Tronc is the most hapless and incompetent publisher in America, and no one should operate on the assumption that anything it does makes any sense at all. Once the mighty Tribune Publishing Co., dating back to the 1847 founding of the Chicago Tribune and worth some $17 billion after the acquisition of Times Mirror in 2000, it’s now a punchline with a total market capitalization of $560 million. Trying to learn how to run a company from Tronc is a bit like trying to learn international diplomacy from Donald Trump. But failures can be just as informative as successes, in their own way, and the history of Tronc is an important lesson about capitalist incentives.

Certainly, there’s nothing edifying about the spectacle of a once great New York newspaper being eviscerated, with dozens of great journalists losing their jobs, even as Tronc’s skeevy former chairman Michael Ferro is receiving $15 million to leave the company.

But the ham-fisted corporate raiding going on at Tronc is, bizarrely and depressingly, a textbook example of capitalism at work. What needs explaining is not the latest job cuts, but rather the fact that for so many decades, the Tribune Co. was an excellent place to build a career in journalism. Until recently, the best owners of newspapers have been newspaper companies like Tribune—companies that invested in large newsrooms and quality journalism and that didn’t seem to treat their trophies as wasting assets to be plundered until there’s nothing left to squeeze out.

There are two competing explanations for what happened. The first is that the owners changed and the new owners are more evil and rapacious than the old owners, and so capitalism is bad now. The second explanation is that capitalism is the same as it’s always been, and that while the new owners clearly don’t much care about journalism, maybe the old owners didn’t either. They looked as though they cared about it—and Steven Spielberg now makes hagiographic movies all about how much owners care about the primacy of journalism over profits—but in fact everything they were doing was entirely consistent with ruthless avarice and a need to maintain their local monopolies at all costs.

Under capitalism, the rentiers who own or acquire corporate assets—people like Michael Ferro—seek to maximize their return on those assets. (If it makes you feel any better, Ferro lost money on his Tribune bet, even after receiving that $15 million.) If a company is losing money, they try to make it profitable; if a company is profitable, they try to make it more profitable still. In other words, even when a company is making lots of money, capitalists will still be lauded for firing as many people as they can. Just ask Jack Welch or Jorge Paulo Lemann.

So, back when Tribune and other newspaper companies were riding high, making lots of money, and employing thousands of journalists, why did they not fire large swaths of those journalists? Didn’t they have every incentive to do so? After all, their newspapers were invariably either monopolies or duopolies, which meant that their readers and advertisers had very few alternatives. Since all revenues come from either readers or advertisers, a reduction in the breadth and quality of the journalism would have little effect on revenues. And if you can maintain constant revenues at a lower cost basis, that means even more profits for the rentiers.

It’s surely true that, on some level, the publishers enjoyed the social cachet that came with their papers and liked being complimented on their quality. But their decision to keep employing all those journalists made perfect sense on a financial level as well. That’s because their profits weren’t really a function of their journalism; instead, they were a function of their local monopolies. When you have a monopoly, you have enormous pricing power and can make huge profits. As a result, every monopolist’s worst nightmare is competition, and all monopolists spend a lot of time strategizing about how to ensure there isn’t any.

One extremely effective way of preventing competition is to build an impregnable “moat,” or barrier to entry—to make it clear that the upfront costs of attempting to compete would be so enormous that even successful entrants would never recoup their initial investments. And that’s exactly what local newspapers across America did during their heyday. If you wanted to compete with the Chicago Tribune or the Miami Herald or the Washington Post or the Los Angeles Times, then you would need to publish a product of comparable breadth and quality—otherwise, why would anybody switch? But all those newspapers boasted high salaries, multiple foreign bureaus, extensive investigative operations, and generally the kind of cost structure that no startup could compete with. And so no startup did. Alt weeklies had their day but never really constituted a competitive threat to the big monopolies; their product was a supplement to the daily paper rather than a replacement for it. And so each of the big papers had their enormous markets to themselves, or at worst were part of a comfy duopoly.

Spending more than they needed to on journalism, then, was less an altruistic act than a strategic imperative—a way to keep all those juicy revenues for themselves, instead of having to share them with a competitor. And it worked very well, until the internet leveled the playing field, and it was just as easy to get international news from the BBC or the New York Times as it was to get it from your local paper. At that point, the papers’ moats disappeared, and the strategic imperative to overspend on journalism disappeared with it. A few families, like the Grahams (who own Slate) and the Sulzbergers, kept the journalistic faith, and ownership by one of those families, or by a mega-rich hobbyist like Jeff Bezos, now seems decidedly preferable to ownership by a faceless corporation.

Newspaper companies across America, including Tribune, were always going to adjust to the new reality by doing what capitalists always want to do, which is slash costs. Once their very expensive moats became useless, they set about destroying them. They might have spent decades paying lip service to the importance of quality journalism. But when they no longer needed to pay for it, they stopped.