Re: poly: Why interest rates may stay low

From: Hal Finney <>
Date: Fri Feb 27 1998 - 15:56:19 PST

Perry writes:
> You forget that this isn't some random company. Cisco Systems is one
> of the largest companies in the world, with a market cap in the
> stratosphere. (It is largely invisible because it doesn't make
> consumer products.)
> You also forget that I know quite a bit about the company in
> question. It legitimately *is* better than its competitors. It is also
> unlikely that you are going to manage to compete with it very
> effectively. They own all the best experts in the field, are very well
> managed, and very responsive to the customer.
> Microsoft is operating substantially out of the normal ballpark,
> too. You could easily compete with "Windows". Put together a few
> hundred people and write a clone. Nothing illegal about it,
> either. However, it hasn't happened. Ditto for their other software,
> too.

It seems that what happens here is that a barrier to competition arises
similar in effect to property rights. The company name becomes a valuable
asset, and it is protected. The company's technology becomes a de facto
standard and the costs to reproduce the tech closely enough to compete
are very high.

However this does not seem to change Robin's general point, which is
that the kinds of technological improvements we expect to increase
productivity over the next few decades are unlikely to be protectable
in this way. There will be specific companies which can carve out very
successful niches. But the general increase in automation, greater use
of computers, improved health and vigor of employees, new materials,
microtech and some limited nanotech, these are likely to be largely
commodity technologies. The typical manufacturer will not be able to
expect to have a monopoly on the use of any one of these, but rather
his competitors will also have access to the technology.

Received on Sat Feb 28 00:15:29 1998

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