Money Talks: Don't Be Evil-ish

0:04Elizabeth Spiers: Hello and welcome to Money Talks. I'm your host Elizabeth Spiers. Today we're here with Tim Wu who has a new book out. It's called The Age of Extraction. How tech platforms conquered the economy and threatened our future prosperity. Hi Tim.

0:18Tim Wu: Hey, great to see you again.

0:19Elizabeth Spiers: Why don't you just introduce yourself?

0:21Tim Wu: Yeah, sure. Well, I guess you got my name. I am a professor at Columbia University Law School, where I basically teach anti-monopoly classes and about private power. Previously, I worked in the Biden administration and tech policy. I worked in the Obama White House, and I guess I've done other things. I was just, with Zephyr Teachout, I ran once against Andrew Cuomo to try to knock him off and was satisfied when we finally won. So anyway, I've done a number of things. I don't know what made me get into politics.

0:51Elizabeth Spiers: Probably because you're talking to me.

0:52Tim Wu: Yeah, maybe that's true.

0:53Elizabeth Spiers: I think I did participate in a fundraiser for you during your political run.

0:57Tim Wu: Yeah.

0:58Elizabeth Spiers: Tell us about your new book.

0:59Tim Wu: I wrote this book a little bit of a personal project because I was one of the people who was just incredibly optimistic about the Internet in the 90s and early 1000s.

1:10Elizabeth Spiers: So was I.

1:11Tim Wu: Yeah.

1:12Elizabeth Spiers: What happened?

1:13Tim Wu: That's the book. I thought it was going to make everybody rich. I thought that anyone who had creative talent would, you know, have their audience. I don't know if I really believed it would make every country a democracy, but I kind of thought it could. And so the question is, basically, especially the money side, what happened? Why did it end up just being a couple of big winners and a lot of other industries getting hollowed out or reduced to kind of facile status? That is the book. It's called The Age of Extraction. And it's basically the story of that era and the sort of misunderstandings of platform power that made it all happen.

1:52Elizabeth Spiers: We'll be getting into this conversation coming up on Money Talks.

1:58Elizabeth Spiers: So I guess to begin with, just to set the stage for your argument in the book, how do you define a platform, especially as it relates to, for example, marketplaces?

2:08Tim Wu: I think most people's idea of a business is something that sells shoes or cuts your hair or produces something. But a platform is different. It's the kind of business that hosts things, brings together buyers and sellers. Often in antiquity, it was like the town square or something like that, like these spaces where things happen. And they've always been around. the idea of them being powerful and extractive is frankly something new.

2:38Elizabeth Spiers: What's the first modern example of that, especially with regard to the tech industry, since we're talking about this period of optimism that I assume you're sort of talking about the 60s, 70s, 80s, maybe?

2:49Tim Wu: Yeah, I mean, I think the first real tech platform in the form we would recognize it belongs to IBM and their System 360, and they brought it all together. They had this a platform that could run software, like all the stuff we're used to now, they pioneered. The thing about IBM is they were forced by the Justice Department to cough up software to make it a separate industry. And that kind of gave rise to this thing we call the American software industry, which is kind of everything we know now, like Microsoft, Oracle, Sun, they were all found in the 70s. So I think that's the origins of it. The one guy who really mastered the extractive model, the first to really pioneer that was definitely Bill Gates with Microsoft.

3:34Tim Wu: He kind of understood that you could invite people to lunch and have them for dinner. You know, hey, everybody, this is a great platform. Come here, use it. It's awesome. And everyone gets to it. And then sooner or later, somehow Microsoft's the only one who makes money.

3:48Elizabeth Spiers: I think about Bill Gates and extraction every time I get charged for the Microsoft Office suite that I never remember having signed up for. So when you sort of talk about the extraction phase of platforms, is that an inevitability, do you think? Because you sort of make a case in the book that it is, or at least your historical precedents all end up in these businesses that are enormous, and as they need to become more profitable or as they are organically driven toward becoming more profitable, they become extractive. Is that an inevitability?

