The alarm bells keep ringing on the tech quasi-monopolies that rule the Internet. There are two main issues to address: one is the ownership and control over personal data – this data rightly belongs to consumers, not network servers – and two is the positive network effects that drive these cos. to dominance.
How we analyze these tech titans differs along these two issues. Amazon, Apple and Microsoft sell products and product markets are not easily protected from competition. They are middlemen between producers/suppliers and consumers. I expect we will discover new competitive models to deliver goods and services, which will eat into these cos.’ dominance. The promise of blockchain technology is exactly to eliminate the middleman.
Google and Facebook are different animals. Search is starting to appear to resemble a public good, like public libraries. With the positive externalities of network effects, it also resembles a natural monopoly – the more people use a search engine, the better is the information obtained, meaning the search engine becomes ever more valuable. We probably don’t want to destroy this value. To me, this suggests that Google’s search engine eventually will become a publicly regulated utility – because the politics will demand it. We already see this outside the U.S.
Facebook, the ultimate social network, is going through some ups and downs because of issues of how it collects and uses personal information. My impression is that a single social network for all socializing needs is probably not the ideal solution. If correct, competition will eat into FB, which will start to break up into different targeted functions, reducing its value as a one-stop-fits-all OSN.
We shall see.
How Silicon Valley went from ‘don’t be evil’ to doing evil
March 4, 2018
Meet the new boss. Same as the old boss.
– The Who, “We won’t be fooled again”, 1971
Once seen as the saviors of America’s economy, Silicon Valley is turning into something more of an emerging axis of evil. “Brain-hacking” tech companies such as Apple, Google, Facebook, Microsoft and Amazon, as one prominent tech investor puts it, have become so intrusive as to alarm critics on both right and left.
Firms like Google, which once advertised themselves as committed to being not “evil,” are now increasingly seen as epitomizing Hades’ legions. The tech giants now constitute the world’s five largest companies in market capitalization. Rather than idealistic newcomers, they increasingly reflect the worst of American capitalism — squashing competitors, using indentured servants, attempting to fix wages, depressing incomes, creating ever more social anomie and alienation.
At the same time these firms are fostering what British academic David Lyon has called a “surveillance society” both here and abroad. Companies like Facebook and Google thrive by mining personal data, and their only way to grow, as Wired recently suggested, was, creepily, to “know you better.”
The techie vision of the future is one in which the middle class all but disappears, with those not sufficiently merged with machine intelligence relegated to rent-paying serfs living on “income maintenance.” Theirs is a world in where long-standing local affinities are supplanted by Facebook’s concept of digitally-created “meaningful communities.”
The progressive rebellion
Back during the Obama years, the tech oligarchy was widely admired throughout the progressive circles. Companies like Google gained massive access to the administration’s inner circles, with many top aides eventually entering a “revolving door” for jobs with firms like Google, Facebook, Uber, Lyft and Airbnb.
Although the vast majority of all political contributions from these firms, not surprisingly, go to the Democrats, many progressives — at least not those on their payroll — are expressing alarm about the oligarchs’ move to gain control of whole industries, such as education, finance, groceries, space, print media and entertainment. Left-leaning luminaries like Franklin Foer, former editor of the New Republic, rant against technology firms as a threat to basic liberties and coarsening culture.
Progressives are increasingly calling for ever growing tech monolith to be “broken up,” calling for new regulation to limit their size and scope. Many have embraced European proposals to restrain tech monopolies which now resemble “predatory capitalism” at its worse.
The right also rises
Traditionally, conservatives celebrated entrepreneurial success and opposed governmental intervention in the economy. Yet increasingly even libertarians, like Instapundit’s Glen Reynolds, have suggested that some form of anti-trust action may be necessary to curb oligarchic power. The National Review even recently suggested that these firms be treated as utilities, that is, regulated by government.
Conservatives are also concerned about pervasive political bias in the industry. The Bay Area, the heartland of the industry, has evolved as Facebook co-founder Peter Thiel notes, into a “one party state.” Ideological homogeneity discourages debate and dissent, both inside their companies.
More importantly, conservatives seek to curb their ability — increasingly evident as traditional media declines — to control content on the internet. As the techies expand their domain, America’s media, entertainment and cultural industries would seem destined to become ever less heterogenous in politics and cultural world-view.
A clear and present danger
Whether one sits on the progressive left or the political right, this growing hegemony presents a clear and present danger. It is increasingly clear that the oligarchs have forgotten that Americans are more than a collection of data-bases to be exploited. People, whatever their ideology, generally want to maintain a modicum of privacy, and choose their way of life.
The perfect world of the oligarchs can be seen in the Bay Area, where, despite the massive explosion in employment, even tech workers, due to high costs, do worse than their counterparts elsewhere. Meanwhile San Francisco, among the most unequal places in the country, has evolved into a walking advertisement for a post-modern dystopia, an ultra-expensive city filled with homeless people and streets filled with excrement and needles. It is also increasingly exporting people elsewhere, including many people making high salaries.
Of course, technology is critical to a brighter future, but need not be the province of a handful of companies or concentrated in one or two regions. The great progress in the 1980s and 1990s took place in a highly competitive, and dispersed, environment not one dominated by firms that control 80 or 90 percent of key markets. Not surprisingly, the rise of the oligarchs coincides with a general decline in business startups, including in tech.
We have traveled far from the heroic era of spunky start-ups nurtured in suburban garages. But a future of ever greater robotic dependence — a kind of high-tech feudalism — is not inevitable. Setting aside their many differences, conservatives and progressives need to agree on strategies to limit the oligarch’s stranglehold on our future.
Joel Kotkin is the R.C. Hobbs Presidential Fellow in Urban Futures at Chapman University in Orange and executive director of the Houston-based Center for Opportunity Urbanism (www.opportunityurbanism.org).