Lefties Hate Monopolies unless It’s the Government

Christchurch. Venice. Barcelona. They’re all calling for limits on big tech.

It’s not an entirely original idea. People have sung that tune before.

For centuries in fact, we’ve seen success, have grown jealous, and then have wanted to stand in its way. We call it tall poppy syndrome here in Oz. But it pops up all over the world.

Of course, big tech has done wrong. They’ve invaded our privacy. They use our data…sometimes without our consent. And this is one of the only times politically left-leaning voters will tell you we need competition.

Competition is good for consumers, they say. With competition, prices decline, output increases, and society is better off, they add.

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And it’s all true. Competition is good for society. But that’s not what the lefties care about. What they want to do is use competition and the threat of corporate break up to mould the world into one they desire.

So when they say a company like Facebook are at odds with capitalism, they’re completely right. Where is the competitor for Facebook in the West? Where is the competitor for Google?

Yet does that mean we can go ahead and forcibly break up these companies? Google and Facebook have spent billions, hundreds of billions to create natural monopolies.

Now, just because the people deem it right, is it OK to take it all away in the name of competition?

They love centralised control

Envy has taken grip. And I’m beginning to think it’s part of human nature.

Does it please you to see a neighbour become incredibly wealthy overnight? Does it make you feel better to know he didn’t work as hard as you to get it?

Of course not!

Great thinker Bertrand Russell tends to think envy can also explain humanity’s strive to do better. We compete harder when we know others are ahead. We fight for equality of opportunity when we see others with an unfair advantage. Or at least, we used to…

Lefties now look at companies like Facebook, Google and Twitter and they’re overcome with envy.

‘Facebook is benefiting off my data,’ they say. What’s more, platforms like Facebook, YouTube and Twitter have become unsavoury platforms, used to spread hate, they add.

It’s why the lefties are trying to convince us all that a company like Facebook is not a platform, but a publisher.

Anything uploaded to those networks must be something that Facebook or Twitter has approved and let through. Even companies like Airbnb and Uber are copping flak.

John Davidson over at the Australian Financial Review (AFR) says it’s more than just a few nasty comments.

Cities are hollowing out. Homelessness is on the rise. Taxi drivers are being hard done by. And it’s all because of big tech. Davidson writes:

In Venice, the city is fighting for its right to regulate the number of tourist beds that are available, a number that has skyrocketed since the appearance of Airbnb, helping to clog up the city with tourists and to jack up rents to the point where renters claim they’re being forced out of the city.

The city of New York has complained of the same thing — in April last year it released a study showing that Airbnb was having a significant impact on rental prices, in some neighbourhoods jacking up prices by more than 21 per cent — and warned that the sharing economy is contributing to homelessness.

‘…Meanwhile, Uber’s techtopian ideal — that a simple app can be making more efficient use of automobiles that have already been built — comes at a high cost for some city dwellers, too.

After protests by taxi drivers — who complained amongst other things that their fares are tightly regulated by the city, while Uber is free to jack up prices willy nilly, whenever there’s a football game — the city of Barcelona tried to level the playing field, introducing rules and regulations which it hoped would see less money flowing to the San Francisco-based technology company. (San Francisco is another city that has been hollowed out by the tech sector, but for other reasons.)

Whatever happened to good old fashion competition, eh? When big tech dominates or disrupts markets, there are more than a few interest groups looking to either keep them down, regulate them or ban them completely.

But just you watch. Those same people screaming ‘break up big tech!’ will be more than happy to give favourable treatment to the meek.

Again, I think there’s a small group of people pushing all this for the wrong reasons. They don’t care about competition. They don’t care about ‘the people’. What they care about is their viewpoints and their opinions.

Where are these outraged lefties when the government takes control? Nowhere…they love centralised power!

A disgusting return for the government

The NBN is a good example.

The government has given the NBN Co a controlled monopoly on the national fixed line residential broadband network.

Telecoms are more than welcome to build their own network. Except they need to pay out of their own pocket. The NBN Co graciously took taxpayer money to kick the whole thing off.

Seems a bit unfair if you ask me…

But the NBN Co seems to be going one step further. Instead of sticking to their wholesale duties, meaning they deal directly with companies like Telstra and TPG, they may be bypassing telcos and heading straight for customers.

The AFR writes:

Major Australian telcos are demanding NBN Co stop aggressively targeting their business customers, a move they claim is breaching the government-owned infrastructure provider’s strict remit as a wholesaler.

TPG Telecom executive director David Teoh said NBN Co had been directly contacting his company’s business customers, promoting its high-speed fibre optic broadband.

“They approached some of our customers,” Mr Teoh said. “We complained multiple times, but it’s what they did. [We complained] to the government and also to them.” But he said the complaints did no good.

…TPG’s chief operating officer Craig Levy said: “They [NBN Co] have the responsibility of rolling out the infrastructure into the customer’s premises and they have to co-operate and do the delivery of the actual fibre infrastructure. But I’m told customers have actually agreed to take a proposition that’s based on the NBN. That’s an area that they really shouldn’t go into.”

Maybe the NBN is trying hard to meet their targets. Apparently, NBN Co has a $1 billion sales target, 20% of which should come from business channels.

Or maybe NBN Co is trying to lift their disgusting return on investment. Word is NBN Co generates an average revenue per user of $44. They’d need to lift that figure to $51 to achieve a measly internal rate of return of 3.2%…and this would allow them to remain a commercial enterprise.

Pfft. Some enterprise…

It’s why many businesses are building out their own networks. Some of which will be far better than the NBN. And I detail one such company in a brand new report that went live yesterday…

Not only could this Aussie small-cap build a faster network than the NBN…this relatively unknown small-cap could see hundreds of Aussie businesses stream onto their books in the months ahead.

Your friend,

Harje Ronngard,
Editor, Money Morning

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Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read. Money Morning Australia is published by Port Phillip Publishing, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


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