4:21Tim Wu: No, I don't think so. So I think it has a lot to do with structure and how they're structured. So I'll give a counter example. We almost don't think of it, but like Wikipedia, born during the same period, huge platform. It's always been one of the top websites in all the website counts, but they took a different path. That's part of what gives me some optimism. It's a little late in some ways, but they took a different path and didn't go towards extraction. I mean, I think extraction is really a function of the modern U.S. economy and financial interests and the idea that a business model consists of getting a lot of power and then taking everything you can.

4:59Tim Wu: And I think it is possible a different way, but it requires different structures.

5:03Elizabeth Spiers: Yeah. To what extent do you think that tendency toward extraction is really driven by a lot of these companies being public companies and putting shareholder interests first, which they're sort of required to do?

5:15Tim Wu: I think it's completely a function of that. One of the things I talk about in the book was this kind of critical moment in the early 2000s when companies, Google is the best example, that were very idealistic, you know, talked a really great game. I was one of these guys who was like, man, these guys are really different. This is really cool. They're doing something else. I was a little surprised. And I bet many of us were, where they're like, oh, and we're going going to have a regular IPO and become a normal, just like profit making, profit reporting, public company out of Delaware. But they wrote a letter.

5:50Tim Wu: I wrote about this in the book. They wrote a letter to the shareholders saying, no, no, no, no. I know it looks like we're going to become this monstrous profit eating, uncaring company. No, but we're different. We're not a normal company. We don't want to become one. We have all these like promises of things they're going to do. You look at that now, I guess, 20 years later, I think they've broken every single promise in that letter as to what they were going to do for shareholders.

6:16Elizabeth Spiers: Yeah, you had a great factoid in there about Google moving their don't be evil slogan from the front of the employee handbook to the back, which felt like a metaphor.

6:25Tim Wu: Yeah, exactly. It's still there somewhere in the fine print, I guess. With an asterisk that says, don't be evil-ish. I'll just say a friend of mine left Google and he shall remain nameless. And I was like, why did you leave? And he was like, well, I, you know, we had all this culture of like doing good things and helping humanity. And I wanted to like, I was proposing one of these projects to do something really helpful for humanity. And they're like, can we just say we're doing that?

6:57Elizabeth Spiers: That seems to be a universal thread amongst the tech industry these days, the sort of cosmetic, we're doing this thing, but then you look at the underlying value structure of the company and it contradicts it directly. Do you think it's possible for companies to really maintain a value structure like that? Or is that just pie in the sky, given the structures and the disincentives?

7:19Tim Wu: I think it is possible. I think we have, you know, we got to think long and hard about, you know, our basically our society, our civilization and the incentives, the entities in it. The 20th century was definitely not perfect, but you did have entities that were in public trust that behaved a little differently. You know, newspapers are a good example. They've always been owned by families and they've usually sometimes taken very different stances. You know, nonprofits, universities, a lot of the nonprofit sector. And there were also for-profit companies that used to behave differently. This seems like a crazy example, but the pharmaceutical industry used to be very ethical and very like driven by non-cash considerations.

8:07Tim Wu: I know that sounds amazing to like, they could have always taken all the money, like, you know, sick people, you know, someone needs a cancer drug. How much are they going to pay? Like, obviously, everything they have. But like, you know, 70 years ago, they'll be like, well, that would be kind of wrong. We can't do that. But I think we've just let it all become this model of the more you take, you find any edge you can and just, and it's actually kind of tech related. I mean, these are almost like, I mean, they are machines designed to extract maximum value. Let's put it that way. So it's very systematic.

8:38Elizabeth Spiers: Yeah. One of the things that you talk a little bit about is things being platforms that are not, I think, intuitive, especially for people who are familiar with your work. And it's very tech centric as platforms. And you talk about healthcare and housing specifically. So in thinking about that, one of the corrosive factors that you mentioned is private equity investment, especially in healthcare. What are some other things that you think can take an industry like pharmaceuticals where there was a value structure that was good, or at least they had incentives to do societal good that were maybe not exactly tethered to shareholder concerns, and those things get corroded in some way?

9:16Elizabeth Spiers: How does that happen?

