I did indeed write in the wake of January 6, and the lengthy op–ed appears in Lucire, quoting Emily Ratajkowski, Glenn Greenwald and Edward Snowden. I didn’t take any pleasure in what happened Stateside and Ratajkowski actually inspired the post after a Twitter contact of mine quoted her. This was after President Donald Trump was taken off Facebook, Twitter, and YouTube.
The points I make there are probably familiar to any of you, my blog readers, pointing at the dangers of tech monopolies, the double standards that they’ve employed, and the likely scenario of how the pendulum could swing the other way on a whim because another group is flavour of the month. We’ve seen how the US has swung one way and the other depending on the prevailing winds, and Facebook’s and Twitter’s positions, not to mention Amazon’s and Google’s, seem reactionary and insincere when they have had their terms and conditions in place for some time.
Today, I was interested to see Chancellor Dr Angela Merkel, referred to by not a few as the leader of the free world, concerned at the developments, as was President López Obrador of México. ‘German Chancellor Angela Merkel objected to the decisions, saying on Monday that lawmakers should set the rules governing free speech and not private technology companies,’ reported Bloomberg, adding, ‘Europe is increasingly pushing back against the growing influence of big technology companies. The EU is currently in the process of setting up regulation that could give the bloc power to split up platforms if they don’t comply with rules.’
The former quotation wasn’t precisely my point but the latter is certainly linked. These tech giants are the creation of the US, by both Democratic and Republican lawmakers, and their institutions, every bit as Trump was a creation of the US media, from Fox to MSNBC.
They are natural outcomes of where things wind up when monopoly power is allowed to gather and laws against it are circumvented or unenforced; and what happens when news networks sell spectacle over substance in order to hold your attention. One can only hope these are corrected for the sake of all, not just one side of the political spectrum, since freedom—actual freedom—depends on them, at least until we gain the civility and education to regulate ourselves, the Confucian ideal. Everything about this situation suggests we are nowhere near being capable, and I wonder if homo sapiens will get there or whether we’ll need to evolve into another species before we do.
Martin Wolf, writing in the Financial Times, touches on a few points that resonate with my readings over the years.
He believes capitalism, as a system, is not a bad one, but it is bad when it is ‘rigged’; and that Aristotle was indeed right (as history has since proved) that a sizeable middle class is necessary for the functioning of a democracy.
We know that the US, for instance, doesn’t really do much about monopolies, having redefined them since the 1980s as essentially OK if no one gets charged more. Hence, Wolf, citing Prof Thomas Philippon’s The Great Reversal, notes that the spikes in M&A activity in the US has weakened competition. I should note that this isn’t the province of “the right”—Philippon also shows that M&A activity reduced under Nixon.
I alluded to the lack of competition driving down innovation, but Wolf adds that it has driven up prices (so much for the US’s stance, since people are being charged more), and resulted in lower investment and lower productivity growth.
In line with some of my recent posts, Wolf says, ‘In the past decade, Amazon, Apple, Facebook, Google, and Microsoft combined have made over 400 acquisitions globally. Dominant companies should not be given a free hand to buy potential rivals. Such market and political power is unacceptable. A refurbishment of competition policy should start from the assumption that mergers and acquisitions need to be properly justified.’
History shows us that Big Tech’s acquisitions have not been healthy to consumers, especially on the privacy front; they colluded to suppress wages before getting busted. In a serious case, according to one company, Google itself commits outright intellectual property theft: ‘Google would solicit a party to share with it highly confidential trade secrets under a non-disclosure agreement, conduct negotiations with the party, then terminate negotiations with the party professing a lack of interest in the party’s technology, followed by the unlawful use of the party’s trade secrets in its business.’ (The case, Attia v. Google, is ongoing, I believe.) Their own Federal Trade Commission said Google ‘used anticompetitive tactics and abused its monopoly power in ways that harmed Internet users and rivals,’ quoting the Murdoch Press. We see many undesirable patterns with other firms there exercising monopoly powers, some of which I’ve detailed on this blog, and so far, only Europe has had the cohones to slap Google with massive fines (in the milliards, since 2017), though other jurisdictions have begun to investigate.
As New Zealand seeks to reexamine its Commerce Act, we need to ensure that we don’t merely parrot the US and UK approach.
Wolf also notes that inequality ‘undermines social mobility; weakens aggregate demand and slows economic growth.’ The central point I’ve made before on Twitter: why would I want people to do poorly when those same people are potentially my customers? It seems to be good capitalism to ensure there’s a healthy base of consumers.
Quite simple, isn’t it? I sense my parents’ generation (who were kids during WWII) would have understood this, but I worry about my generation and the ones following.
