We Didn’t Ask for This Internet

25:02Similarly on Facebook itself, it's under 20%. I forget the exact number, but it's very low. They have moved under competition from TikTok specifically, although not only, to these AI-driven algorithmic feeds showing you not what you have asked to see, but what they find will keep you there. And what they are finding is that it will, in fact, to keep you there and people are coming back to it and they spend more time on Instagram when you turn the feed into this algorithmic feed. This is the whole reveal preference thing that you were talking about earlier. My personal experience of Instagram when I go on it now is one reason I try to go on it less is that I can actually feel how much more compelling it is.

25:40I like it less, but the feeling of getting pulled into something is much stronger. And so I think if you had Mark Zuckerberg arisen from his... Sarcophagus. I was going to say office. because I'm a more polite person here. He would say, we did this under competitive pressure. TikTok was eating our lunch. We stole a bunch of things from TikTok and now we're doing better. We also stole a bunch of things from Snapchat and now we're doing better. Because in fact, we are under a lot of competition and we are incredibly good at responding to that competition in ways that our user base responds to. This is not in shitification.

26:14This is the magic of competition itself. And you know that because actually look at our profit margin and look at how much we've changed. So let me say that I don't think competition is a good unto itself. And I think it is absolutely possible to compete to become the world's most efficient human rights violator. The reason I like competition is because it makes firms into a rabble instead of a cartel. So in 2022, two teenagers reverse-engineered Instagram, and they made an app called OGApp. And the way OGApp worked is you gave it your login and password. It pretended to be you and logged into Instagram.

26:51It grabbed the session key. It grabbed everything in your Instagram feed. It discarded the ads. It discarded the suggestions. It discarded all of the stuff that wasn't a chronological feed of the people you followed that they posted recently. Facebook or Meta sent a letter to Apple and Google who obliged them by removing the app because there's honor among thieves. So if you want to find out what people actually prefer, you have to have a market in which people who disagree with the consensus that people are kind of gut flora for immortal colony organisms we call limited liability corporations and that they are entitled to dignity and moral consideration as beings unto themselves.

27:29Those people have to be offering some of the alternatives to find out what they want. But because under modern IP law, something called the Digital Millennium Copyright Act, it is a felony to modify the app without permission, when Meta sent the letter to Apple and Google, they agreed that they would side with Meta. And because you can't modify those platforms to accept apps that haven't run through the store, that was the end of the road for OGM. But I think this is a little bit of a narrowed example. As somebody who gets a huge number of press releases for all these pro-social apps that are built to compete with Instagram and TikTok and all of them, apps that are meant to respect your attention, apps that are meant to be virtuous in a way these apps are not, and watches one after another, after another, after another, basically go nowhere, get out-competed.

28:18The point I'm making is the example you're giving, they were able to basically say there was a term of service violation. Maybe they should not be allowed to do that, but there are lots of things that emerge and are meant to be better or different or something. And people do. This is where I want to make sure my producer has a voice. There are people who just absolutely like TikTok. There are people who like Instagram. They know there are other things out there, and they're not clamoring for a competitor or an alternative. I think suggesting that there is no capacity to switch is going a little far.

28:48No, I'm not saying there's no capacity to switch. I'm saying the higher the switching costs are, the lower the likelihood that people will leave. You know, when we had pop-up ads in our browsers, and real pop-up ads, the paleolithic pop-up ad that was a whole new browser window that spawned one pixel squared, autoplayed audio, ran away from your cursor, the way that we got rid of that was it was legal to modify browsers to have pop-up blockers. More than 50 % of us have installed an ad blocker in our browser. Doc Searles calls it the largest consumer boycott in human history. And as a result, there is some moderation upon the invasiveness of what a browser does to you that is in marked contrast with apps because reverse engineering an app because it's not an open platform is illegal under American copyright law.

29:34It violates Section 1201 of the Digital Millennium Copyright Act. And so when we talk about how these platforms have competed their way into toxicity, we're excluding a form of competition that we have made illegal. For example, ad blockers, for example, privacy blockers, for example, things that discard algorithmic suggestions and so on. Taking those off the table means that the only competitors you get are firms that are capable of doing a sort of holist-bolist replacement to convince you that, no, you don't want to use Instagram anymore, you want to use TikTok instead, as opposed to you'd like to use TikTok or Instagram rather, but in a slightly different way that defends your interests against the firm's interests.