9:18Tim Wu: That's a deep question. You know, that's like, what happened to corporate morality or something along those lines? I mean, I think part of it, this is a kind of a deeper question. Part of it is the idea that we can get the output we want merely by a model of shareholder maximization. And, you know, whether that's actually legally required, I know you said that earlier, is disputed among corporate law scholars, the fiduciary duty. because in the 50s, corporations, it was the same charters, did not feel they had to do nothing but, you know, focus on their shareholders. So I think it's in some large part that I think there's a weakening of some of the groups.

10:05Tim Wu: I mean, there's a lack of discipline, I guess, that is important to this. I think there are disciplining forces. One of them is competition. Another is sometimes your own employees and their culture and their ethics. We're talking about farmer inside tech. I feel like there was a very strong ethic inside a lot of tech firms of, you know, we should try to be doing well and stuff. Professional norms constrain people. I'm going on and on a little bit here. But I just feel like there's a bunch of a lot of stuff that's broken down. And the faith was that, you know, shareholder maximization can take care of it.

10:38Tim Wu: And I actually think it is making us poor, which is the irony of it as a country, to be too focused on a narrow set of values.

10:46Elizabeth Spiers: Yeah, well, you know, along those lines, your specialty is really talking about monopolization and antitrust. Is there anything structural to monopoly business that makes it even harder to do that?

10:56Tim Wu: Well, I mean, a monopoly business is undisciplined. And so it has extractive power, almost by definition. and it doesn't have anyone to stop it. I mean, let's say Amazon's misbehaving, taking too much. Ideally, you'd have someone come along who's cheaper. But if you have a well-defended monopoly, then you can get away with stuff. And I think that is kind of at the core of it is really this problem of a total lack of discipline that a monopoly enjoys.

11:24Elizabeth Spiers: So is the only remedy for that antitrust enforcement?

11:28Tim Wu: It's one of them. Some private firms are so powerful that after a while, it's kind of ridiculous to hope it'll be disrupted by a private entity or another company. I mean, historically, if you think about AT &T at its full strength, you know, the largest company on the planet Earth hooked up to everything absolutely in bed with government. Like how is some little small guy going to, you know, I believe in competition in the market, but I don't believe it's capable of miracles. Government's the only entity powerful enough to displace or to discipline certain companies. But it can use other forces.

12:02Tim Wu: It can also regulate them. I mean, the train companies, the 19th century, very powerful. They actually did break them up, but they also imposed other duties on them as an early version of net neutrality duties.

12:12Elizabeth Spiers: Can I ask you to be wildly speculative and tell us a little bit about what you think it means for antitrust enforcement that we're in the current political environment? We are, you know, in a rare instance of the Trump administration wanting some antitrust enforcement. They are supporting antitrust enforcement against shareholder advisory firms. You know, my typical progressive viewpoint lends me to just believe that this is a way of getting away from accountability, which shareholder advisory firms sometimes provide. But what do you think the environment is like now, especially with regard to the big tech companies that you're talking about that really do have, if not monopoly power, then cartel and oligopoly power?

12:51Tim Wu: I mean, the answer, like many things in this administration, is wildly inconsistent and unpredictable. And there's different strands going in different directions. I mean, in addition to what you talked about, I think President Trump called for an investigation of the meat processing industry, which we spent a lot of time on Biden administration, too. We were like, these guys, you know, there are industries that are better and worse. And, you know, tech, they're very extractive industry, and they take too much, but their products are good. Farmer can be quite evil. Meat processing is maybe the most evil industry out there, because not only are they raising prices.

13:25Tim Wu: They impoverish farmers. They also kind of like torture animals and destroy the environment. They're a bad... Anyway, that's a partial on the side, but...

13:32Elizabeth Spiers: You would think we would have learned something since Upton Sinclair, but no.

13:35Tim Wu: No, that's a very dark industry. I was doing research for another one of my books about the Brazilian meat processing industry. And they got caught in a scandal where they had a big charitable project to feed schools food, but they were using their spoiled meat to like, terrible. And they got in trouble for like, housing some of their workers with the animals. They're just like a dark industry, very dark. Anyway, I'm sorry, I got to the side there. But I think it's the Trump administration is wildly inconsistent. Occasionally, they're, you know, big trust busting, like we're going to break up meat processing.

