Breaking hospitality/zoning laws is not 'competition'. (AirBnb)
Breaking taxi/transportations laws and regulation is not 'competition'. (Uber/Lyft)
Misclassifying workers to bypass employment laws is not 'competition'. (All 'gig' companies)
Operating unlicensed financial services is not 'competition'. (fintech)
Being given special content liability carveouts only to your platform is not 'competition'. (social media)
Evading antitrust norms via vertical integration is not 'competition'. (Apple app store and 30% rent)
Flooding the market with illegal or gray-area imports is not 'competition'. (Amazon)
Exploiting data without consent is not 'competition'. (all tech at this point)
Using investor capital to subsidize predatory pricing is not 'competition'. (almost all tech)
Every industry 'new' tech has gone after they have cheated, broken laws and/or had/pushed for (normally after the fact) special carveouts from the law so that they are the only ones in their field that get to operate a different way, used and harvested data in bad faith, used predatory unsustainable pricing practices.
Show me where tech has 'outcompeted' without doing any of the above. Where the product didn't need special protections/carvouts to existing law, didn't exploit data/peoples trust, didn't use investment capital to artificially lower prices, didn't utilize 'grey areas' to skirt barriers that ACTUAL competing companies obeyed, where the product delivered, on it's own, created a unicorn.
Edit: Responding as edit because I've been timed out. Apple is doing rent-seeking enforced through ecosystem control. This is traditionally seen as a monopolistic practice and historically/based on capitalist philosophy companies that did this were seen as a threat to capitalism and broken up/punished for this behavior. Rent seeking is explicitly anti-capitalist in classical economic thought.
This one is competition though. No one is forced to use Apple or develop for Apple. People purchase Apple because they like their products more than the alternatives.
From the Wikipedia entry on vertical integration[1]:
>Vertical integration can be desirable because it secures supplies needed by the firm to produce its product and the market needed to sell the product, but it can become undesirable when a firm's actions become anti-competitive and impede free competition in an open marketplace.
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>A firm may desire such expansion to secure the supplies needed by the firm to produce its product and the market needed to sell the product. Such expansion can become undesirable from a system-wide perspective when it becomes anti-competitive and impede free competition in an open marketplace.
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>The result is a more efficient business with lower costs and more profits. On the undesirable side, when vertical expansion leads toward monopolistic control of a product or service then regulative action may be required to rectify anti-competitive behavior.
Let's take copyright law for example. Set aside the fact that the entire basis of copyright law is EXPLICITLY to give businesses a "monopoly," which is the exact opposite of competition. Your issue with AI is that they are violating or trying to change the meaning of copyright law? How do you square that with the past 250 years of history of businesses successfully lobbying to strengthen and change copyright law in order to protect their monopolies and weaken competition?
Or let's look into taxi laws. Where for decades taxi medallion owners and fleet operators in NYC lobbied to prevent the city from issuing new medallions.
You seem to believe that laws increase competition and that resisting/changing/lobbying against the laws is meant to decrease competition, which is plainly untrue. Often the exact opposite is true, which is the very definition of regulatory capture.
Capitalism is a system that seeks to benefit the common man by incentivizing profit-seekers to compete to create new innovations, to deliver goods faster/easier, and to lower prices. It also seeks to disincentivize profit-seeking through non-competitive means that don't benefit consumers, e.g. monopolies, oligarchies, regulatory capture, false advertising, etc.
You ignored my point on copyright and 'what about'd your own as if that makes copyright law somehow not currently exist. Without copyright you would have market failure. Who will invest in Bob's business if Tom can just undercut him? Who would make a multi-million dollar movie in your world? Write text books? How can Bob start a business doing those things if he can't get investment? This is a BASIC premise of the modern economy. Modern society wouldn't exist, and historically western society (starting when first applied in the "An Act for the Encouragement of Learning" in the early 1700s) has understood and embraced it's benefit. Business can't build their business around ignoring the law and then say 'our business model won't work under the current law' and then benefit from first mover advantage because they started by making illegal moves. Capitalism is not anarchy, it works within frameworks and constraints, including the law. Rewarding lawbreakers with 'first mover advantage' or additionally in AIs case special new legal carvouts creates INCREDIBLY perverse incentives.
