weston: Their margins steadily went down after 2019, then surged quite substantially, and by the end of 2024 were more or less back at their 21/22 low points [1]

Additionally there's apparently a class action suit against the companies mentioned which was filed in November 2024 [2]

I don't know enough about this market to judge whether something shady happened, but it seems like both of those facts are relevant to this article.

1. https://www.macrotrends.net/stocks/charts/LW/lamb-weston/pro...

2. https://www.hbsslaw.com/cases/frozen-potato-products-antitru...

dd3612• 1 year ago

Margins aren’t an objective measurement. Margins are easy to manipulate through shell companies and other costs.

Just look at PBMs. They all supposedly have small margins. However, once you peel back the layers, you see rebates and kickbacks and all kinds of illegal schemes to hide the real income.

bschne5• 1 year ago

What is your hypothesis in this case? Something like "margins went down because of accounting shenanigans they only figured out a few years ago, surged so much because of price fixing that the accounting shenanigans were not good enough to cover it anymore, and then they figured out new accounting shenanigans to manipulate margins down to the previous low. And all of that in a way that overstated COGS or understated value of goods produced, because gross margins basically show the same pattern? I'm not in the potato business or an accountant, but curious to learn if you know more about this.

BIackSwan• 1 year ago

All these genre of articles are of the same vein.

- corporations are inherently evil. They are akin to criminals.

Every single time the author has never run a business that is equivalent at the scale of the business being criticized.

And they attribute to malice that can be explained with systematic incentives or complex interactions between various complex components in a dynamic world.

Its not the same as committing a crime.

mlhpdx• 1 year ago

Pepsi and microwave popcorn are food? Couldn’t get past that despite the valid point the author was attempting to make.

amluto2• 1 year ago

ISTM this really wants legislative action more than FTC action. “Price fixing with an app” should not be something probably illegal due to complex Sherman Act arguments that result in it taking years for the government to do anything about it. It should be directly an unambiguously illegal, with strong penalties (3x damages?) for both the companies using the apps and for the companies making the apps. And enforcement should be fast: the government should be able to entirely shut down these apps via a preliminary injunction.

And yes, maybe there should also be penalties applied personally to the executives who break these rules. But that’s a can of worms and it might be unnecessary.

throwitaway222• 1 year ago

Is this about CBP1?

bdndndndbve2• 1 year ago

I think the key insight that the article misses is that when consumers interact with an app they have an excess of trust in "the app".

I run an ecommerce site. It's hard as a small retail operation to keep inventory in sync and model the complex network of supplier relationships for special-orders: we can get some products in a day, some things in a week, some in 6 months. Nonetheless customers assume that the computer is the word of God, and that if the website lets them order a product that product must be available immediately.

When you make an app to do something that is illegal, people for some reason assume it is legal (or at least less bad) to do in the app. The presence of a computer intermediary somehow cleanses the action of moral ambiguity. I think this is because most people don't understand how computers work, and they assume that "the computer is always right".

This goes as far back as Babbage:

On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question

ogleopoly2• 1 year ago

The article isn't about consumer apps, though, it's about websites that all four companies in an industry use for "optimal pricing", which just launders collusion through a Python backend. I would considering giving the piece a reread.

bdndndndbve2• 1 year ago

I don't really see how doing collusion through a Python backend is separate from my point? They're doing an obviously illegal and immoral thing but wrapping it in a layer of technology which obfuscates and apparently legitimizes it. The consumer view is one aspect but the companies and regulators have the same perspective.

brap• 1 year ago

There is nothing wrong with raising prices.

barbazoo2• 1 year ago

They’re describing capitalism. The end state of capitalism is a single entity co trolling everything. We might not let the end state happen, we might stop at duopolies as described in the article but it’s not much better. It’s not a system benefitting regular people only the wealthy capital owning class.

afh1• 1 year ago

Thank god for those apps. Screw regulators.

zettler• 1 year ago

What is and isnt a crime is defined by who owns the press and power of the land

In any modern Democracy, it would be illegal to kick families out of their home and then rent the home out to wealthy westerners, yet that is literally what AirBNB allows, see Amnesty International take:

https://www.amnesty.org/en/latest/press-release/2020/12/airb...

technothrasher• 1 year ago

I was recently looking into my family history, and doing some research on my great grandfather's rural grocery store in 1930's Kansas. I found an old newspaper ad from the time where the four local stores were excited to offer a weekly sales program where each one would put a product on sale every week, and the other three would agree not to compete on that product. "Huh, that's an interesting gimmick... wait, wait, WHAT? How was that legal?"