30:11And we mustn't ever forget that within digital technology and living memory, we had a mode of competition that we prohibited that often served as a very rapid response to specifically the thing you're worried about here. I have a friend, Andrea Downing, who has the gene for breast cancer. And she's part of a breast cancer previvor group that was courted by Facebook in the early 2010s. And they moved there, and this group is hugely consequential to them. Because if you have the breast cancer gene, you are deciding whether to have your breasts removed, your ovaries removed, the women in your life, your daughters, your sisters, your mothers, they're dying or sick, and you're making care decisions.

30:50This group is hugely important. And Andrea discovered that you could enumerate the full membership of any Facebook group, whether or not you were a member of it. This is hugely important to her friends there. She reported it to Facebook. Facebook said, that's a feature, not a bug. We're going to keep it. They sued. It was non-consensually settled when the FTC settled all the privacy claims. And they are still there because they cannot overcome the collective action problem that it takes to leave. Now, they will eventually. When Facebook is terrible enough, that community will shatter, and maybe it will never reform.

31:25That is not a good outcome.

31:49All right, Tim, I want to go to your story here. One of the core tales you tell in your book is about Amazon. So walk me through the process of moving a platform from a kind of healthy, constructive platform to become an extractive platform through your kind of story of what happened with Amazon. so back in the 90s when people were thinking about what is you know going to be great about the internet there was this great really serious promise that it was going to make a lot of people rich it was going to distribute wealth in new ways and when people talked about how that was going to happen a lot of it was like well you know everyone's going to be able to have their own store sell stuff and people are going to make a lot of money that way so that was that was a big promise and I think was an important promise.

32:33Back in the day, it was mostly eBay that people were talking about. So then you have Amazon. Amazon, as you may remember, was once upon a time a bookstore. I do remember that, actually. That's how old I am. And their basic idea was to be bigger and sell more stuff. At some point, they opened the marketplace, the Amazon marketplace, which was different because it was a platform. In other words, it was a place that people could come and sell their stuff. At first, it was used books, then it spread into other markets. And they realized a few things. One is that fulfillment would be very important.

33:09eBay in the old days, the sellers had to wrap it themselves and send it off. So that wasn't a very scalable model. And they had a good search engine. Amazon invested hard in search, and it worked. And more and more sellers came, more and more buyers came. And so the Amazon marketplace took over eBay and became very successful. And at that point, I would say, you know, maybe around 2010 or something like that, was fulfilling what I would call the dream of the internet age, which is a lot of people would be able to go in this place, start their thing, make a lot of money. It coincides with the rise of the blog and small online magazines, you know, that whole era that we are talking about.

33:52During that period, Amazon's take was below 20%. It kind of depends how you count. But, you know, somewhere between 15%, 20%. Their take of what a small business is selling. Of the sales, yeah. Yeah. So if you sold like$100, they'd take$20. I mean, it depended a little bit. There were some storage fees and so on. So, you know, it was a good place to make money. What changed, I think, was once Amazon had confidence that it had its sellers and it had its buyers more or less locked up. this is basically over the 2010s. They bought a couple companies that were potential threats to them. Diapers.com, for example.

34:30It might seem ridiculous, but diapers, you know, could have been a kind of a way in to threaten them. Why don't you tell the diapers.com story for a minute? It's a kind of famous story in Amazon, but I think it's worth telling. So there was the platform launched to be an alternative to Amazon. And their thought was, you know, every parent needs diapers delivered quickly. So why don't we make that the beginning? In the same way, Amazon started with books. And then Amazon saw this, thought it was kind of threatening, and in the strategy of the day, just bought them. Of course, the founders are pretty happy.

35:03And Amazon managed basically to capture this market. And that's when I think it turned to the extraction phase. In the last 10 years, Amazon's strategy has just basically been for its marketplace to turn the screws and increase the fees, change the margins so that many sellers are paying, you know, over 50 % or more, you know, basically the same as brick and mortar businesses. And Amazon prices are rarely any lower. They actually have done a lot to try to prevent anyone pricing lower. And I think the one thing I would focus on is their, what they call advertising, which may be familiar to you as sort of the sponsored results that you get when you're searching.

