The message here is that China is about to best the United States, and the only way for America to stay on top is to let the big stay big, and allow Silicon Valley to make the decisions about how to move forward in the digital economy. It’s a position that tech titans have argued in the offices of powerful members of Congress, on the speaking circuit, at dinner parties, and in all the places where they exert their influence. It’s a line that Google is pushing via academics who write and speak on the topic, and via the think tanks that it funds.
Witness the transformation by the influential Information Technology and Innovation Foundation president, Rob Atkinson, who once championed small and mid-sized firms. Now, he’s written a book, along with Michael Lind, entitled Big Is Beautiful: Debunking the Myth of Small Business.25 While it’s true that ITIF has taken some positions on different issues that go against the Google line, it’s telling that the book seems directed toward debunking the “new Brandeis” theory of antitrust put forward by Tim Wu and Barry Lynn, who was kicked out of his position at the New America Foundation after publicly lauding the European Union’s antitrust case against Google.
It’s true that the Chinese are making rapid strides in intellectual property, innovation, and economic competitiveness. And yet, the war for the technologies of the future is by no means won. China has been stacking the international telecom-standards bodies with their own representatives over the past few years, and they have a head start on 5G network construction. But that may or may not equate to a lasting technological advantage. China was late to adopt 3G, but that did not stop their progress in 4G, for example. There is no reason to think that the United States, or even Europe, cannot catch up in 5G. The Chinese government does have the advantage of being able to direct state-owned operators to build infrastructure, and its companies don’t have to purchase spectrum before offering 5G services. Yet the first country to have an operational 5G network will not be China, but South Korea.
It’s important which countries build their networks first, but it’s not the only factor in success. The real advantages of 5G are going to come from the way in which individual companies and industries exploit the potential gains from 5G—and it’s difficult to know where they will come from just yet. “Just as no one predicted that one of the major uses of 4G would be a new way of calling taxis, the most important uses for 5G technology are also difficult to predict before [they are] actually available,” says Dan Wang, an analyst for Gavekal Dragonomics.
Go back even further, and consider how the industrial revolution developed: The big things came first, like electricity and the combustion engine. But they were followed by spates of innovative products and services, ranging from automobiles and domestic appliances to wind turbines. There is no reason to think this time will be different—or that China, the United States, and Europe can’t all have a piece of the pie. The battle for 5G isn’t set—and it doesn’t have to be a zero-sum game.
In the United States, though, shared prosperity will be obtainable only if the government moves quickly to create a more supportive environment for real innovators (coordinating with other countries on 5G standards, for example), and if Big Tech doesn’t monopolize the next generation of innovation. We should dismiss the cynical “Better us than China” argument about why Big Tech shouldn’t be the subject of greater regulation.
Thinking of Facebook and Google, both of which do business in China, as any kind of counterweight to Chinese tech nationalism is completely nonsensical. These companies may know how to monetize U.S.-government-sponsored innovations like the Internet, but they are profit-making companies, not national champions. In fact, in the past, they have frequently argued that they have no responsibility to be the latter—in a free market country like the United States, they can offshore as much cash as they want, and invest where they like. Indeed, the U.S. tech lobby frequently bashes European policy makers for nationalism and preferential treatment for their own tech companies. To use the “It’s us against China” argument to prevent further scrutiny or regulation, particularly given the extent to which these technologies are now being used to undermine liberal democracy not just in the United States but elsewhere, goes beyond the hypocritical to the completely cynical.
Building a Better System
Monopoly power, more than China itself, threatens the most important advantage that America has in the race for the high-growth industries of the future: a fair and open market system. In the United States these days, it is not only small firms that are being squashed, but medium-sized and even large players, too. The country cannot compete with China on top-down approaches to competitiveness. Nor should it. But it could reassert the merits of a more decentralized system by curbing the companies that threaten it.
Doing so will require more than just regulatory and political willpower. It will require a fundamental rethink about how the market system works, both at home and abroad. The government is right to want to look out for national security interests and to have a hand in how strategically important sectors are managed. I agree with defense hawks who believe the United States should rely less on Chinese equipment and rebuild its own industrial infrastructure. But grandstanding and China bashing for political effect, as we’ve seen President Trump do over the past few years, is not the way to Make America Great Again; fueling the homegrown innovation ecosystem is.
The U.S. government has a terrific record in terms of funding blue-sky research that results in huge economic value for the private sector—touchscreen technology, GPS, and the Internet itself came out of the Pentagon. We should be bolstering rather than cutting funding for such core research, and perhaps even allowing the public sector to take a greater cut of the profits if the research is commercialized, as Nordic countries and Israel do. That would help offset the popular criticism that results when companies such as Apple, Google, and Qualcomm, after benefiting greatly from publicly funded basic research, end up stashing much of their profits offshore.
