Creative Destruction or Destructive Creation?

Image

Whatever might be said about 21st-century monopolists, they get much better press than their 19th-century predecessors. Where John D. Rockefeller and Andrew Carnegie were denounced as robber barons, Facebook’s Mark Zuckerberg, Amazon’s Jeff Bezos ’86, and Google’s Eric Schmidt ’76 are generally revered. 

That might be because the modern moguls own many of the media platforms, but Jonathan Taplin ’69 insists that those companies, along with other tech giants, are just as great a threat to America as the plutocrats’ trusts were more than a century ago. That is one of the themes of his new book, Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy (Little, Brown).

Once upon a time, the internet was touted as the great democratizer, and Taplin, director emeritus at the University of Southern California’s Annenberg Innovation Lab, insists that it still can be. Contrary to popular mythology, though, many tech innovators espouse a libertarian or objectivist ethos perhaps best expressed by PayPal founder Peter Thiel, who once declared, “Competition is for losers.” 

Image

What he’s recently read: Louis Brandeis, A Life by Melvin Urofsky. “Brandeis has been the most consequential jurist of the last century. His thinking on monopoly shows that outsized corporate power poisons democracy. He embraced federalism in a way progressives seemed to have abandoned. ... I think a new progressive federalism needs to be embraced in the age of Trump.”

Courtesy Jonathan Taplin ’69

Most importantly, though, the internet giants have become monopolies because they can, and both political parties have acquiesced by rarely acting against them. “[I]nequality is not the inevitable by-product of technology and globalization or even the lopsided distribution of genius,” Taplin writes. “It is a direct result of ... policymakers [acting] as if the rules that apply to the rest of the economy do not apply to internet monopolies. Taxes, antitrust regulation, intellectual-property law — all are ignored in regulating the internet industries.” 

Although it might not be immediately apparent, the consequences for consumers and society have been dire. Taplin cites an old business adage: If you’re getting the product for free, you’re the product. Google and Facebook seem free, but users’ private data is mined and sold to advertisers, who are charged exorbitant monopoly rates. Amazon uses its leverage to drive down what it pays authors and publishers, who cannot survive without their book on the site. More people than ever are consuming books, music, and movies, but less money than ever is going to the artists. 

“The internet is very good at creating winner-takes-all scenarios,” Taplin observes in an interview. 

In 1965, Taplin got backstage at the Newport Folk Festival, where he met Albert Grossman, manager for Bob Dylan; Peter, Paul and Mary; Janis Joplin; and others. Grossman hired Taplin, while still a student, to be road manager for the Jim Kweskin Jug Band and Judy Collins. Taplin later managed Dylan, Levon Helm, and The Band, among others. Later, he produced two Martin Scorsese films and several acclaimed PBS documentaries. He later was an investment banker for Merrill Lynch, and in 1996 founded Intertainer, the first internet video-on-demand service. 

Taplin proposes several internet reforms, such as declaring Google a natural monopoly and regulating it like the phone and electric companies. He also posits that authors, musicians, or filmmakers could form cooperatives to negotiate with YouTube or Google for fairer distribution prices.

Taplin advocates against “techno-determinism,” the belief that the internet simply represents the natural order of the universe. He cites self-driving vehicles, which could put tens of thousands of truck drivers out of work while making companies such as Google or Tesla rich. 

“There is no reason to believe that just because Larry Page or Mark Zuckerberg think something should be a certain way, that that is the way the world should go. That is a decision that we as a society should make,” he says.

“I am not a Luddite. I believe in technology,” he says. “I’m just saying that the way they’re currently set up is wrong, and we have to rethink it. And then we can go forward again.”