For NYC you are arguing that it's OK for businesses to ignore laws that impact them. I disagree, I don't believe capitalism is 'anarchy'. Capitalism MUST exist in a framework with government regulation, as classical capitalist philosophy points out. Again all you are saying is 'tech is above the law because I don't like the law' and 'breaking the law if it means profit is TRUE capitalism'. Business was free to push to change the law NYC. They are not free to just ignore the law. They should definitely not benefit from first mover advantage when they got to be first by breaking the law.
Please don't say what I believe, but instead respond on substance. I believe businesses should not build their business on ignoring the law, using BILLIONs in funding (which combined with business corporate legal protections shields them from consequences of breaking the law), in order to distort the market and force a carveout for themselves and give themselves an unfair first mover advantage. I don't think lawbreaking is competition or capitalism. I believe if a business created their market penetration through breaking the law that even if the law is changed after the fact that specific business should be banned from the carveout as they had an unfair/illegal first mover advantage versus those that followed the law. Your model encourages and rewards law breaking and unfair competition, not healthy competition/capitalist growth.
I seem to believe that we are a nation of laws, that capitalism exists with in constraints, on of which are laws, and that breaking laws that get in the way of billionaire founders wishing to exploit an industry segment isn't competition/capitalism. Breaking laws to get an unfair competitive and/or first mover advantage should be punished not rewarded, as to do otherwise creates horribly perverse incentives.
I notice you didn't point to a single legitimate/untarnished unicorn.
All I can see AI doing is entrenching those large enough to integrate it into their offerings in a meaningful way, and sustain a significantly lower cost base.
I use copilot at $10/mo. Gpt4.1 costs $2/m in and $8/m out. I'd do that in a single day, easily. There is no way any product I try and make can compete with that while consuming any meaningful number of tokens.
I think you are misunderstanding a fundamental part of capitalism and markets, which is leading you to incorrect conclusions.
You seem to be assuming that there are a limited number of business models out there, and that they need to be very specifically (and legally) identified and protected in order for the economy to thrive. Or how else could you come to the conclusion that the market would fail without copyright?
Not only is this not true, but it is exactly backwards. The precise opposite is true. There's an unlimited number of business models that are possible, and for the vast majority, government involvement and specific "protection" only serves to limit competition and thus innovation and to hurt the economy.
"Who will invest in Bob's business if Tom can just undercut him?" With this question, you neglect the obvious possibility that Bob simply will choose a business model that can't be easily undercut. The vast majority of business models do not rely on copyright law.
"Who would make a multi-million dollar movie in your world? Write text books?" This particular quote requires multiple responses:
(1) First of all, who cares? These are arbitrary business models, and it should not be up to you or me or the government to legislate them into existence. There are a billion trillion quadrillion business models that could theoretically exist that do not exist today, and the world is just fine. For example, imagine a world where you could copyright recipes, and the first person to make a pizza could make Pizza Inc., and they'd sell all the world's pizzas or license them out, and it would be illegal for anyone else to copy. And then I came along and said, "Hey, let's get rid of recipe copyrights." You would be sitting there saying the exact same thing, "@csallen, who is going to make Lasagna LLC or Salad Inc.? Who is going to invest in a huge recipe conglomerate if any tiny restaurant could just undercut them?" And I would give you the exact same response: who cares? We do not need some particular subset of business models to exist for the world to be okay, it is a failure of imagination to assume that particular business models that thrive in the current timeline are necessary or even ideal relative to what could be.
(2) It's arrogant for any of us to think we know so much about market dynamics that we can confidently predict that BusinessModelX cannot survive without CopyrightLawY. The entirety of the world's information exists online for free, and yet textbook companies still make money. You can get free online courses from MIT, yet colleges still make money. These things are easy to explain with the benefit of hindsight. But I bet you before the existence of the web in 1992, few experts would have predicted this to be the case. It's incredibly difficult to predict how market dynamics will play out because of the limitless ingenuity and creativity of the human mind multiplied by tens of millions of profit-seeking individuals trying to seek out an edge in the market. Even barring my "who cares, other alternative business models will pop up" argument, the idea that you or I know enough to have a top-down decree about what will happen to the economy if a particular business model disappears is incredibly unrealistic. The economy is formed in a bottom-up way, from trillions of individual actions made daily by consumers and businesses.