14:10Tim Wu: So in tech in particular, many people don't seem to realize but there are active antitrust cases against Apple, Amazon, another Google case, like the first one. There's all these cases, which if taken to their extreme and if one could lead to the breakup of every tech company. And they're still alive and they're still being fought. So that is going on in the one hand. On the other hand, you have, you know, President Trump hanging out with all these guys and like, buddying around with them. So okay, that doesn't look so great. But then the cases keep going. So you know, what is going on exactly?

14:45Tim Wu: I've talked to some of the lawyers in antitrust and there they are. And, you know, they're very determined to see these cases through, but I am nervous. Have you ever noticed something in this administration where sometimes it seems really determined unless someone offers them a large enough bribe and then it goes away?

15:05Elizabeth Spiers: Yeah. Amazing how that just keeps happening.

15:08Tim Wu: Yeah.

15:08Elizabeth Spiers: Or, you know, as happened with this idea of a 50-year mortgage, A random Trump staffer just happens to give Trump a three by five poster with some images on it and it looks like a meme. And then suddenly he wants to do it. Yeah.

15:23Tim Wu: So I told my wife, who is an expert on like financial stuff, that we should go for the 50 year mortgage. I have a bad, you shouldn't troll your own wife, but I did that for some stupid reason.

15:36Elizabeth Spiers: We're here with Tim Wu and we're going to continue this conversation after an ad break.

15:46Elizabeth Spiers: You outline a kind of paradigm in the book where monopolization leads to extraction and ultimately to authoritarianism. And you talk about, you know, it's a five-step process. There's monopolization where platform or business consolidates all of the power, you know, and then they become extractive. And then you have stage called, you know, you sort of identify as mass resentment, followed by democratic failure, followed by the rise of a strongman figure or institution that becomes fully authoritarian. Where in this scale are we right now?

16:22Tim Wu: We are pretty far down along that line, unfortunately. So I would say that in the early 2000s, we let much of the economy become monopolized for the 10 or 20 years of the first 21st century. So then they have been on an extraction path for the last while in all kinds of area. We call it the affordability crisis, among other things. And I think there's no question that there's been a rise of mass resentment. And when I talk about mass resentment, it's a little different than like just being angry about your job. It's more like people feel that things are systematically unfair for them and that something is wrong and the system is fixed against them.

17:03Tim Wu: I mean, you hear a lot of this in MAGA. You hear it on the progressives. And there's always sort of discontent, but I think this is deeper. And this comes from a historical perspective. There are so many countries that have gone through this exactly this cycle and end up with most frequently some kind of revolution. So either the revolution that leads to some kind of autocratic leader or they just have the autocratic leader come to power themselves. So we're pretty far in that process. You know, we still have something of a democracy ongoing. But I am worried that I think like a lot of people, very worried that unless we basically redistribute wealth a lot, that it'll get worse and worse and worse.

17:44Elizabeth Spiers: So, you know, we just elected a socialist mayor here in New York City, and there's certainly a constituency of people who hear the phrase wealth redistribution and they freak out. So when you're talking about that, what sort of wealth redistribution are you thinking about specifically and what kind of policies?

18:01Tim Wu: Actually, I should be very careful about that phrase because I agree. I used a little bit loosely there. What is more important is a power redistribution. I think it's more important to have a balanced economy. So I'm kind of more into the progressive era, you know, whether it's breakup of monopolies, whether it's empowering of the parties who bargain with other powerful companies, whether it's ways of distributing the means of production. You know, the equivalent of the old days of having a lot more farmers, basically individual plot owners. I think that is a better path to long term prosperity than that sort of tax and redistribute.

18:37Tim Wu: I can say more on why I think that, but I just want to make clear that's my idea. I guess I believe in decentralized capitalism is what I believe in.

18:44Elizabeth Spiers: Well, along those lines, you talk about health care and housing in a way that I had not really thought about it. Maybe it's because I am accustomed to hearing the antitrust arguments made in the context of tech companies primarily now. But you also tell what I think of as sort of horror stories about consolidation, particularly in health care and housing, that really offer opportunities for this very extreme kind of extraction that drives people into poverty. Can you talk a little bit about the company Invitation Homes that you talked about in the book?