35:47So what's going on there is that sellers are bidding against each other, bidding down their own margins to get a higher up in the search results. And that little trick, that sort of one weird trick has become this extraordinary cash cow. It's more profitable than Amazon Web Services, which is sort of surprising. Last year, it was 56 billion. Just paying Amazon for higher rankings in their search results was$56 billion. Yes,$56 billion. It's looking like it's going to be over$70 billion. Corey, when I'm searching on Amazon and I see that Amazon's choice looks like a little prize, like that product won a competition where a bunch of editors chose it as the best one, what am I looking at there?

36:33So that is broadly part of this thing Tim was discussing, where they're piling on junk fees for the right to be at the top of the results. Sometimes it's more subtle where if you're not paying for Prime and paying for fulfillment by Amazon and paying for all these other things, you aren't eligible. And the more of these you buy, the greater chance you have of being chosen. But are they literally paying to be Amazon's top choice? I mean, as a dumb consumer, maybe I look at that and I think, oh, this is some algorithmic combination of is it the bestseller, what are its reviews, etc. So you're right that it is algorithmic, but the algorithmic inputs are not grounded primarily in things like quality or customer satisfaction.

37:13They're grounded in how many different ways you've made your business dependent on Amazon in such a way that every dollar you make is having more and more of that dollar extracted by Amazon. There's some good empirical work on this from Maria Mazzucato and Tim O 'Reilly, where they calculate that the first result on an Amazon search engine results page on average is 17 percent more expensive than the best match for your search. So that's what you're saying is basically the Amazon top choice is the worst choice. So this really feels to me like a place where, to use Corey's word, things in Shittified, that when I go around the internet now, when I play something in a Spotify playlist or click on a song I like and move to the radio version of Spotify, or when I search something on Google, or when I search something on Amazon, these used to be very valuable services to me.

38:04To search for something on Amazon and see rankings weighted by how popular the product is, how high the reviews are, right? Like I took the weighting of the search as to some degree a signal of quality. Certainly Google, the whole idea was that what comes first in search was built on PageRank and it was going to be quality. Spotify had an algorithmic dimension to it, but it was supposed to be showing me things that people like me would like to listen to. And now there is so much sponsored content in every one of these results. And it is so unclear what is what and who is paying for what and why I'm getting this song or that result.

38:41You know, one reason I ended up on these platforms is because I trusted these results. And now I trust nothing. Yeah, I mean, it's going back to the definition of extraction. I mean, it's, we are kind of paying$70 billion collectively to make search worse. So when does this move from, this is just their business model. And if you want to find something else, like go buy something on Walmart, go buy something on Target, go buy something at Best Buy. You can do all those. I've done all those. I just ordered a blender from Kohl's versus we've moved to extraction and we should see it as a public policy problem.

39:18Yeah, I think that's a really great question. It's a kind of question we've faced, I think, repeatedly in history. When you start to have a business model start to settle down, you see less real disruptive competition possible. And I think at some level, once a market has settled, at some point you've got to call a limit. And we do that in many other markets. And Amazon is still a great way to find a lot of progress. It's the world's largest marketplace. But I would say they're running themselves like an unregulated monopoly. Both of you spend a lot of time on the number of small acquisitions that these companies make.

40:02And maybe many of them get shut down or they acquihire the top people. but there are also things that might have grown into something bigger or else. On the other side, sometimes it really is a case that a big player buying something smaller, they can scale it up into something, you know, new, like Google bought, I mean, this was actually a fairly big acquisition, but Waymo, and kind of amazingly, like, they seem to have made driverless cars work, and I think access to Google's compute and other things was not insignificant in that. And you can look at other cases where, you know, these companies buying something small, they're able to build it into something that ends up being a great option in Microsoft Office or in Google Docs or whatever it might be.

