Big Tech and the newest new left

Published in

Thomas Day

6 min readNov 15, 2020

Perhaps I shouldn’t have been, but I was a bit flummoxed by the results of California’s Proposition 22, exempting ride hailing and delivery companies like Uber, Lyft, and DoorDash from state labor laws that require employers to pay for healthcare and unemployment insurance. If the measure were defeated, the gig economy companies would be required to compensate their drivers as employees and not contractors.

The measure passed easily. In a state that went nearly 2-to-1 for President-elect Joe Biden, I thought the referendum was something of a lay-up. But other folks define progressive differently.

I tip my cap to the Big Tech companies. In spite of the rise of populism, the progressive brands they have built remain in force even as a few climbed to valuations of more than $1 trillion. In shedding staid workplaces in favor of hermitages of twentysomethings, and creating a mythology around the “hacker” and “techie,” Big Tech has coopted partisans who may otherwise take arms against them.

They have scripted incredibly alluring and misleading phrases like “information wants to be free” and “move fast and break things” to tip the balance of market power in their favor, junk privacy and copyright laws, and cast opponents as troglodytes. And in doing so, even in a progressive state like California, they continue to maintain dominant market positions with little in the way of competition and regulations.

Perhaps they have learned from their predecessors.

On the eve of Big Tech’s takeover of the international economy, the public’s view of oppressive market power was typically associated with Big Oil and Wal Mart.

Run your finger down the list of Fortune 500 companies in 2005 and you’ll find names at the top like Wal Mart, Exxon Mobil, Chevron, and ConocoPhillips — all symbols of George W. Bush and Dick Cheney’s America.

A look back marks 2005 as a turning point. In 2005, Microsoft was still picking itself up from its battle with the U.S. Department of Justice, the iPhone was two years from its debut, Google had just IPO’d, Facebook was still making its way through college dormitories, and Amazon launched Amazon Prime and was largely seen as just an online bookstore.

We know what happened next, but do not divorce the rise of these five firms from the Millennial ethos that took Barack Obama to the presidency. Generational change happened in the public and private sectors in the late 2000s. Both Obama and the Big Tech firms represented a certain counterculture that took hold over American life in the early 2010s.

The legacy of Robert Bork

Matt Stoller, a fellow at the Open Markets Institute, explains a dramatic shift in American economic thought in his book, “Goliath: The 100-Year War Between Monopoly Power and Democracy.” In his telling, the shift can be traced back to the career of economist John Kenneth Galbraith, a man largely responsible for convincing the Democratic Party to drop its focus ensuring market competition in favor of an embrace of corporate consolidation.

Galbraith educated the post-World War II generation of economists by presenting large corporations as vanguards of modernity, casting struggles between capital and labor as a thing of the past, and urging followers to instead focus their energies on social and geopolitical concerns. Galbraith became a voice against the Vietnam War and a voice against antitrust enforcement, and saw no ideological contradiction.

This anti-antitrust viewpoint took hold across the isle, of course. And it was championed by Robert Bork, a man whose last name is now a verb in the Merriam Webster dictionary, meaning “to attack or defeat (a nominee or candidate for public office) unfairly through an organized campaign of harsh public criticism or vilification.” The term refers his unsuccessful 1987 nomination to the U.S. Supreme Court, a defeat led by then Sen. Joe Biden.

Perhaps “Bork” should have another definition: To allow monopolies to squash competition so as long as they don’t increase prices.

Bork, through his influential 1978 book, “The Antitrust Paradox,” redefined American posture toward monopolies by arguing that firms should be permitted to maintain market dominance so as long as they resist the temptation to increase prices — even if they are suppressing prices to stifle competition.

In Bork’s view, markets are efficient if prices are low. If prices are low, there is no need to fight market concentration.

This view of market has guided American jurisprudence across administrations of both parties. It allowed Amazon to reduce the prices of diapers by as much as 30 percent, incurring losses that would otherwise be senseless but permitted Amazon to squeeze profits of Diapers.com, which it wanted to acquire (and did in 2010, then shut down seven years later).

It took nearly four decades after Bork’s book for a counter argument to emerge, and came in 2017 from Lina Khan, then a Yale Law student, now the chairperson of the Federal Trade Commission (at the age of 32). Writing in the Yale Law Journal, Khan’s “Amazon’s Antitrust Paradox” framed the relationship between prices and monopoly power differently. Amazon, Khan argued, was using predatory pricing to forgo profits — something they could do because of their market dominance — to choke off competition.

Khan’s view of the market could mark a pivot point for progressives. If so, it would dismiss several generations of a “bigger is better” ideology that has guided both American political parties for generations.

When the world changes…

If you needed confirmation that social and political movements impact business, you got it in August when Exxon Mobile was booted from the Dow Jones Industrial Average. In October, the stock price of the Florida-based NextEra Energy, a solar and wind energy company, passed that of Exxon Mobile. In 2020 alone Exxon Mobile has lost more than $2.4 billion.

Big Oil is dying at least in part because progressive forces recognized the threat of climate change and targeted its source.

Will these same forces recognize the destruction of the middle class, individual privacy, and the breakdown of civil debate and target Big Tech? Will Joe Biden marshal these forces?

William Barr’s Justice Department, whatever their true intent, has pursued antitrust action against Google. Will the Biden Administration’s Justice Department continue that pursuit?

There’s every reason be skeptical of the new administration’s zeal for enforcing the Sherman Antitrust Act, the Clayton Act, and every other U.S. law that has seemingly been forgotten. Big Tech built their empires during the Obama Administration, and it should be no surprise that alumni at the most senior levels have found employment with Big Tech firms.

No doubt they reconcile their new careers in progressive circles by pointing to Big Tech’s corporate social responsibility efforts. Mark Zuckerberg and his family have launched the Chan Zuckerberg Initiative to support basic research, equal education, and equal access to healthcare. Google claims it is now carbon neutral. Jeff Bezos is pledging $10 billion to fight climate change.

But how on earth did one man amass so much wealth that writing away $10 billion is not too much of a burden?

-TD

— — —

Supplementary reads

On the Tech Cold War:

“What Will Drive China to War?” by Michael Beckley and Hal Brands (The Atlantic).

“What really brought down LinkedIn’s China play,” by David Wertime (Protocol).

“Maybe losing the AI race to China isn’t such a bad idea,” by Adam Clark Estes (Recode).

“The Tech Cold War’s ‘Most Complicated Machine’ That’s Out of China’s Reach,” by Don Clark (New York Times).

On antitrust policy:

“The Real Dish on the T-Mobile/Sprint Merger: A Disastrous Deal From the Start” by Melody Wang and Fiona Scott Morton (ProMarket).

“The House’s Recent Spate of Antitrust Bills Would Change Big Tech as We Know It” by Randy Picker (ProMarket).