19:15Tim Wu: Yeah, I think a lot of companies looked at the tech platforms and said, those guys are making a lot of money. Let's do what they're doing somehow in some way. And Invitation Homes was one of several responses to the foreclosure crisis of the Great Recession in the 2012, 2013 period. And there were all these homes available for sale very cheap. So they had the idea, well, you know, using better tech, we can buy a ton of those homes, fix them up, rent them, and then sort of systematically find ways to extract money from rental markets. I think that's the key. And so, you know, that's what they've done.

19:53Tim Wu: And corporate housing, Invitation Home is one of many of these sort of new breed of giant corporate landlords that I think have something, along with the spread of software that tells individual landlords how to price their properties that have had a big role in making rent up and up and up. Invitation homes, it's not like they're, I mean, landlords have always wanted more money or whatever. But to me, it's a big difference between individual landlords and a company which owns a ton of stuff and kind of systematically moves up the prices and moves up the fees and systematically is cheap on and stingy about repairs.

20:32Tim Wu: all in the interest of just kind of, you know, bean counting. That's the business model. I think it has caused a lot of human suffering, to be honest.

20:39Elizabeth Spiers: You know, there's some research that sort of talks about renter attitude toward landlords and that says that, you know, smaller landlords are generally better liked because they're more likely to be responsive. They wouldn't dare do some of the things that you describe Invitation Homes is doing, you know, adding random fees that sort of don't make any sense, refusing to do major repairs. It's easier for companies like this to be exploitative when they don't have as much interaction with their customers.

21:09Tim Wu: Yeah, I mean, I think we've all experienced this. When you deal with a big company, you know they're systematically trying to cut on customer service or whatever it is. It's just like a budget line and add fees to every little thing. I mean, that is the nature of our economy right now. Much more of the innovation in our economy, unfortunately, in so many sectors has nothing to do with making better products, but like making it, you pay some weird fee or dividing the price up in different ways. So you don't notice you're paying or making it hard to leave. Things like that have become like definitive of U.S.

21:42Tim Wu: capitalism. It's kind of sad, actually, when you think about it.

21:45Elizabeth Spiers: Yeah, it's the make the shittier product that keeps people entrapped a little bit more. You know, during the Biden administration, I feel like Lelena Khan made some good progress on a lot of these fronts and in ways that are probably intelligible to voters in a way that a lot of antitrust isn't. You know, her push to, for example, allow people to cancel subscriptions as easily as they were able to sign up. That's something that, you know, you can explain to anybody and they intuitively understand why it's good for the consumer. Are you worried about this administration kind of unwinding all of that hard work you guys did?

22:19Tim Wu: They've unwound a lot of it, honestly. This administration is wildly inconsistent. It had this, particularly the first term, had this kind of populist thing. They occasionally did some of those things, although some of it was just a show. Some of it was like that Google thing I said where they, can we say we're doing it and not really do it? Yeah. Like on drug prices. You know, a lot of our stuff they abandoned. We had a war on junk fees. Lina was in on that one, too. And so was CFPB, Rohit Chopra. You know, there's these little fees that could be billions of dollars for the American public, especially with banks.

22:52Tim Wu: And I, well, they got rid of the CFPB altogether. So that's it for that. President Biden was really big on this non-compete ban. And Lena had a rule that said, you can't be signed up to something that says you can't get a new job. But they got rid of that. They have undone most of the stuff. Antitrust is actually still going. But all this stuff trying to help people is gone or is halfway gone, which is, I think, really tragic.

23:15Elizabeth Spiers: Well, speaking of Lena Khan, she's now on the transition team for Zoran Mamdani. So what's the benefit of having an antitrust expert on the mayor's transition team?

23:24Tim Wu: There is an anti-monopoly movement in policy world these days, and a lot of young and talented people are in that. And they see the problem, I think, the way Lena and I see it, which is it's mainly a power problem. It's mainly power of unrestrained private corporate power and, in some ways, monopoly problems. And I think Lena being there, someone who's suspicious of private equity, suspicious of private power, she sees it is first of a channel for a lot of good, frankly, for just a lot of talent to come into the administration. And second of all, kind of a symbol.

24:02Elizabeth Spiers: Yeah, yeah, that makes sense. I want to talk a little bit about antitrust as it relates to these big tech platforms. You know, you point to specifically Google's acquisition of Waze as being a pivotal moment for all of this. And you also said you were confused about why that was not really held up by antitrust backlash. So what do you think happened there?