40:43So how do you think about, on the one hand, the ways in which, I mean, I think it's what Google's made, you know, more than a thousand acquisitions over, you know, some number of years. How do you think about the ways in which that harms competition? but also you know i've known founders who get acquired and are excited to get acquired because they think it will give them scale and the capacity to compete in a way they they wouldn't versus google just trying to do it itself i think the antitrust level is one thing but the the sort of anti-competitive versus pro-scale level is like a much bigger challenge the way silicon valley now works and i'm curious to hear you talk through the the pros and the cons of that yeah i think that's a really great question.

41:24You know, Joseph Schumpeter back in 1911 wrote a book about entrepreneurs, basically. And he said, you know, these very unusual people who are willing to go out and start to, you know, take these kind of risks. They have some vision, they do this kind of thing. And he thought they were essential to economic growth, that they were these kind of unusual, almost like superheroes, and would do these things and go out and take these chances. the United States economy in general has thrived because it has a lot of those kind of individuals and they can start things. And I think we've erred too far in having all the brains under one roof.

42:01You know, it's starting to remind me of AT &T in the 60s or IBM, where they sort of became much more centralized about innovation and big ideas would never be developed. It became kind of group thinky, I think, when the Justice Department did a deal, sued AT &T, tried to break them up, and they forced them, AT &T, to stay out of computing forever and also license all of their patents, including the transistor patent. And all kinds of people started quitting their jobs and saying, I'm going to start a semiconductor firm. And there lies the origins of U.S. semiconductors and also, frankly, U.S. computing without AT &T.

42:38So I think we have done much better with divided technological leadership. I frankly think that, you know, LLMs might never have gotten started without OpenAI being an alternative force because they're obviously threatening to Google's business model. Although don't, in a way, you have to give Google some credit on LLMs specifically. You were talking about transistors a minute ago, but Google does the fundamental research in Transformers and releases it publicly and creates a many ways in the industry. But doesn't do anything with it internally until there's a competitor that threatens them. It's just striking how good of an actor they were for a period on AI specifically, right?

43:14Like treating it like they had a Bell Labs. I agree with that. It actually is a lot like Bell Labs in the sense that Bell Labs kept inventing stuff. I mean, Bell Labs collected these, you know, a lot of amazing people and then never let things come to market. The internet being probably the best example of it. Yeah, I think when you look at these companies and their acquisitions, what you see is that these companies very quickly suffer from what both Brandeis and Tim called the curse of bigness, that they find it very hard to bring an actual product to market that they invent in-house. When you look at Google, they've had like one really successful consumer-facing product launch, and that was in the previous millennium.

43:48And almost everything they made in this millennium failed. It either didn't launch or after it launched, they shut it down. Whereas their giant successes, their video stack, their ad tech stack, documents, collaboration, maps, navigation, server management, mobile, right? These are companies they acquired from someone else and operationalized. And I'm an ex-ops guy. I'm a recovering sysadmin. So I'm not going to say that that's nothing. It is a skill unto itself, the careful work to make things work and make them resilient and scale them. But the idea that that has to happen under one roof, I think, is a false binary.

44:24I mean, one of the things Google did, arguably far more efficiently than they hired innovators is they hired operations people. And those are the people who really do the yeoman service at Google because the innovators, the product managers, never get to launch. They only get to buy other people's products and refine them. You know, it comes down to what you think of is the track record, I guess, of monopolized innovation. And it has some hits, but I'm saying a much more mixed model, I think, historically is a lot stronger. If you look at the entire track record of U.S. innovation, I think monopoly innovation, you know, leads you towards AT &T, Boeing, General Motors kind of model, as opposed to what the best of Silicon Valley has been.

45:06And meanwhile, I think you mentioned aqua hires for people who aren't unfortunate enough to be steeped in the business of Silicon Valley. An acquihire is when a company is purchased not for the product it makes, but because the team who made it have proved they can make a product. And then they shut down the product and they hire the team. And acquihires are, I think, a leading indicator of pathology in tech and investment. An acquihire is basically a post-grad project where venture capitalists sink some money into you pretending that you're going to make a product. It's a science fair demo. in the hopes that the company will buy you and in lieu of a hiring bonus will give you stock and in lieu of a finder's fee will give them stock.

