America's major tech companies like to present themselves as cool and countercultural institutions. Their employees and executives wear jeans to work, hold "hackathons" to solve problems and speak in soaring language of how their "disruptive innovations" will positively transform the world. How could these companies not be a force for good?
Jonathan Taplin's excellent new book explains exactly how Google, Facebook and Amazon are undermining democratic institutions, accelerating the rise of oligarchy in America, and destroying both cultural and economic opportunities for millions of people. The book's title is "Move Fast and Break Things," a slogan popular in Silicon Valley that has gradually gained a set of connotations far less flattering than tech oligarchs might realize. As Taplin writes, "a culture and its art are not like an old flip phone — to be thrown in the trash as soon as it has been 'disrupted' by the Next Big Thing."
Many elements of Taplin's case are familiar. Newspaper ad reenue has declined by roughly $40 billion between 2000 and 2014, recorded music revenue has dropped $10 billion in the same period, and over 5,000 independent book and record stores have closed in the last two decades. Facebook's covert experiments in manipulating the emotions of hundreds of thousands of users, Amazon's atrocious treatment of workers at its distribution centers and Google's cavalier disregard for copyright laws are also well-documented.
Taplin, director emeritus of the University of Southern California Annenberg Innovation Lab, argues that the major tech companies are fundamentally monopolistic and parasitic — they exploit positions of market dominance to ignore legal regulations, extract inflated prices from advertisers and rely on content produced by others, often without their consent or knowledge. But his explanation of how these practices arose starts much earlier. Thomas Jefferson wanted a "restriction against monopolies" added to the Bill of Rights, alongside freedom of religion, freedom of the press and protection against standing armies. Alexander Hamilton, founder of the Bank of New York, disagreed and ultimately prevailed.
Though wealthy banking interests prevented the adoption of a clause against monopolies in the Bill of Rights, the Sherman Antitrust Act of 1890 allowed President Theodore Roosevelt to break up John D. Rockefeller's Standard Oil Trust. Taplin quotes Roosevelt, whose words still resonate: "the prime need is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise."
"Move Fast and Break Things," by Jonathan Taplin, Little, Brown and Co., 320 pages, $29. (Little, Brown and Co.)
Taplin explores how the influential legal theorist and rejected Supreme Court nominee Robert Bork helped shift public and regulatory opinion in the second half of the 20th century. By claiming that the only question regulators should ask is whether monopolies affect consumer welfare, Bork essentially proposed that as long as prices fall, increasing concentrations of corporate power do not matter. Even if Wal-Mart were the only store in America, this would be a problem only if consumer prices rose.
Of course, this myopic thinking ignores the fact that there might be no consumers to shop at Wal-Mart if it were allowed to obliterate every other retail business in the country. Because Wal-Mart would then be the only purchaser of many goods from wholesalers, it could extract ruinous prices. This is precisely the position of Amazon vis-a-vis book publishers. Because Amazon can deny publishers access to its enormous customer base, it can force them to accept artificially deflated prices. Google and Facebook can do something similar with advertisers by threatening to deny them access to billions of users. Taplin cites the Herfindahl-Hirschman Index, a widely used measure of market concentration in antitrust law that allows regulators to determine whether markets are becoming monopolistic. A score of 2,500 is considered highly concentrated. The HHI for internet search markets is 7,402.
The sort of free-market libertarianism that scorns all government regulation is particularly ironic given the origins of the internet. Taplin recounts early research funded by the U.S. Department of Defense that explicitly structured the internet in a decentralized architecture so it could survive a nuclear attack. Not only does the absurdly concentrated power of a few companies contradict this vision, the internet itself might not exist if the anti-government visions of many tech oligarchs had been a reality in the 1960s.
Jonathan Taplin’s latest book explains how Google, Facebook and Amazon are undermining democratic institutions, accelerating the rise of oligarchy in America, and destroying both cultural and economic opportunities for millions of people. (Little, Brown and Co.)
Taplin makes a forceful and persuasive case that companies like Google and Facebook could employ their powerful artificial intelligence programs to prevent the infringement of existing copyright laws. They've demonstrated their capacity to stop pornography and illegal drug markets from surfacing on search results. It would not be difficult for them to enforce copyright infringements more effectively and share some of their enormous profits with the industries they are decimating.
The 2016 presidential election was a dramatic demonstration of the unintended consequences of gutting the once-influential field of journalism. But Taplin believes that his case has implications far beyond the creative industries.
"We need to understand that every one of us will stand in the shoes of the artist before long. Musicians and authors were at the barricades first because their industries were the first to be digitized. ... (S)oon the technologists will be coming for your job, too, just as they will continue to come for more of your personal data," he writes. This is not a prophecy but a warning — without changes to legislation, corporate behavior and consumer values, the oligarchic dreams of a few billionaires could reshape the country even more than they already have.
