Laura Belin - New bill is “clear attempt by MidAmerican to monopolize the sun in Iowa”

A new bill backed by MidAmerican Energy would devastate the ability of Iowans to install solar panels for their homes or businesses. House Study Bill 185 would undo a longstanding policy of net metering, which “allows residential and commercial customers who generate their own electricity from solar power to feed electricity they do not use back into the grid.”

Iowans served by monopoly providers MidAmerican or Alliant Energy have been able to use net metering since the 1980s, under rules adopted by the Iowa Utilities Board.

In recent years, MidAmerican has periodically sought to subvert net metering in various ways. Environmental advocates have been concerned the policy would become the next target for Republican lawmakers who destroyed Iowa’s decades-old, successful energy-efficiency programs last year at the behest of utility companies.…

Disclosure: I am a resident of Iowa (Iowa City).

Bleeding Heartland
New bill is “clear attempt by MidAmerican to monopolize the sun in Iowa”
Laura Belin

Dean Baker — The Patent Theory of Knowledge

I would call the patent theory of knowledge part of the rent theory of "free market" economics along with other types of enclosure of the commons since privatization and monetization are needed to avoid "the tragedy of the commons," since the commons would either go to waste or else be misused. Neoliberalism is not actually liberalism, since it is not about free markets and perfect competition but economic power and the development and extension of asymmetries of power, information, and access that disadvantage "commoners."

Beat the Press
The Patent Theory of Knowledge
Dean Baker | CEPR

Joshua Gans — Another choice: The Intellectual Property Strategy

Over the past two weeks, I have been outlining broad strategic options for entrepreneurs of which a disruption strategy is just one choice. The concept is that a given entrepreneurial idea can be commercialised in many different ways. The key to entrepreneurial strategy is to identify the feasible set of choices available to start-ups and to write a business plan for each. After all, you can’t have a strategic choice without actually having a choice and I maintain that entrepreneurs often have many more choices than they think at the outside.

Thusfar, I have considered two options that have in common that they are focused on execution. Recall that being focused on execution means that a start-up embraces potential and on-going competition and formulates a plan to continually beat that competition by developing and continually re-investing in capabilities that allow the venture to beat the next wave of competition on quality, cost or some combination of the two. However, in choosing to focus on execution, a start-up can choose whether to be oriented towards competition (and building out a new value chain in competition with established firms) or to be oriented towards cooperation (and work within existing value chains). These two strategies were termed disruption and value chain respectively and each might be the appropriate one to be matched with an entrepreneurial idea.

Today I want to turn to strategies that are based on investing in control rather than execution. As I pointed out in a previous post, investing in control represents a somewhat familiar — or textbook — path to earning monopoly rents (or competitive advantage) as it involves undertaking a strategy that gives the entrepreneur control over key resources or assets that themselves allow the entrepreneur (or others) to create entry barriers. Thus, in contrast to focusing on execution, control involves more investment upfront but then, if successful, an easier competitive life later on as the venture can live off the future monopoly rents as it would an annuity because its customers would have fewer options to switch out to in the future.…

Digitopoly
Another choice: The Intellectual Property Strategy
Joshua Gans

(h/t Mark Thoma at Economist's View)

Yves Smith — How Oligopolies Undermined Competitiveness and Produced Inequality

More on the neoclassical myth of the free market that provides the foundation for neoliberalism, neo-imperialism, and neocolonialism. Ordinary Americans were OK with neo-imperialism and neocolonialism when they were among the beneficiaries through trickle down. Not they are now noticing that they themselves are becoming marks. It always comes down to asymmetrical power, which the mob's crony-run propaganda machine in turn always suppresses.

Naked Capitalism
How Oligopolies Undermined Competitiveness and Produced Inequality
Yves Smith

John B. Judis — The Next Elizabeth Warren – Susan Crawford’s crusade against lousy, overpriced Internet providers

More monopoly rent from artificial scarcity.

New Republic
The Next Elizabeth Warren – Susan Crawford’s crusade against lousy, overpriced Internet providers
John B. Judis
(h/t Eric Ashelman via email)

James Allworth — Explainer: How Corruption Is Strangling U.S. Innovation

Tesla. Uber. Netflix. Most economies would kill to have a set of innovators such as these. And yet at every turn, these companies are running headlong into regulation (or lack thereof) that seems designed to benefit incumbents. The reason? The devastating impact of money in politics and how it discourages disruptive innovation among new businesses. Click through this explainer to learn more about legal bribery and U.S. competitiveness:

Harvard Business Review — HBR Blog Network
Explainer: How Corruption Is Strangling U.S. Innovation
James Allworth

Wenonah Hauter — The Elephants in the Room: Citizens United, Trade and Corporate Ownership of Our Natural Resources Read more at http://www.nakedcapitalism.com/2013/04/the-elephants-in-the-room-citizens-united-trade-and-corporate-ownership-of-our-natural-resources

Yves here. This is a short but useful reminder of how the failure to enforce anti-trust laws leads to oligopolies. MBAs are taught how to make markets inefficient to increase corporate profits, and one of the most lasting ways is to achieve a dominant position, ideally in a concentrated industry. “Roll ups” which is a consolidation play, is a favorite among private equity firms (but they often stumble in integrating the companies).

The author describes how dominant players preserve their profits through aggressive lobbying in the food space, and why that is particularly troubling.

Naked Capitalism
The Elephants in the Room: Citizens United, Trade and Corporate Ownership of Our Natural Resources
Wenonah Hauter | Executive Director of Food & Water Watch