DasCorCor2• 1 year ago

https://www.pave.com/benchmarking This feels like a similar way to control salaries.

jtotheh• 1 year ago

re uber and taxis: I don't use uber, but I just had occasion to price a ride to the airport (Dulles) from home (Bethesda MD) for Lyft and a taxi, and the taxi was a lot cheaper. We got there just fine.

vitiral2• 1 year ago

Why are there not local competitors to checks notes cook, bag and freeze potatoes at a 10x markup?

Might it be an overly large regulatory burden on starting said competitor?

ogleopoly2• 1 year ago

No, it's because it's not profitable to do so, and the big players will kill your business. This is also tangentially mentioned in the article... You think you can compete with PotatoCo, which makes billions of dollars, has massive scale, owns several Senators, and which every last potato farm in America is already using? And you want to blame the food regulations that keep people from getting sick and dying?

But sure, just go "start a frozen potato company". Why didn't anyone else think of that until Hacker News?

vitiral2• 1 year ago

owns several Senators

This is the regulations I'm talking about.

just go "start a frozen potato company"

No thanks, I bet the regulatory burden is absurd

killerstorm• 1 year ago

Well, it used to be a crime to offer a communication service without government explicit approval.

But an app like Skype made it possible for people to communicate for free. Was it bad? Do we need government to define what kind of business people can conduct?

insane_dreamer4• 1 year ago

More like "not a crime if a cartel of corporations does it" - not so sure it has much to do with an "app".

Useful analysis of consolidation and resulting price increases due to "inflation", even if the title could use re-wording.

Interesting that -- especially in an election cycle -- the government is blamed for "inflation", whereas a large contributing factor -- and the main one in this case -- are companies which control a market segment leveraging opportunities (COVID supply chain breakdowns, etc.) to increase their profits at the expense of the Average Joe.

We recently had to do a shower remodel. The salesperson told us that the price was 50% higher now than it was pre-pandemic. Prices shot up during the pandemic due to the known supply chain issues, but never went back down even after those supply chain issues are resolved.

Another good example of this are road bikes (I'm a cyclist): You could get a nice carbon bike for $2500 before the pandemic. Now it's $5000 for essentially the same thing. This is not explained by supply chain issues or an increase in the money supply.

kjkjadksj3• 1 year ago

To an extent costs did rise. All sorts of materials are costlier. Rent is higher. Labor is paid more. Pre pandemic was what 6-7 years ago at this point, thats a long time for prices to stay flat. If companies like trek were making appreciable more profit margin today than 7 years ago, it should be apparent in their quarterly reports no?

insane_dreamer4• 1 year ago

Not expecting prices to be flat.

But the cost of raw materials did not rise 50% to 100%, neither did wages. Residential rents jumped, but commercial rents -- which is what would affect cost of business -- did not.

So there's not really any way to explain this other than companies along the chain realizing that the prices are sticking (meaning customers are still buying) so there's no reason to go back. But the reason that the customers are still buying is because in many cases, as the article brings out, there is serious consolidation of the market which means that there's not enough competition to push prices back down.

If companies like trek were making appreciable more profit margin today than 7 years ago, it should be apparent in their quarterly reports no?

Trek is private so we can't know. But in the original article the author cites examples of companies with a monopolistic position increasing profits. Also, it may not be the consumer-facing company -- Trek -- that is taking the bulk of those profits, but a supplier with a hold on the market (i.e., Shimano-SRAM duopoly) that is.

charles_f2• 1 year ago

What I find terrifying with the system is that it's not enough to earn a living. You have to get rich. There will be no stopping until the complete market domination and then the line needs to continue going up significantly somehow. Dominate, then exploit.