Jonathan Taplin's excellent new book explains exactly how Google, Facebook and Amazon are undermining democratic institutions, accelerating the rise of oligarchy in America, and destroying both cultural and economic opportunities for millions of people. The book's title is "Move Fast and Break Things," a slogan popular in Silicon Valley that has gradually gained a set of connotations far less flattering than tech oligarchs might realize. As Taplin writes, "a culture and its art are not like an old flip phone — to be thrown in the trash as soon as it has been 'disrupted' by the Next Big Thing."
Many elements of Taplin's case are familiar. Newspaper ad reenue has declined by roughly $40 billion between 2000 and 2014, recorded music revenue has dropped $10 billion in the same period, and over 5,000 independent book and record stores have closed in the last two decades. Facebook's covert experiments in manipulating the emotions of hundreds of thousands of users, Amazon's atrocious treatment of workers at its distribution centers and Google's cavalier disregard for copyright laws are also well-documented.
Taplin, director emeritus of the University of Southern California Annenberg Innovation Lab, argues that the major tech companies are fundamentally monopolistic and parasitic — they exploit positions of market dominance to ignore legal regulations, extract inflated prices from advertisers and rely on content produced by others, often without their consent or knowledge. But his explanation of how these practices arose starts much earlier. Thomas Jefferson wanted a "restriction against monopolies" added to the Bill of Rights, alongside freedom of religion, freedom of the press and protection against standing armies. Alexander Hamilton, founder of the Bank of New York, disagreed and ultimately prevailed.
Though wealthy banking interests prevented the adoption of a clause against monopolies in the Bill of Rights, the Sherman Antitrust Act of 1890 allowed President Theodore Roosevelt to break up John D. Rockefeller's Standard Oil Trust. Taplin quotes Roosevelt, whose words still resonate: "the prime need is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise."
"Move Fast and Break Things," by Jonathan Taplin, Little, Brown and Co., 320 pages, $29. (Little, Brown and Co.)
Taplin explores how the influential legal theorist and rejected Supreme Court nominee Robert Bork helped shift public and regulatory opinion in the second half of the 20th century. By claiming that the only question regulators should ask is whether monopolies affect consumer welfare, Bork essentially proposed that as long as prices fall, increasing concentrations of corporate power do not matter. Even if Wal-Mart were the only store in America, this would be a problem only if consumer prices rose.
Of course, this myopic thinking ignores the fact that there might be no consumers to shop at Wal-Mart if it were allowed to obliterate every other retail business in the country. Because Wal-Mart would then be the only purchaser of many goods from wholesalers, it could extract ruinous prices. This is precisely the position of Amazon vis-a-vis book publishers. Because Amazon can deny publishers access to its enormous customer base, it can force them to accept artificially deflated prices. Google and Facebook can do something similar with advertisers by threatening to deny them access to billions of users. Taplin cites the Herfindahl-Hirschman Index, a widely used measure of market concentration in antitrust law that allows regulators to determine whether markets are becoming monopolistic. A score of 2,500 is considered highly concentrated. The HHI for internet search markets is 7,402.
The sort of free-market libertarianism that scorns all government regulation is particularly ironic given the origins of the internet. Taplin recounts early research funded by the U.S. Department of Defense that explicitly structured the internet in a decentralized architecture so it could survive a nuclear attack. Not only does the absurdly concentrated power of a few companies contradict this vision, the internet itself might not exist if the anti-government visions of many tech oligarchs had been a reality in the 1960s.
Jonathan Taplin’s latest book explains how Google, Facebook and Amazon are undermining democratic institutions, accelerating the rise of oligarchy in America, and destroying both cultural and economic opportunities for millions of people. (Little, Brown and Co.)
Taplin makes a forceful and persuasive case that companies like Google and Facebook could employ their powerful artificial intelligence programs to prevent the infringement of existing copyright laws. They've demonstrated their capacity to stop pornography and illegal drug markets from surfacing on search results. It would not be difficult for them to enforce copyright infringements more effectively and share some of their enormous profits with the industries they are decimating.
The 2016 presidential election was a dramatic demonstration of the unintended consequences of gutting the once-influential field of journalism. But Taplin believes that his case has implications far beyond the creative industries.
"We need to understand that every one of us will stand in the shoes of the artist before long. Musicians and authors were at the barricades first because their industries were the first to be digitized. ... (S)oon the technologists will be coming for your job, too, just as they will continue to come for more of your personal data," he writes. This is not a prophecy but a warning — without changes to legislation, corporate behavior and consumer values, the oligarchic dreams of a few billionaires could reshape the country even more than they already have.
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