We should also think deeply about the existential challenge posed by the Chinese state system—not to copy it, but to address the problems that it has illuminated within our own system. The cracks within the neoliberal framework can no longer be plastered over. It’s good and right that myriad Democratic candidates for 2020 are thinking through various ways to bring economic globalization and multinational business practices down to earth, and put corporations more in service to citizens and society, rather than allowing them to operate on such a selfish, short-term basis. If capitalism is going to be sustainable, people have to believe it’s working for them. (Today, only a minority of millennials, the largest voting group, profess to believe in capitalism.)26 If there’s any lesson to take from China’s system, it’s that winning in the future will require a long-term focus. In the United States, the answer isn’t to shift toward socialist-style state planning by creating national champions, but rather to enrich the innovation ecosystem as a whole, and to reshape the market system to focus more on stakeholder rather than merely shareholder well-being—as a number of Democratic candidates, including Elizabeth Warren, have proposed.
Meanwhile, rather than swallowing the claim that Big Tech companies are somehow national champions, we should take a closer look at our own digital ecosystem. Large U.S. incumbents are crushing innovation. Educational reform is desperately needed to train workers for jobs in which they will not be displaced by robots. America’s largest and richest companies are keeping the vast majority of their cash abroad, where it can’t help fund the very things that the industry claims it needs from the public sector. We can best bolster growth not by protecting U.S. companies from overseas buyers, but by addressing these concerns and creating a fairer marketplace.
CHAPTER 14
How to Not Be Evil
If there is a commodity more valuable than data, it must be time. I dream of being able to wake thirty minutes late, or linger over newspapers (yes, the print
kind) and coffee for hours without considering a mental to-do list, to look at my email at the end of the day and see nothing there left to attend to, or to have several years—rather than twelve months—to write a book like the one you’ve just read. Sadly, in our fast-twitch, high-speed, always-on digital world, slowing down is the hardest thing to do.
But if there was ever a moment to take a breath and pause, it’s now, as we begin to understand and grapple with the rise of Big Tech, and all the many things—good and bad—that it has wrought. The problem is urgent. But that doesn’t mean we should be reactive. Indeed, the enormity of the changes facing us, and what’s at stake if we get it wrong, argues for taking the time to contemplate our next moves as a society in a thoughtful way. After all, quickly conceived, insufficiently informed wisdom is a terrible side effect of the Big Tech era. All too often, we come up with some firmly held position after a few glances at our Facebook page or Twitter feed—a position based more on feeling than on fact.
I worry, too, that we may find ourselves in the sort of regulatory paradigm we saw in the financial sector post-2008. Back then, lobbyists and vested interests on both sides of the political aisle came up with a complex stew of new laws. Some were good, some bad. The sheer complexity created plenty of loopholes for corporate lawyers to jump through. While risk-taking was curbed at some individual institutions, the system as a whole was made no safer. In the haze of complex, technocratic debate, we lost sight of the only question that mattered: How can we create a financial sector that serves the real economy?
We need to ask that question now about the new technologies that are proliferating all around us. The structural shift from a tangible to an intangible economy—one that makes the industrial revolution look relatively minor by comparison—should trigger deep thinking about a host of big topics: digital property rights, trade regulations, privacy laws, antitrust rules, liability rules, free speech, the legality of surveillance, the implications of data for economic competitiveness and national security, the impact of the algorithmic disruption of work on labor markets, the ethics of artificial intelligence, and the health and well-being of users of digital technology.
Even taken individually, these are deep and complex issues. But they need to be taken together, because each one impacts the others. This challenge is one that requires policy makers to have robust conversations with experts from a broad range of disciplines about what the new framework for economic growth, political stability, personal liberty, and health and safety in our complex new digital world should be. In the wake of 2008, policy makers trying to fix the financial system were captured by Wall Street itself—the vast majority of the consultations taken on the most contentious post–financial crisis rules were taken with the very people who were being regulated.1 It wasn’t a good look, and it had major political ramifications in the sense that Americans were left feeling that the system was rigged. We need to make sure to not make those mistakes again. As we think about how to harness the power of technology for the public good, rather than the enrichment of a few companies, we must make sure that the leaders of those companies aren’t the only ones to have a say in what the rules are.