Take Netflix's incessant price gouging. Or all the examples in this article. It's always funny seeing telco operators complaining about regulation and pleading that they'll self regulate and be good citizens.

tzury• 1 year ago

If 80% of goods in my shopping cart experienced price increases above the current inflation rate, wouldn't these higher prices contribute to a new, higher inflation rate?

After all, inflation is measured by tracking changes in consumer prices.

kbr-• 1 year ago

Surely there must be a way to counteract this with an app...

johnrob• 1 year ago

Interesting that if people took their health more seriously, the food companies mentioned here would struggle to survive regardless of pricing power. Total addressable market would plummet. I suppose one way to accept the status quo is that these companies are self levying a vice tax.

rambojohnson• 1 year ago

what a dog shit article. The claim that "apps" enable financial misconduct is unsupported, and the title's questions are left unaddressed. The central argument—that traditional companies are driving inflation—is never substantiated. The final paragraph reveals a fundamental misunderstanding of economics, suggesting that prices should fall once inflationary pressures ease, which is incorrect.

This severe lack of economic insight undermines the rest of the article's credibility for me. and at 500k upvotes, I'm really starting to question even bothering with this community anymore. Bot votes?

sotix• 1 year ago

Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 – and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.

I understand there will be a demand for French fries from consumers, but you don’t have to serve them. This is something I appreciate about Greek cuisine. There are so many wonderful foods spawned from input constraints. Sugar was a luxury in Greece during the 20th century while honey was more readily available, so you see many desserts sweetened with honey. The Lenten and nativity fast call for essentially a vegan diet, so there are numerous recipes that don’t require animal products and are cheap to make. Eggs and lemons were readily available, so they created avgolemono soup, which is a modest, yet delicious dish.

The overall American cuisine seems unwilling to adapt. The tricky bit is, that’s probably correct from a business standpoint. I’ve heard, “If we don’t sell hamburgers at airport restaurants, they’ll fail.” from a consultant in the airport terminal industry. It’s as if we’ve grown to expect seasonal fruit and vegetables year round as a mindset for our cuisine. Surely, there’s room to be more flexible with what we eat, which would allow business owners to serve food based on what’s readily available and cheaper for them to serve.

Now if absolutely every type of food is experiencing price gouging, that’s hard to get around. But I think there’s some middle ground, which requires serving different food items.

emorning3• 1 year ago

I think you meant its not a crime if you can afford it.

locallost• 1 year ago

These companies have been hiking prices for years, but really started to turn the screws during the post-covid inflationary period. One of Schwenk's sources is Josh Saltzman, owner of the DC sports bar Ivy and Coney. Ten years ago, Saltzman charged $3 for fries; now it's $6 – and Saltzman's margins have declined. Saltzman has a limited number of suppliers, and they all get their potatoes from Big Potato, and they bundle those potato orders with their other supplies, making it effectively impossible for Saltzman to buy his potatoes from anyone else.

I've had the same opinion for a while now. Something has malfunctioned with the market economy if jacking up prices does not bring in competition that can do it for less.

ryukoposting• 1 year ago

I will continue to shout this at clouds and hope something changes:

As tech industry practicioners, we are some of the only people in the country who have both the desire to affect positive change, AND the agency to do so. Don't work for these companies. If your company does business with these companies, criticize it and encourage your coworkers to do the same.

titanomachy• 1 year ago

It's possible that the folks who find themselves working at Potatotrac are not genius leetcoders who can get a new FAANG job anytime they want. They're probably just ordinary people trying to make enough money to buy an occasional $10 potato for their family.

Airbnb or Uber, on the other hand...

Terr_3• 1 year ago

It's also unlikely that the person working on the Russet Quality Calculator feature has any knowledge about the market shares of each customer and their boardroom deals.

ok_dad• 1 year ago

I guess it's okay to have no morals in a tough situation, even if that is the very point in your life where you prove that you actually have morals.

gampleman• 1 year ago

And I think the excitement of how many crimes it won't be if you commit them via AI is one of the main economic fuels of our current tech bubble.

w10-1• 1 year ago

Profits are higher when cooperating than competing.

Cooperation is easier than ever now, and happens transnationally and locally.