45:47But no one's trying to actually capitalize a product or a business. I think anytime you see a preponderance of acquihires in your economy, that should tell you that you need to sit down and figure out how to rejigger the incentives because your economy is sick. Corey, we've been talking here about these markets as really having two players in them, which is, well, maybe three. We've been talking about users, sellers, and platforms. But something the yearbook focuses quite a bit on is a fourth, which we need to talk about too, which is labor. There are huge numbers of people working for these companies, huge number of people delivering Amazon packages and Walmart packages.

46:27And one thing that both of you focus on is the way in which as these companies become bigger and more dominant, their labor practices can become, I don't know if in-shittification is the term you would use there, but shittier or more extractive. Can you talk a bit about that side of it, what has happened to the labor practices? Yeah, I mean, we could talk about the other tech workers, right? The majority of tech workers drive for Uber or for Amazon or work in a warehouse, and they certainly don't get like free kombucha and massages, and a surgeon will freeze their eggs so they can work through their fertile years.

47:01They're in a factory in China with suicide nets around it. But an example that kind of pulls this all together, how you get monopoly, regulatory capture, the degradation of labor with technology that relies on blocks on interoperability, I think we could do no better than to talk about nurses. And I'm going to be making reference here to the work of Vina Dubel, a legal scholar who coined a very important term, algorithmic wage discrimination. In America, hospitals preferentially hire nurses through apps, and they do so as contractors. So hiring contractors means that you can avoid the unionization of nurses.

47:38And when a nurse signs on to get a shift through one of these apps, the app is able to buy the nurse's credit history. And the reason for that is that the U.S. government has not passed a new federal consumer privacy law since 1988, when Ronald Reagan signed a law that made it illegal for video store clerks to disclose your VHS rental habits. Every other form of privacy invasion of your consumer rights is lawful under federal law. And so among the things that data brokers will sell anyone who shows up with a credit card is how much credit card debt is any other person carrying and how delinquent is it?

48:18And based on that, the nurses are charged a kind of desperation premium. The more debt they're carrying, the more overdue that debt is, the lower the wage that they're offered. on the grounds that nurses who are facing economic privation and desperation will accept a lower wage to do the same job. Now, this is not a novel insight. Paying more desperate workers less money is a thing that you can find in like Tennessee Ernie Ford songs about 19th century coal bosses. But the difference is that if you're a 19th century coal boss who wants to figure out how much the lowest wage each coal miner you're hiring is willing to take, you have to have an army of Pinkertons that like are figuring out the economic situation of every coal miner.

49:04And you have to have another army of guys in green eye shades who are making annotations to the ledger where you're calculating their pay packet. It's just not practical. So automation makes this possible. And you have this vicious cycle where the poorer a nurse is, the poorer they become, the lower the wage they're offered. And as they accumulate more consumer debt, their wage is continuously eroded. And I think we can all understand like intuitively why this is unfair and why as a nurse, you might not want it. But also like, do you really want your catheter inserted by someone who drove Uber till midnight the night before and skip breakfast this morning so they could make rent?

49:40This is the thing that makes everyone except one parochial interest worse off. And this is not a free floating economic proposition. This is the result of specific policy choices taken in living memory by named individuals who are warned at the time that this would be the likely outcome? And who did it anyway? I think this is getting at something we're starting to hear a lot about, which is anger over algorithmic pricing of various kinds. So when I was walking up to do the podcast today, the chyron on CNN, was about an investigation finding that Instacart was charging many different people many different prices.

50:14And so the price you were seeing on Instacart wasn't the price, it's your price. And I could imagine a neoclassical economist sitting in my seat right now and saying, pricing becomes more efficient when it discriminates. That the market will be more efficient if it can charge Ezra a higher price for kombucha, if I'm getting that delivered, because of things it knows about me and my kombucha habits. And it charges somebody else a lower price because it knows they value the kombucha less or a nurse a higher price or a higher wage and a lower wage, depending on their situation. That in fact, we're just getting better and better and better at finding the market-clearing price.

50:54And this is what economics always wanted. We're finally hitting the utopia of every person having, you know, the market-clearing wage and the market-clearing price. Why don't you agree with that? Yeah, I mean, the fundamental question is, is that really the kind of world you want to live in? In other words, do you constantly want to live in a place where you are being charged the maximum you would pay for something? Now, That could rebound to the benefit of people who are very poor. But in economic terms, it's always only about producers taking everything from the market. And I just think it's a very, you know, just moving away from the efficiency potentially of it.