24:24Tim Wu: Well, I was confused until that day when I, at an antitrust party, found the relevant attorney and we had a couple of drinks and I got the real answer. So I think that was a big moment in kind of this optimistic phase changing. So Waze was a startup. It began in Israel, and it had this different idea, which was, we're going to do mapping based on the people are going to contribute what's going on. They're going to report traffic conditions and where things are. So it's going to be this collaborative platform. Do you remember early thousands? Everything was about collaboration and sharing. Oh, yes.

25:01Tim Wu: Clay Shirky. Do you remember Clay? Oh, yeah. Yeah, he's obviously still around. But Clay Shirky said, the internet runs on love. That was his phrase.

25:09Elizabeth Spiers: The days of that kind of optimism.

25:12Tim Wu: I don't think Gawker ever ran on love. But maybe Gawker ran on, what would be the emotion that ran on Gawker?

25:18Elizabeth Spiers: Schadenfreude, probably.

25:22Tim Wu: Our listeners know you were the founding editor of Gawker, I hope. But yeah, so this was the early days. And, you know, Waze was taking on Google Maps, which is its own approach. And it was kind of like, wow, it's cool. Look at these new companies. And maybe Waze will be a challenger to Google one day because maybe they could add a search engine on top and be this whole thing. And then one day, Google just like abruptly bought Waze. That was the end. It was like there was a boxing match and they're like, oh, you know, we bought the other guy. It's over. How did that happen? Especially if you are even remotely acquainted with antitrust, there's this thing called merger to monopoly.

25:56Tim Wu: And those were the only two online mapping companies. There was some Apple one, but nobody used it. And for a long time, I was like, what happened? And then one day at an antitrust party, I was having some drinks, and I realized this person had been staffed during that time. So I was like, how did you get to that? Like, oh, yeah, the boss really wanted to let that go. I was like, well, what was the, you know, theory? Because look, it's like, well, no, this is his theory. He said, all right, well, Waze is what you use when you want to figure out how to get somewhere. And Google is what you use when you want to figure out where you are.

26:29Tim Wu: So they're not really competing.

26:30Elizabeth Spiers: That just sounds like Dr. Seuss logic, you know?

26:33Tim Wu: You know, sometimes it can take a lot of advanced training to come up with totally ridiculous. And I hate to sing a lot of economists. I know my best friends are economists. Sometimes economics can lead people in some really weird directions. And that's one of them. I guess he thought they were for different purposes. So I don't know.

26:50Elizabeth Spiers: I guess if you've never used either of them.

26:52Tim Wu: Yeah. Yeah, I mean, it's true ways a little more directional, Google Maps a little more, I guess. Anyway, I don't know why I'm even bothering. They're obviously competitors.

27:02Elizabeth Spiers: You also talk a lot about AI and crypto and AI in particular. It already feels like there's such rapid consolidation in that space. What do you see happening in the AI field for the next couple of years? And how do we not end up with another monopoly platform that's probably centered around open AI?

27:20Tim Wu: Well, actually, I think there's a big unanswered question, which maybe will be answered in the next year or so, which is whether AI ends up challenging big tech or kind of reinforcing big tech. I mean, obviously, I think GPT wants to be a big company, wants to be the big guys. They're obviously trying to take share from Google. but does AI as a whole technology, forget about individual companies, end up kind of upending things and challenging, let's say, Amazon Web Services or a couple other companies somehow, I don't know exactly how Facebook could challenge, or do the big tech companies invest enough themselves to head off this challenge?

28:00That to me is kind of the big, I guess, industry question.

28:04Tim Wu: And I say that because I think the moments where you have succession battles are big moments for industry. And it's kind of going on right now. And some people notice, but not everybody.

28:15Elizabeth Spiers: I was having a conversation with somebody yesterday where a woman who works at a big bank said, how do you think the economy is going? And it was such a broad question. So which part of it? And she said, well, what do you think? And then what do you think voters think? And I said, well, one of the things that is remarkable to me is how many people look at the stock market as if it's an economic indicator. Right now, stock market is heavily dominated by the Magnificent Seven and all these big tech companies, many of which are making huge bets on AI. And I think of it as this sort of potentially Wile E.