Sellers generally have more sunk investments than buyers, and hence more market power.

Regulators gain more by cooperating as well, and industries embrace regulation that reduces competition especially new entrants.

It’s easy to explain but hard to address.

missinglugnut• 1 year ago

The food companies accused of gouging are mostly publicly traded corporations that publish their finances...if profit margins shot up we would be able to see it, but everyone who does the analysis finds margins are mostly steady, slightly down overall. Yet the bullshit claim persists.

Here are some better explanations: - the "breadbasket of the world" (Ukraine) is at war - wages are up in the agricultural sector (a good thing overall but it's not free) - egg shortage - years of government deficits have massively increased the money supply...(more money chasing the same economic output)

nroets• 1 year ago

The central message of this article is that huge companies are bad because they make large profits.

But there are many countries were companies cannot grow huge because the underlying economy is small and not part of a large trading block. (Georgia, where I'm currently living, is a good example).

People are worse off in these countries: Wages are lower in dollar terms. Locally produced products are of poorer quality and cost more.

So, although huge companies make big profits, their economies of scale do benefit their customers and staff.

nailer• 1 year ago

Heritage Foundation economics that insists that monopolies are "efficient"

That’s not correct. The Heritage Foundation does not state that monopolies are efficient, their stance on antitrust laws and monopolies emphasizes *consumer welfare and economic efficiency* over simply protecting smaller businesses or achieving other social goals

https://www.heritage.org/government-regulation/report/antitr...

efitz• 1 year ago

Lately I have been trying to propagate type ideas:

(1) corporations are not people. They are groups of people acting in concert under the direction of a small number of, or even one, person. They get legal immunities that individuals and unincorporated companies don’t. It is bat shit crazy to legally treat them as people for the purpose of “rights”. They don’t have morals (literally corporations are amoral entities). They concentrate power. We should be limiting them; not doling out rights to them.

(2) the best way to limit corporate power is to make it undesirable to centralize too much corporate power. I think that corporations should have a tax rate base on power - eg increasing based on revenue and number of employees and market share. The rates should increase with increases in any of these numbers. If done correctly, it would eliminate the need for antitrust and much oversight as it naturally deters centralization. Lots of details like shell corporations controlling other corporations, etc, but do-able.

TrapLord_Rhodo• 1 year ago

I agree with you, but not your solution in 2. Market share is shaky data to quantify at best, and you'd just incentivice software companies over manufacturing companies for tax purposes (Since software has lower employee count, and hardware software are going to extribly linked going forward)

There needs to be a way to reverse IPO companies as spin outs much easier, with some kind of government incentive to do so. It would unlock alot of value instead of causing it to be withheld.

Some examples of this would be google splitting out search, youtube, and AI products, with the datacenters and IP staying under alphabet.

amai• 1 year ago

Thank god we don't have such nasty monopolies in IT.

ovalwingnut• 1 year ago

I haven't been this intrigued since I found out my 'hot sister' was adopted. Just saying ¯\_(ツ)_/¯

dd3612• 1 year ago

I’ve noticed “let us price it for you” appearing in ever more apps and services. Seatgeek most recently.

hnburnsy• 1 year ago

Cal-Maine Foods, owns practically every brand of eggs in the case: Farmhouse Eggs, Sunups, Sunny Meadow, Egg-Land’s Best and Land O’ Lakes.

I wonder what else is inaccurate in this article...

"As of my last knowledge update in October 2023, Cal-Maine Foods is one of the largest producers and marketers of shell eggs in the United States. The company has a significant market share in the egg industry, often reported to be around 20% or more of the U.S. market."

zamus1• 1 year ago

This article is a total bullshit.

The inflation after covid was caused ONLY for printing money with the covid excuse.

All Those "cartels" existed long before covid, and why they didn't raise the prices before?

If you rise the price, you open a space to other companies to sell at lower prices.

But if you print money and not grow the production of good and services, the money will worth less, making everything more pricey.

silexia• 1 year ago

When did HN start supporting and sharing Communist ideas like that government regulation solves things? Government regulation almost always protects incumbents, hurts innovation, raises prices for everyone, and creates corruption.

It's not a crime if we do it with an app

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