51:33I think it makes for a very unpleasant lifestyle to be constantly feeling you're being exploited. And the other thing I'll say is there's also a huge amount of effort people make trying to move what category they're in. and, you know, pretend to be poor. So I think it is overrated. And I guess it relies on overly simplistic models of what makes people happy. There's a way in which efficiency housing is an interesting term in economics. Because in economics is in life, you want things to be somewhat efficient, but too much efficiency becomes truly inhuman. Yeah. I find this even in the very modest example of personal productivity efforts.

52:20It's great to have a to-do list. If I really force myself onto the scaffolding of a to-do list at all times, I feel like I cease to be a human being and become a kind of machine always just getting things done and responding to the emails. And I think it was important, Tim, when you said it raises the question of what kind of world you want to live in. Because the truth is that I don't want to live in a maximally efficient world. I have other competing values. You know, the competitive efficient market is good up to a point, and after a point, it becomes something corrosive to human bonds, human solidarity, just-in-time scheduling, makes sense from the perspective of economic efficiency, and not if you want healthy families in your society.

53:03And I think being able to articulate that question of what kind of world you want to live in, not just what kind of economy works on models, I think is important and often a lost political art, in my view. Yeah, I agree. And I feel there's some intuitive feelings, like people feel it's unfair. People don't like being ripped off. People hate paying junk fees. The original word for that, by the way, was bullshit fees. But there was inside government, we felt we couldn't have the president say that. So yeah, I think that gets to the heart of the matter. I mean, you had also talked about human attention.

53:38And human attention turns out to be quite commercially valuable. But do you really want every second of your time and every space you inhabit to being mined for your attention and its maximum value, even if that contributes to the, I guess, overall GDP of the economy? I mean, I'd like to have some time for my kids and friends in which no one's making any money. And, you know, it's an example of a commodity that is very close to who we are. At the end of your days, what your life was, was what you paid attention to. And the idea that you can, with maximum efficiency, mine that at every possible moment seems to me a recipe for a very bad life.

54:19I think one way to frame this rather than around efficiency is around optimization. And I think that we can understand that for a firm, the optimal arrangement is one in which they pay nothing for their inputs and charge everything for their outputs. So optimization, things are optimal from the perspective of the firm. when they can discover who is most desperate and pay them as little as possible, or who is most desperate and charge them as much as possible. But from the perspective of the users and the suppliers, things are optimal when you get paid as much as possible and are charged as little as possible.

54:59And so much of kind of the specific neurological injury that arises from getting an economics degree is organized around never asking the question sort of optimal for whom. I mentioned before that we don't have any privacy law in this country. One of the things that a privacy law would let us do is to become unoptimizable. All optimization starts with surveillance, whether it's things like TikTok trying to entice your kids to spending more time than they want to spend there. or whether that's advertisers finding ways to follow you around and hit you up with things that you're desperate for or whether it's discrimination in hiring or in lending.

55:39All of this stuff starts with an unregulated surveillance sector. We have platforms that take our data and then sell it and use it and recycle it and become sort of the Lakota of information where they use the whole surveillance package. And we do nothing to curb that behavior. it is not an incredible imaginative lift to say that we might tell them to stop.

56:22I want to pick up on surveillance because when you talk about the harms to an economy working in a human way, I think that the new frontiers and how you can surveil workers, I think this is going to become a very big political issue and probably should be already. I agree. The category that this falls into, it's broadly called bossware. And there's a whole lot of different versions of it. Like if your firm buys Office 365, Microsoft will offer your boss, the ability to stack rank divisions within your firm by like how often they move the mouse and how many typos they make and how many words they type.

57:01And then this is amazing. They will tell you how you perform against similar firms in your sector, which is like the most amazing thing I can imagine that Microsoft is finding customers for a sales pitch that says, we will show you sensitive internal information about your competitors. And apparently none of those people are like, wait, doesn't that mean you're going to show my competitors sensitive commercial information about me? So you have this on the kind of broad strokes level. But I have this notion I call the shitty technology adoption curve. If you've got a really terrible idea that involves technology that's incredibly harmful to the people it's imposed on, you can't start with me.