"Capitalism MUST exist in a framework with government regulation, as classical capitalist philosophy points out." This is one of the few points you made that I absolutely agree with, and that I think is fundamentally ignored by many supporters of capitalism, especially the libertarian types. Capitalism is essentially created by laws, and made possible by laws. I 100% agree. However, this brings me to the second part of my response to you.
2. Laws
I think you possess a fundamental misunderstanding of laws here as well, or at the very least, a severe difference in our attitudes and how we view the law.
Per my view, laws are imperfect. They are self-evidently imperfect. I can find any number of laws on the books right now that you yourself would agree should probably be broken because they are so ridiculous and in need of update, revision, or repeal that it would be unconscionable to actually follow or enforce them. Once you admit that even one such law exists, and yet remains on the books (and trust me, that number is much greater than 1), then it follows when and whether it is best to follow the law is a matter of subjective judgment. It is not a black-and-white issue.
Even our courts and legal systems believe this, and are organized around this principle. Laws can and have been thrown out as unjust or unconstitutional by the judicial branch, despite the fact that they were clearly violated. Laws can and have been ignored and unenforced by the executive branch and the forces it controls, despite situations where the law is clearly being violated.
Now, I am not an anarchist. I believe in the rule of law, and I believe that it makes life better. But again, it is completely subjective which subset of the law actually does so. And I don't think it's possible for any human to live without their actions agreeing with this, even if they ideologically pronounce a black-and-white stance.
Personally, when it comes to capitalism at least, the laws that matter to me are the laws that increase competition and that protect consumers. The entire goal is to incentivize people/companies to profit by competing, innovating, improving products/services/delivery, and lowering prices. And to outlaw every other form of profit seeking that doesn't benefit consumers (monopoly, collusion, bribery, sabotage, false advertising, regulatory capture, etc), in order to disincentivize companies from taking that path. In addition, there are regulations that exist to protect consumers and keep them safe. I'm a huge fan of this kind of law.
However, there are lots of unjust and poor laws that get put on the books, as I have already mentioned. Regulatory capture is a tremendous problem in a capitalist society: using the law to reduce competition for one's own benefit, at the expense of consumers, the market, the economy, and the country. This is not some rare, exceptional thing. It's a persistent problem that must be fought against. And the primary means by which unjust laws are fought and challenged is by breaking them (peacefully), and then taking things to court.
This is not anarchy. This is how the system was intentionally designed, and how it's been upheld.
So no, I don't subscribe to any sort of oversimplified black-and-white thinking about whether or not it is okay to break the law. Every case must be assessed and adjudicated on its own.
Personally, I don't care that much when Uber and Lyft deliver a product that people want, and it flies in the face of laws that were essentially written by the taxi lobbies. While there are exceptions (as I said, these things must be looked at on a case-by-case basis), I largely see those as unjust and anti-competitive laws, created in order to serve other corporate interests with millions or billions of dollars in backing.
While I agree with you that I don't particularly love the idea of companies using billions in funding to flaunt the law for their own benefit, I find it hard to understand why you are simultaneously so happy with companies using billions of dollars to write the law in a self-serving way. When these two forces go head-to-head, I will almost 100% side with whatever promotes competition and aligns with what consumers are demanding to pay for.
If I told you I dropped a million dollars in the Pacific Ocean, would you look for it? No. What if I buried it somewhere in California, would you search for it then? Still no. What if I told you it was somewhere in your home, would you search? Yes, and you would probably tear your house apart.
If you want to succeed you have to try, and it only makes sense to try if you believe that things are possible. It all starts there.
Also that's a very different use case as that product requires you to provide your own API key, so they're not wearing the cost of API calls. It's also a one-off fee, so hundreds of thousands per month seems like a huge number of sales.
Also that person had a great idea with typing mind.
Also your point is well taken about mindset. From a random person half way across the globe, I do want to say you've made a difference today haha, genuinely.