Slashdot Mirror
The Winner-Take-All Trend In Tech (newyorker.com)
An anonymous reader writes: A pair of articles about the tech industry serve to highlight a growing trend. First, Om Malik writes in The New Yorker about the failure of ride-sharing company Sidecar, backed by Richard Branson, and how it's one more example of the winner-take-all tendency with modern tech firms. "This loop of algorithms, infrastructure, and data is potent. Add what are called network effects to the mix, and you start to see virtual monopolies emerge almost overnight. ... The more we use it, the more data we give the company, and the more it is able to control where we turn our attention."
The second article is from Jacques Mattheij, who notes a different side of the trend toward one winner and a whole lot of losers: unnecessary reliance on cloud-based components to force vendor lock-in. "In many of these cases if you look a bit more closely at what is being sold you'll realize that these are just instances of a business-model that was grafted on as an afterthought onto something that would have worked really well stand-alone but where the creators weren't happy with a one-time fee from potential buyers." Companies who hit it big early can't help but stay dominant if they force users to rely on their servers.
The second article is from Jacques Mattheij, who notes a different side of the trend toward one winner and a whole lot of losers: unnecessary reliance on cloud-based components to force vendor lock-in. "In many of these cases if you look a bit more closely at what is being sold you'll realize that these are just instances of a business-model that was grafted on as an afterthought onto something that would have worked really well stand-alone but where the creators weren't happy with a one-time fee from potential buyers." Companies who hit it big early can't help but stay dominant if they force users to rely on their servers.
That's the pre-Enlightenment view of economics. In fact, the reason the Wealth of Nations was such a breakthrough is because it recognized that individually selfish actions in a free market promote the "common good".
And it's the best way of promoting the "common good" that we know, because if you try to replace the free market with politics and government, you end up with not a few players at the top (where "few" in reality means tens of thousands or even millions, depending on how you count), you end up with one player, namely the government. And that one player is run by people who are just as selfish, power-hungry, and greedy as the CEOs of major companies. But unlike those CEOs, they are not constrained by market forces, and they can use violence against anyone with impunity.
Yes, free markets suck, but they suck a lot less than all the known alternatives.