57:36I'm a mouthy, white, middle-class guy with a megaphone. And when I get angry, other people find out about it. You have to find people without social power. And you grind down the rough edges on their bodies. You start with prisoners. You start with people in mental asylums. You start with refugees. And then you work your way up to kids and then high school kids, blue-collar workers and pink-collar workers and white-collar workers. And it starts with, like, the only people who eat dinner under a CCTV are in Supermax. And 20 years later, it's like, no, you were just dumb enough to buy a home camera from, like, Apple or Google or God help us all, Facebook, right?

58:08So that is the shitty technology adoption curve. And if you want to know what the future of workers is, you look at the least privileged workers at the bottom. And then you see that technology working its way up. You look at drivers for Amazon, they have all these sensors pointed at their faces, sensors studded around the van. They're not given a long enough break even to deal with things like period hygiene. And so women who drive for Amazon who go into the back of the van to deal with their periods discover that that's all on camera because that's all being recorded. All of this stuff is subject to both manual and automated analytics.

58:40And at one point, Amazon was docking drivers for driving with their mouth open because that might lead to distraction while driving. And so, as you say, it kind of denudes you of all dignity. It really is very grim. And, you know, Tim and I used to ride the Toronto Transit Commission buses to school in the morning when we were going to elementary school. And we loved the drivers who would sing and tell jokes and remember you. This is the thing that makes working in the world, being in the world great. It's having a human relationship with other humans, not having standardized labor units that have been automated and standardized to the point where they can be swapped out.

59:19You know, if you give a cashier a cash register instead of making them add up things on the paper, you could give them the surplus to talk with the customers and have a human relationship with them. Or you could speed them up so that you fire nine-tenths of the cashiers and you take the remainder and you make them work at such an accelerated pace that they can't even make eye contact. Tim, there were things in Corey's description there, in his answer there, that in my view, we should just make a social decision to outlaw. Like, I am willing to say politically, I want to vote for the people who think you can't eyeball, surveil workers.

59:54And if other people want to stand up and say the surveillance of workers' eyeballs is great, like, that's a good values debate to have in a democracy, and I know where I fall on that. Then there are other things, right? I'll build on the cash register example to say that I really struggle with what I think as a public policy measure one should think about the rise of automated checkout and the way we've seen it. I watch people turned into these managers of machines. They've gone from being somebody who did check out with me and asked me how my day was and asked them how their day was. And now they get called over because the three apples I put on the weighing machine didn't weigh in correctly.

1:00:33and it seems dehumanizing to them, dehumanizing to me. I also get it. How do you think about weighing that? There's the stuff that is genuinely like grim and dystopic and maybe we should just outlaw. And then there is stuff like the just generalized automation in which there genuinely can be a consumer surplus from that. Like time is a surplus for me. Things moving faster is a surplus for me. More checkout stations is a surplus for me. And there's a cost on the other side of it. Well, the first thing I'd say is we should be making more of these kind of decisions about what we really care about and what world we want to inhabit.

1:01:08I mean, one of the things that I think happens is by default, we don't pass any laws or have new ethical codes. I mean, ethics does a lot of work, and we just sort of allow a trump card to new stuff because it's new. And, you know, I get that you don't want to ban everything new that shows up, but I feel that we have over the last 15 years or so. sometimes just taking a position that, you know, the people don't get to vote on this. I mean, a good example is everything to do with children. I don't think there's a lot of people who think it's a great thing to surveil children and have targeted ads for children and try to create addictive technologies for children.

1:01:47You know, when I worked in government, we tried to pass just basic, even child privacy laws. We couldn't get a vote ever. And so one of the things that's going on is we're not even deciding these things as a society. And that gets to, you know, the problem of Congress not taking votes on popular issues. But I also think this relates to our conversation earlier about competition and when it's good and when it's bad. Because I think for almost any endeavor, there's such a thing as healthy competition and such a thing as toxic competition. We were talking about the attention markets earlier. What is good, healthy competition in the attention markets?