28:48Elizabeth Spiers: Coyote scenario where it all seems to be stable and holding up. And then maybe he looks down at some point and then everything just falls apart. And it seems that this dynamic speaks to a little bit of what you're saying about the dangers of consolidating power with just a very small handful of players. Are there things that you are worried about specifically that have to do with that kind of tech consolidation and how it looks against the rest of the economy, the real economy?

29:16Tim Wu: Definitely. Let me say two things about it. So one, there is this kind of sensation, a little bit like that Wile E. Coyote thing, where you feel like there's this$100 billion bill that gets passed around. And at first it's like revenue to somebody, and then it's like investment by somebody else. Like the same bill seems being reported, the same money is one company's earnings and other companies projection and everything. And maybe it's more than that. I don't know. So there's that weird sense that everything's inflated by circular investments. But let me say two more things. One is I think the extractive power of the powerful companies is hurting the rest of the economy.

29:54Tim Wu: High taxes obviously discourage investment. That's government. But platforms can also charge taxes and other companies. And if, you know, you depend and if you have to have, you know, whatever web server, if you have to have certain companies and they start charging more and more, it kind of operates like a tax. So I'm worried about that. And then when it comes to the AI bubble, I'm going to say a lot at once here, I guess. There is a sense that there is too few people making the decisions. You know, there's been this group think idea. OK, AI is the future. Right. And there's basically like five companies with huge cash reserves.

30:24Tim Wu: So we're going to throw all our money into that, which almost feels a little bit like central planning. and like, you know, the government now has decided that, you know, steel production is the future. Go for it. And then, you know, maybe it works out. Maybe it doesn't. I mean, I think they're pretty smart people working there.

30:38Elizabeth Spiers: Do you go to parties with tech investors and just say that? Yeah.

30:41Tim Wu: You have the industrial policy of Mao Zedong, which is like the great leap forward. I think centralized decision making is dangerous. Yeah. It can be good, but it's dangerous and could be a really bad bet. I guess we're going to find out.

30:54Elizabeth Spiers: Do you trust the decision makers in this situation to make the right decisions?

30:58Tim Wu: Well, I mean, I trust them more from a distance. When I go actually talk to Silicon Valley people, and they seem infected with the religion of AGI or artificial general intelligence. Like if you ask a lot of people in Silicon Valley, why are you investing hundreds of billion dollars? And they'll be like, well, we need to achieve AGI so the singularity takes effect and like our souls become transmuted into like Silicon. Whether they mean what they say when they talk about this stuff. Have you listened to Mark Andreessen lately?

31:25Elizabeth Spiers: Yes, unfortunately.

31:27Tim Wu: He's become like a raving madman or like a religious figure, actually. He kind of reminds me of a cult leader who's talking about the deliverance that's going to happen. And like if you distrust him or mess with him, you're interfering with like human destiny.

31:41Elizabeth Spiers: Yeah. To me, it sounds like just accelerationism.

31:44Tim Wu: Yeah.

31:44Elizabeth Spiers: And I don't remember that being a big feature of 90s tech optimism. Now there seems to be a feeling that if we are going to end up in either the apocalypse or the singularity, we better go ahead and get there right now. Certain people want to be first to achieve that. And it just seems a little bit nihilistic to me. I don't understand the endpoints of it.

32:05Tim Wu: You know, maybe what's weird about it, and maybe I'm going to sound dated, is maybe I like the old utopia better than the new one. The old one was like, everyone's going to be rich and live in a stable democracy and, you know, whatever. And the new one is, we're going to build a machine smarter than humanity. That might wipe it out. Yeah, that's going to wipe us out. But it's extremely important that we get there. I mean, the whole invention of open AI was to get there first so we could make it safe.

32:28Elizabeth Spiers: Yeah.

32:29Tim Wu: We have to get to heaven so we can put the carpet out or something. So we have to get there first because the other guys, Google, is going to do it in an evil way. I don't know. So I guess what I'm saying is I would have more faith in the industrial planning if it didn't have a strong religious overtones, like this death cult kind of thing.

