There are two forces at work there. First is that without being granted a monopoly by force, only really smart people manage to monopolize an industry (think Google).
The benefit monopolies offer is not just that they’re good investments, but that they concentrate wealth in the hands of someone smart enough to monopolize something. Wealth tends towards entropy, so brief concentrations of it are a beautiful thing. And while markets are great at optimizing the last .1% increase in efficiently for a known process, they suck at paradigm shifts—unless there’s someone really smart with enough money to singlehandedly shift that paradigm. Google’s near monopoly on search has probably hastened the arrival of self-driving cars by a few years, saving numerous lives. Score one for monopolies! Even my least favorite monopoly, USG, has deployed money in interesting and otherwise infeasible projects, such as landing on the moon and defeating the USSR.[1]
Second is integration and incentive structure.
One simple robust solution to the innovation problem would seem to be manic monopolists: one aggressively-profit-maximizing firm per industry. Such a firm would internalize the entire innovation problem within that industry, all the way from designers to suppliers to producers to customers – it would have full incentives to encourage all of those parties to put nearly the right amount and type of efforts into innovation.[2]
Yeah, very smart people are exactly who we want driving innovation. Just like how Thomas Edison and his monopolizing Edison Trust brought American electrical systems into the future by embracing AC power, instead of clinging to clearly inferior DC power for as long as possible.
</sarcasm>
If you expect monopolies to drive innovation, you're going to be disappointed. A monopoly doesn't promote paradigm shifts or destructive innovation. In fact, historically speaking, monopolies often take drastic steps to ruthlessly crush any such innovation.
In your second link, at least Robin acknowledges that, historically, there is no reason to expect monopolies to behave as described. Actually, the idea of a "manic monopolist" is fairly interesting. But, if a corporation already controls an industry, how do we incentivize it to take risks by promoting rapid innovation in that industry?
Yeah, I dont want smart people driving innovation. I want everyone to have the freedom to create and live their lives free and unhindered by the threat of violence, the encroachment of propaganda, or economic bullying- even if the bully is able to rationalize his actions.
This idea of giving all the smartest people the money is interesting- in the way that eugenics was interesting.
You can't know how the world would look if Google didn't have a monopoly, but instead there would be more competition. For example, advertising would plausibly cost less, which would mean that a million companies would have less expenses, and therefore more money to invest.
The benefit monopolies offer is not just that they’re good investments, but that they concentrate wealth in the hands of someone smart enough to monopolize something. Wealth tends towards entropy, so brief concentrations of it are a beautiful thing. And while markets are great at optimizing the last .1% increase in efficiently for a known process, they suck at paradigm shifts—unless there’s someone really smart with enough money to singlehandedly shift that paradigm. Google’s near monopoly on search has probably hastened the arrival of self-driving cars by a few years, saving numerous lives. Score one for monopolies! Even my least favorite monopoly, USG, has deployed money in interesting and otherwise infeasible projects, such as landing on the moon and defeating the USSR.[1]
Second is integration and incentive structure.
One simple robust solution to the innovation problem would seem to be manic monopolists: one aggressively-profit-maximizing firm per industry. Such a firm would internalize the entire innovation problem within that industry, all the way from designers to suppliers to producers to customers – it would have full incentives to encourage all of those parties to put nearly the right amount and type of efforts into innovation.[2]
[1] http://oddblots.tumblr.com/post/85817835358/stoptheslowlane-...
[2] http://www.overcomingbias.com/2014/04/rah-manic-monopolists....