Back in the early 1990s it was assumed by some of the deep in thought that the dissolution of the Soviet Union signaled the “end of history” of sorts. Supposedly small l liberal democracy of the western kind was an endpoint in the historical evolution of government. It never made sense.
And it didn’t precisely because human nature wasn’t going to disappear with the happy vanishing of the U.S.S.R. and other Iron Curtain countries. Ambitious people make things happen, though not always for the good. Some channel their ambition through the force that is government, which means we’ll likely never reach the final frontier in a governance sense. For good and bad.
That governance continues to evolve is maybe a good way to quiet the nervous minds of a policy elite increasingly of the view that “Big Tech” must be reined in. Lefties at the New York Times like Kara Swisher want government to restrict the power of Amazon, Facebook, Apple, Google et al, but so do Hoover Institution conservatives like Victor Davis Hanson. Both miss the boat, as do countless others who are convinced that the previously mentioned technology companies possess market power without endpoint.
More realistically, what those with little commercial knowledge deem “market power” is nothing of the sort. In truth, it’s the picture definition of ephemeral.
The reason Swisher, Hanson and numerous other serious thinkers on the left and right can’t see that “ephemeral” should always precede “market power” is because the chattering classes can’t see beyond the known. Which means they’re human first and foremost, but it also means what they’re captive to is also causing them to put pen to paper in ways that they’ll regret over time. Stating what should be obvious, today’s “Big Tech” won’t be tomorrow’s. Bank on it. We haven’t reached the “end of technology” despite what the pundit class wants you to believe.
Add Duke law professor Barak Richman and Freeman Spogli Institute (Stanford) senior fellow Francis Fukuyama (yes, the “end of history” individual) to the list of deep thinkers eager to neuter the commercial present. In a Wall Street Journal essay from last weekend, Richman and Fukuyama argued that the “real harm” coming from today’s technology giants is their “ability to amplify certain voices while excluding others.” Their answer is the creation of “middleware” that would return power to users of social media. According to Richman and Fukuyama, the middleware “would give users greater control over the information they see.” Basically they could de-amplify certain voices while excluding others, and the implied genius of this idea is that it would limit the reach of “Big Tech,” and its ability to (in the words of the professors) “potentially sway elections and shape policy outcomes.” Sigh…..These pronouncements won’t age well.
They won’t precisely because markets are free. Trite as the latter may sound to some, unfettered markets always ensure that today’s team picture of dominant will little resemble tomorrow’s.
So what’s the source of the change? In a free market, the valuations of the dominant soar. The latter explains why the best way to ensure a quick answer to the powerful of today is getting out of the way so that BIG can grow, and in growing, devise better and better ways to meet our needs.
Crucial about this is that the valuations investors place on the dominant is logically a magnet for intrepid investment seeking a piece of huge markets made huge by the very technology companies that the chin-scratchers in our midst want government to lightly or harshly suffocate. Translated for those who need it, the genius of “market power” or “monopoly” isn’t just that the commercially wise are fulfilling needs that businesses from the past hadn’t. What makes “market power” thoroughly wondrous is that it sets the stage for its eventual replacement by something better. In other words, so-called “monopolies” signal their eventual replacement by virtue of them being “monopolies,” with all the attendant profit margins that come with dominance. Those margins signal opportunity for capital matched with ambitious talent.
So, why do such smart people like Swisher, Hanson, Richman, Fukuyama and so many others worry so publicly about commercial dominance that is the living definition of not for long? They do because they’re once again captive to the known. To the present.
That’s ok. What matters is that investors aren’t. No doubt some with risk aversion fund the known, or imitators of the known, but there’s a class of investor eternally interested in the unknown. Call this the superrich class. Possessing serious amounts of unspent wealth that they can’t possibly consume, these rich people set about re-creating how we live and work through courageous investments in visionaries eager to rush a very distant, unrecognizable, and unimaginable future into the present. They’re able to precisely because they have money to lose. Readers might remember this the next time some dopey politician promises to make the rich “pay their fair share.” What they’re really promising to do is to slow progress.
If not, as in if the richest of the rich get to keep what’s theirs, they’re then able to take much bigger risks. This is what elite professor types and media members don’t see. With their attention fully on the known, they devise answers for neutering the present. Their thoughts and answers are wasted.
Shrinking the dominant, or seeking competition for the dominant is so backwards, but that’s what Richman, Fukuyama et al are advising us to do. They don’t get it. What limits the “market power” of Amazon, Facebook, Apple, and Google will not be imitators; rather it will be companies 99.99999% of us are unaware of today, or that haven't yet opened their doors, but that are intent on creating an all knew way of doings things that will soon enough render today’s giants somewhat primitive by comparison.
A focus on the present as a way of fixing it is the wrong approach. Precisely because the “end of technology” isn’t here, obsession with the known blinds us to the unknown that will sure enough vanquish the powerful. In short, if you want to understand the future please stop worrying about what dominates the present.