> I don't mind people who did both processes getting a fair return but we need to decide what a fair return is.
It's 9.8%. Over the long term, they'll average 9.8% per year and there's nothing we can do to change that.
Suppose for a moment that there was a very high return. Let's say 50%.
Microsoft and their Bing divison, along with Amazon and others would be watching that and thinking:
We have $50 million dollars to spend on our next project.
We can either spend that on developing a game console, with an expected return of 2%, or
on digitizing books, with a return of 50%.
Fire up the digitizer!
People generally invest in the type of projects that are getting the best returns. So due to the 50% return, you'd have Google, Microsoft, and Amazon all offering different versions of the service. Maybe Microsoft would have no ads, but it would only work in IE11 on Windows 8.1.
Amazon's would be similar to Google, but with fewer, more obtrusive ads for full books that float over the digital pages.
With two competitors, Google's return would decrease. Specifically, new entrants keep coming in with different (better, cheaper, etc.) versions as long as the return is higher than other projects. It turns out that "other projects" return 9.8%, on average. So anything with a risk-adjusted return higher than 9.8% draws competitors.
If money goes IN to lines of business where it'll make more than 9.8%, where does it come FROM? From shutting down (or foregoing) operations that make less, of course. Any business with a risk-adjusted return less than 9.8% has some providers leave the market for greener pastures.
With the competitors close, their market share goes to the remaining competitors, so the remaining people get increased returns. Specifically, competitors keep leaving and the return keeps increasing until the return is as good as other options - about 9.8%.
So that's what you end up with - in the long term, any industry in the US has a risk-adjusted return of about 9.8%. Some, like oil or farming, are subject to high volatility - good years and bad years. Exxon for example is affected by oil prices, so it goes up and down. Exxon averaged 11.62% over the last 10 years, 7.86% over the last 15 years - everything swings up and down around that 9.8% mark.