Rory Sutherland - Why We Need Monopolies in Free-Market Capitalism

Rory is the Vice Chairman of Ogilvy and one of the best-known proponents of applying behavioural science to the business world. He founded Ogilvy Change to advise clients on how to employ behavioural science or ‘nudges’ to improve performance.

The Ogilvy Change team consists primarily of psychology graduates who look for ‘unseen opportunities’ in consumer behaviour – these are the often small contextual changes which can have enormous effects on the decisions people make.

Rory is the author of the bestselling book, “Alchemy, The Surprising Power of Ideas That Don’t Make Sense”. He has also hosted two Radio 4 series examining psychology and business including “Marketing: Hacking the Unconscious” and “Thought Cages”.

Rory’s TED Talks have been viewed more than 7.5 million times.

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[sickle]

One issue with government based monopolies is the top provider who wins the contract has a chokehold on the network and infinite lobbying power to continually shift things in their favor, vs the consumer's favor. No one has ever figured out a way to weed out corruption and bribery from easy-to-target gov-based choke points. It kinds of works when the infrastructure is available to multiple competing companies, but it really only works when the infrastructure is available to all companies, without entry fees and legal expenses that only 1 or 2 companies can afford.

[breft]

The government needs to stop acting like a business supporting business and switch to supporting people by regulating business and collecting appropriate taxes. The rest is hair splitting.

[jamiebee]

This is like a Ted talk but with swearing

[JonathanWrightZA]

South Africa is case in point of monopolies at their best and worst: National Party built them and operated them reasonably efficiently and added value to the (admittedly closed off) economy, but should have sold them off far sooner.

ANC ran them into the ground, looted them empty, removed billions of dollars in value from the economy, and drove millions into poverty.

[villeporttila]

Rory's point about English speakers (25:30) not needing to learn foreign languages is absolutely spot on, yet bafflingly misunderstood. It's usually smug middle class British people themselves, who think they're Chomsky because they can ask for a wine in Italian, pushing the idea that Brits are lazy because they don't learn languages

[thenoodlebuddy]

This man is such a genius in this silly world

[solus]

I see the main problem that wasn't addressed - once you've made a government-sanctioned monopoly, how do you then dismantle it or create a competitive environment after N years?

[ianlassitter]

Economically perhaps monopolies can occasionally help…however when a monopoly controls political and social messaging you create a nightmare and surrender control to them.

[RatBikerNotts]

Big Rory fan, his captivating delivery makes others seem bland and unwatchable in comparison.

[vonroretz]

Early electric car batteries were very heavy. That was the decisive factor apparently.

[jannyboe]

The initial part about the cars is wrong. Combustion engines won the day beacuse of their durability and their range. He is right about monopolies when they are publicly owned. BUT private owned monopolies tends to push prices upwards.

[HitchhikersGuidetoScience]

For non network things. This does kind of exist. Isn't that what patents do. Grant monopoly and incentivize innovation.

[s]

He doesn't acknowledge the fact that when the service becomes valuable the vendor starts price gouging. He makes a case for monopoly while ignoring the singular problem, which is if one company has all the control they can charge whatever they want.

A good example of this is power companies. This is a service that has tried to monopolize many times, but when it does they start sending their customers $10, 000 bills in the mail, and the government busts them up, or sets regulations that prevent them from doing this. Electricity is a service that started out as a luxury, but over time has become a necessity. If power companies had their way, they would be charging luxury pricing to make themselves richer, and the public good of electricity and the upward mobility it brings would be locked to only the most wealthy who can pay for it. This isn't hyperbole, electricity is often used as an example for natural monopoly.

See the history of the electric industry in the UK and US as an example. This is an industry that has to be heavily regulated to prevent surge pricing, and if you don't believe me look at what happens in Texas every time they have a snow storm. The only reason that happens is the lack of regulation and the companies use the excuse of "supply / demand" to demand customers pay outrageous rates. In reality this is price gouging in a disaster because they can.

[Ifinishedyoutube]

You realize you're talking about a utility? A government Monopoly is a utility. They can subcontract those out because with the user base is connected. These are usually run as services.

[philipnorthfield]

The simple question is in who's benefit are you intending the result of any intention to be ? the individual or the wider group. The answer extremely rarely turns out to either or, rather to what degree.

[rjScubaSki]

District heating via shared ground/water source heat pumps in dense urban areas. Utterly impossible to solve without being government imposed.

[normundsdambis]

Perfect! A lot good exhamples from history. Worths every minute:)

[x--.]

We already do this! Patents and copyrights are temporary monopolies granted to creators, businesses and inventors -- though copyright lasts entirely too long -- to spark that invention. a Business Monopoly seems completely reasonable to me.

[humanperson]

29:00 What he's describing has already been invented. It's called a patent.

[ktomeir]

That was very interesting, but there is a fundamental issue with using the government to do those things - it's success and failures are not affecting the people that make the choice in any way. Another more complex issue is that the agreement on what is a "good idea" changes, in my home country (which is a former British colony) we had several issues with using fax as a standard way to communicate with official government bodies for a few decades after everyone had already thrown away their fax machines. For the idea on the last minute, we also have a luxury tax of over a hundred percent on cars, and nobody thinks to change it now that every household in the median 20% have two of those. These problems are much more difficult to solve than finding a single rich person who is sold on your idea.