Tuesday, September 27, 2016

Monopolies in People

One theme from Peter Theil's book Zero to One was that companies that are monopolies pretend that they aren't, while companies that aren't do the opposite. He uses the example of Google which is so dominate in search that it has a monopoly and claims to not be just a search business since it has many other ventures. Other companies that are not monopolies, but really just commodities, will try to differentiate their brand and say they are better than the rest even when they aren't really that different from their competitors. This is mostly because a true monopoly is incentivised to avoid suspicion from business regulators.

I believe however that there is more to this and it is a reflection of human nature. If someone is truly great then they tend to not want to claim that they are. Instead they tend to act humbly and keep a low profile. It is those that aren't great (the pretenders) that tend to talk themselves up, flaunt, and have a need to show the world that they are better than they are. I see this today with the poor buying nice shiny cars that they can't afford and wearing expensive clothes. The upper middle class tends to hang on to their money a bit more and not flaunt their wealth. But the rich still buy expensive, showy things to prove their monopoly right? Well I think some of those driving around exotic cars may not be as rich as you think (but still enough to afford their expensive habits). But I think the real cover up is not how much wealth they have, but rather confidence. As one who is truly confident doesn't have to prove it to anyone, they just are.  I've been overgeneralizing as not everyone acts the same in the different income classes - and there are many factors at play, not just income. But some of the underlying forces that compel companies to show to the world that they are monopolies or not are the same as those for people.