32:45Elizabeth Spiers: I would feel better if it was, if it had some underlying consistency too, at least then you could sort of maybe plan around it or get in front of it or something. But I wrote about Andresen's techno-optimist manifesto, which I thought, you know, had all the pathos of the Unabomber manifesto, but without any of the coherence, you know, that was just stacked with contradictions. And, you know, you know, these people are trying to think very hard about these things, but there is no, they're there a lot of times. It just feels like the perennial tech imperatives to move fast and break things and just get to the next milestone.

33:19Tim Wu: No, I'd say there's a certain level also of sophomoric Nietzsche thrown in there. A lot of ubermensch, there's something in that thing about how we're designing a race of superhumans. And somehow, eventually, they make some gesture to all of humanity. But basically, there's a sense that there's going to be like a race of immortal superhuman billionaires. Now I'm going to move to Plato, who like rule everybody else and somehow make everything great. Yeah, so that's what gives me lack of confidence is that weirdness. Also, I feel that Silicon Valley has gotten way too close to government in a way that used to be the opposite of what they wanted.

33:53Tim Wu: You know, I mean, they always obviously there's always been funding. But this idea of becoming like a defense contractor and getting involved in the defense industry and obviously being favorites of President Trump, all that stuff is new and I think bad for industry.

34:07Elizabeth Spiers: Let's leave on a optimistic note or try to. What are you feeling good about, though, in terms of where we are right now? And even if we are on this slow march to authoritarianism, where do you see their potential guardrails working?

34:22Tim Wu: Well, I have some faith in the history of this country of reacting to unaccountable power. It goes in all kinds of weird directions, but there is a resistance to monopoly, which is kind of baked into the American psyche. And I think it's activated. I think the anti-monopoly movement is strong. I think like Mandami, who's kind of another related figure strong, even, you know, parts of MAGA, they all get twisted into strange directions. But there's certainly a side that this kind of idea that, you know, a completely toxically capitalistic society works well, I think is on the outs. So I think those are signs for optimism.

34:57Tim Wu: There's a lot of struggle and fight in the middle. But, you know, I have, I guess, some hope and even some hope we could get back to the original vision of the Internet. I mean, the technology is good. The platforms are awesome. They've just installed giant extraction machines on top of them. Yeah. You know, if you had Amazon without all the like junk on it, which is basically for more profit, would be pretty good for sellers. So maybe that's what I think. We built some good bones, but some crappy additions on top of them.

35:23Elizabeth Spiers: Well, maybe there's an inflection point. You know, you also talk about how Amazon was really good for sellers in the beginning. It helped small businesses spin up without having to figure out a lot of the infrastructure. And then there was a point at which it just needed to extract more revenue from those sellers. And it just kept going. How do people prevent that? How do institutions prevent their own platforms from doing that, even if they are inclined to do that? What are the policy remedies?

35:49Tim Wu: I mean, I think sometimes it has to be government, because I mean, government is our representative. I think we put too much faith, frankly, like in the Obama era. And like, these guys are really good. They never do anything bad. And I mean, that's part of why we like Google by ways. It's like, oh, you know, it's, they're like the Red Cross. They're a bunch of great guys. They'll self-police. They'll self-police. I think we have to give up on that. You know, I started my career with net neutrality and I feel like it's time to get back to like basic utility-like rules for some of the platforms.

36:15Tim Wu: That's where I end up basically. And Monopoly. I'm into net neutrality, anti-monopoly. Same person I was 20 years ago, I guess.

36:22Elizabeth Spiers: So this book is the third book in a trilogy. Is there going to be a fourth book?

36:26Tim Wu: I guess that depends how it all goes. But I'm now up to present. I'm now up to the present. The first two were Master Switch was about the birth and the big story of most Americans, information industries, the radio, telephone, movie industry. The Attention Merchants was about all the information advertising propaganda. And now we're in platforms as a third of the trilogy. So you read them all and you're either incredibly upbeat or incredibly depressed, depends on what page you're on.

36:51Elizabeth Spiers: Maybe the fourth book is Post Singularity, and it's just titled, Oh, well. Well, thank you, Tip Wu, for joining us today on Money Talks. We'll be back on Saturday with our usual Slate Money episode. And thank you to Jess and Molly for producing. And we'll see you on Saturday.