IMNSHO there is actually a profound economic insight in there, which is that you will face a drag on economic activity whenever a private party owns a portion of the path to the consumer. Think of the path to the consumer in say the 1880s: you went to the local general store, you met the vendor in person, you handed over cash, you got the goods. Not many areas where a third-party could interpose themselves to collect tolls; maybe the general store owner could, and many of them ended up quite locally wealthy, but their profits were capped by your ability to go to the next town over.
Now think about today. You search on Google and they run an auction to charge the vendor for getting their products discovered. You go to their website, but their website needs to be protected by CloudFlare from all the people who would take it offline. You buy the product with your Visa, which takes their ~1.6% merchant fee. They sell it with Stripe, which takes their 2.7% fee. You pay shipping and handling for UPS or FedEx to deliver it. Local, state, and federal governments all take tax out of this. Increasingly we're getting national-level shakedowns like Iran charging tolls for the Straight of Hormuz now.
Note that it was similar in olden times whenever one party could control the flow of goods between producer and customer. Sea merchants made huge profits in the 1500-1600s. Standard Oil got to be huge with its control of the distribution infrastructure for oil.
European governments have actually woken up to this with passage of laws like the DMA, but the American government has taken the other tack and decided that if life is a massive shakedown it's going to get in on the extortion business.
alt Hacker News
IMNSHO there is actually a profound economic insight in there, which is that you will face a drag on economic activity whenever a private party owns a portion of the path to the consumer. Think of the path to the consumer in say the 1880s: you went to the local general store, you met the vendor in person, you handed over cash, you got the goods. Not many areas where a third-party could interpose themselves to collect tolls; maybe the general store owner could, and many of them ended up quite locally wealthy, but their profits were capped by your ability to go to the next town over.
Now think about today. You search on Google and they run an auction to charge the vendor for getting their products discovered. You go to their website, but their website needs to be protected by CloudFlare from all the people who would take it offline. You buy the product with your Visa, which takes their ~1.6% merchant fee. They sell it with Stripe, which takes their 2.7% fee. You pay shipping and handling for UPS or FedEx to deliver it. Local, state, and federal governments all take tax out of this. Increasingly we're getting national-level shakedowns like Iran charging tolls for the Straight of Hormuz now.
Note that it was similar in olden times whenever one party could control the flow of goods between producer and customer. Sea merchants made huge profits in the 1500-1600s. Standard Oil got to be huge with its control of the distribution infrastructure for oil.
European governments have actually woken up to this with passage of laws like the DMA, but the American government has taken the other tack and decided that if life is a massive shakedown it's going to get in on the extortion business.