Madison v Zuckerberg

Federalist 51 is our best defense against Big Tech’s monopolistic impulses

The tech and media policy Twitterverse was taken over in early May by a New York Times op-ed from Facebook co-founder Chris Hughes arguing that the behemoth he’d helped found at Harvard, and in which he remains a major shareholder, should be broken up by federal authorities. The argument that Facebook is a monopoly has been made before, including by presidential candidate Elizabeth Warren, but the Facebook co-founder’s argument had one essential strength. In knowing Zuckerberg personally and having a personal commercial stake in Facebook, Hughes can insulate himself from claims of demonizing success. He specifically states that Zuckerberg is a sound, moral individual, which may well be true. His argument is thus not made on the basis of claiming nefarious intent, quite the opposite. Hughes argues that no matter the intent of Facebook or its leadership, monopolies are bad for democracy, and monopolies in the information space are even more dangerous for the health of public discourse.

Following Mr. Hughes’s op-ed, Facebook’s VP of Global Affairs and former British Deputy PM Nick Clegg gave the company’s official rebuttal, arguing “you don’t enforce accountability by breaking up a successful American company”. Clegg elaborated his points in an op-ed, also in the New York Times, arguing that the company’s size is not of consequence, and gave a laundry list of steps Facebook is taking to decrease hate speech and increase security on its platforms. He goes on to claim that Facebook cannot be a monopoly because all of its various platforms and products have competitors.

However, Clegg’s statement and op-ed fail to address the main claim of Hughes’s argument: that regardless of how benevolent Facebook’s efforts are, a single private entity should not have unchecked power over the public square. The situation is even less acceptable after adding the fact that this single private entity is majority-owned by one person: Mark Zuckerberg. The idea that a single essentially unaccountable individual can wield limitless control over a public space comprising over two billion individuals is unprecedented and dangerous. What’s even more worrying is that, while Facebook has competitors across certain functionalities, it has no competitor in terms of size, a sort of “natural monopoly” in social media, where consumer utility is limited by where all the other consumers are: no one wants to be on a platform all by themselves.

My argument is not asking the “how”, it’s asking the “should we”. Should we allow for massive concentrations of power in private hands? To further rebut Clegg’s claims, it would be easy to evoke the progressive tradition of trust-busting, from Sherman to Roosevelt, but I’d argue it’s more effective to dig farther back into American history, unearthing perhaps the best-known defense of the principles of the US Constitution: James Madison’s “Federalist 51”.

Madison Against the Machine

In 1790, the Founding Fathers of the American Republic had drafted a constitution and began the difficult process of having it ratified by the States. The United States, a country born of skepticism for centralized authority, was reticent to accept a Federal Constitution that gave power to centralized institutions and created an executive, the President. To sell Americans on the principles of the Constitution, James Madison, Alexander Hamilton, and John Jay began writing a series of anonymous essays to be published in those states most hesitant to form a closer union. These works are now collectively known as the Federalist Papers.

“Federalist 51”, one of the most cited of the Papers, defends the crucial principle of the separation of powers. Madison goes further than the simple separation of branches of government, instead discussing the power of “interests” — what we might call today parties, lobbies, or activist groups:

Different interests necessarily exist in different classes of citizens. If a majority be united by a common interest, the rights of the minority will be insecure.

Madison defends the Constitution as a system that pits interests against each other so that no single one can dominate. The concept draws significantly on Adam Smith, the intellectual father of capitalist liberalism, who argued that competitive market pressures would ensure that no single set of interests could dominate society.

“This policy of supplying, by opposite and rival interests, the defect of better motives, might be traced through the whole system of human affairs, private as well as public.”

He describes how a fractured and oppositional political landscape at the federal level can actually protect the rights and views of political and religious minorities better than at a local or state level, because a federal political arena necessarily includes a greater number of players and factions.

“It consists in the multiplicity of interests… and of sects. The degree of security in both cases will depend on the number of interests and sects; and this may be presumed to depend on the extent of country and number of people comprehended under the same government.”

This segment on religion can be extrapolated to today’s tech market. The health of the market and ecosystem will depend on the “multiplicity of interests”. The more players in the game, the lower the barriers to entry. When a few actors annex a significant portion of market share, barriers to entry are more difficult to surmount. This trend is amplified as giants like Facebook and Amazon expand into more and more sectors, pushing out or taking over smaller competitors.

We see this play out today in the slump in startup creation. Particularly in areas where big tech dominates — the Bay Area, Seattle — startup creation is stymied by the size of the GAFAM. In Europe, a narrative has begun to emerge which attributes Europe’s relative lack of unicorns — Europe has 31 to the US’s 99 and China’s 128 — to American Big Tech’s tendency to buy out potential competitors. Today, being bought by Facebook or Microsoft or Google has in fact become the initial objective of many new startups . Many startups also emerge not as alternatives to Big Tech platforms and services, but as accessories, such as HostFly, a Paris-based AirBnb management service, or the litany of companies that build apps and features for the Microsoft Office suite.

So What?

In the end, Clegg’s arguments about Facebook’s measures to combat bad behaviour on its platforms doesn’t really speak to the heart of the issue. The true question isn’t “does Facebook have competitors?”, rather “should Facebook be able to compete simultaneously across all these products?” If we follow Madison’s reasoning, the answer is no. A single “interest” holding too much power in the public sphere is actively bad for the Republic. No matter how many regulatory controls are place on this entity, and no matter how benevolent the intentions of its leader are, concentrations of power are, by the logic of the Founding Fathers, bad in all cases. Only through a distribution of power and influence into opposing interests can liberty be insured.

Jackson Webster is a cybersecurity consultant and a tech policy wonk based in Paris, France.