One step in this process might be to create a national commission on the future of data and digital technology, ideally a bipartisan and independent one, which would lay out all of the issues at stake in a report to Congress. It’s true that “blue ribbon” commissions often come in for political criticism—they are too big, too vague, and too slow moving, or so the critique goes. As a former boss of mine once told me, “Nothing ever gets done in a super committee.” That’s fair. But given the complexity and importance and interconnectivity of the issues at stake, I think a national commission set up not to make rules, but simply to lay out the issues, is a necessary first step. I’m often struck, when in Washington discussing these topics with policy makers, how even the most well-meaning and thoughtful of them tend to focus on only one or two issues involving Big Tech, rather than considering the whole picture. And the companies, of course, would more often than not like to keep it that way, to the extent that a more limited viewpoint on the part of politicians often benefits them.
That’s another key reason for a national committee—it would give citizens a sense that these issues are being debated by a democratically elected body, rather than a bunch of power brokers in a private room somewhere. Such a body would have a finite timeline for producing a clear and concise report, in plain English, which could then be disseminated for public debate. It’s hard for me to imagine how policy makers, let alone the public, could begin to understand all the implications of the digital age without such a road map to start the discussion.
Such a commission would not only lay out the issues, but also consider them in the context of four stakeholder groups: citizens, workers, consumers, and businesses. Then, there should be a vigorous national debate about how to move forward with creating a framework for our next phase of economic, political, and social development. This is, of course, a process that could and should be conducted in any number of countries. How can we make sure that the digital age is one that enhances well-being, creates sustainable growth, and supports rather than erodes our system of liberal democracy? These are the big questions, and we should ask and answer them well.
In the interest of that, rather than presenting a series of pat solutions to complex issues that will have multi-generational impacts, I will spend this chapter putting forward some categories of concern that I believe deserve careful consideration, as well as my own ideas about how we might begin to think about them.
Creating Boundaries for Big Tech
It’s important to remember that the rules for capitalism in general are not handed down on stone tablets—we make them, and we can remake them. I believe that both liberal democracy and personal freedom and security are at risk unless we set some boundaries around Big Tech. Below are some thoughts about what the parameters of digital regulation might look like.
For starters, it’s worth remembering what we have long known but seem to have forgotten: Industry self-regulation rarely works. From turn-of-the-century railroads, through energy markets in the 1990s, to the financial industry circa 2007, there are many examples that bear this out. The tech industry is only the latest. The contrition and apologies of the Big Tech executives who have sat in front of Congress any number of times since 2016 haven’t added up to any significant shift, either in business model or philosophy. Rather, their vague promises to “do better,” and spurious claims that they simply can’t police activity on their own platforms, just underscore the need for a cohesive regulatory framework around private companies that have amassed too much power.
Smart regulation is, it must be said, very tough to craft. Finance is, again, the perfect example of this: The complexity and global fragmentation of the post-2008 regulatory landscape introduced its own risks into the system, which was one reason it was possible for the Trump administration to justify tearing some of that regulation apart. But that’s not a reason to not engage in the process. If there’s one thing that’s been shown in recent years to be worse than imperfect regulation, it’s no regulation. So how do we create a framework for government oversight of Big Tech that protects consumer and societal interests, curbs growth-suppressing monopoly power, and allows us to keep the digital conveniences we depend on?
One way would be to reconsider the legal exemptions that Big Tech enjoys from responsibility for what happens on its platforms. It’s a topic that was brought into sharp focus by New Zealand’s prime minister, Jacinda Ardern, in the wake of the March 2019 massacre of fifty worshippers in two mosques in Christchurch, New Zealand, which was live streamed in a seventeen-minute video. That video was then uploaded 1.5 million times within twenty-four hours on Facebook and uploaded on YouTube at the rate of one video per second.2 As she put it in a powerful speech following the episode, “We cannot simply sit back and accept tha
t these platforms just exist and that what is said on them is not the responsibility of the place where they are published. They are the publisher, not just the postman. It cannot be a case of all profit, no responsibility.”3
The Communications Decency Act section 230 exceptions that allow platforms to get away with the dissemination of hate and violence in a way that no other type of media can are ripe for review. Rethinking them will be tricky: There is a risk that platforms will be overzealous in the policing of hate speech if they are on the hook for it legally, and that could in turn have a chilling effect on free speech in general. But it’s clear that the status quo isn’t working. Countries such as Germany have passed laws requiring platforms to delete illegal content within twenty-four hours or face large fines. Others, like Australia, are considering similar legislation. While the First Amendment would make any similar law in the United States far narrower, and trade-offs between under- and overregulation of content remain, the fact is that it’s time for platforms to admit that they aren’t the town square, but advertising businesses that monetize content, just like any other type of media business. It’s clearly unfair—not to mention dangerous—for them to act otherwise.
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