1:02:25It's like making really great movies, new TV shows that people love, podcasts that people want to listen to. Toxic competition was the stuff you're talking about, essentially different forms of manipulation and addiction. And we've had this kind of like hands off, we cannot try to direct things in a positive direction. I think that has been a giant mistake. So first I would say we have to even try to make the decisions. You know, how would I do the trade-off? I mean, I guess I would start with the most unredeeming, toxic stuff and ban that first. And then see if we can, you know, I mean, that's maybe easy, but we haven't been able to even do that.

1:03:04And I was sort of shocked when I worked in government that we just could not get a vote on what seemed like stuff. Privacy laws, like how many Americans, you know, there's trade-offs with privacy. Maybe, you know, they have less data. that certain things work better. But the basics of sort of anti-surveillance law, I mean, even national security was really into this stuff. They're like, it's too easy to spy on everybody. And, you know, that's a problem for us as a national security issue. And we just could not get a vote on even the most basic anti-surveillance, which would suggest, like, if you download a dog-walking app, it shouldn't be just tracking you and uploading every kind of information about you, that that should be illegal.

1:03:44I have been very, I've been disturbed. We've not been able to do more on surveillance and privacy. And I've also been struck by how badly what has been done elsewhere seems to have worked out. I find, I call this terms and conditions capitalism, where you just move the burden onto the consumer. So Europe has put out some very sweeping rules that have given me the opportunity to individually decide which of the 303 cookies on every website I visit might be good and might be bad. Similarly, nobody's ever, in my view, to a first approximation, read an iOS terms and conditions update. And I have found that very often it seems to me where policymakers end up after the debate is saying, well, as long as there is disclosure, then the consumer can decide.

1:04:32But the consumer, in a very rational way, does not want to decide. so it has ended up I think in a very dispiriting place instead of creating a structure in which I'm confident what companies are doing is well-bounded it is demanded of me a level of cognitive work I'm not willing to do and I think nobody else is willing to do to oversee those companies myself with not really great options if I don't like what they're doing and so I'm I'm curious how you think about that. No, I couldn't agree more. I feel like if the byproduct of government action is that you are clicking on more little windows, like that is government failure.

1:05:14And I would trace it to, frankly, a lack of courage on the part of government and the regulators or the officials or, you know, to make decisions that are really supposed to help people. It's much easier to say, well, you know, I'm afraid to do something. So I'm going to help them decide. So I agree. I think the GDPR has actually failed to prevent surveillance. That being the European bill that created all those pop-ups. Yeah. GDPR, the European privacy law, succeeded, you know, in creating a lot of pop-ups and things to mess with. Succeeded in making it harder to challenge big tech companies in Europe because they're overregulated and the little guys have to also go through all this stuff.

1:05:56And so, yes, I think this has been a failure. I think for people to start to believe in government again, it has to help us in situations where we are not strong enough to deal with something much more powerful or something that has a lot more time to think about it. I mean, it's like we're playing poker against experts. You know, at some point, we need to get backbone and have government on people's side. Now I'm starting to sound like a politician. But I mean it. People say that, but really doing it makes making, you know, helping people when they are powerless or distracted or don't have energy to deal with things.

1:06:32Corey? So, look, I love you both, but I think you're dead wrong about the GDPR, just as a factual matter, about where it comes from, what it permits, what it prohibits, and why it failed. Because I agree, it failed. So you may ask yourself, how is it that GDPR compliance consists of a bunch of cookie compliance dialogues? And the answer to that is that European federalism allows tax havens to function within the federation. One of the most notorious of those is Ireland. And almost every American tech company except for Amazon pretends that it's Irish so that its profits can float in a state of untaxable grace in the Irish Sea.

1:07:07and because of the nature of the GDPR, enforcement for these bullshit cookie pop-ups, which are the progeny of the big American tech companies, starts in Dublin with the Irish Data Commissioner, who to a first approximation does nothing. That sounds bad, but I want to get you to explain the core mechanism you're describing here better because I actually don't know it because that bill did pass and then all of a sudden the entire internet filled with these pop-ups. So that's only because the companies went to Ireland, broke the law and said, we're not breaking the law. And if you disagree, you have to ask the Irish data commissioner to enforce against us.

1:07:43But a few people, Johnny Ryan with the Irish Civil Liberties Association, Max Schrems with NOIB, this None of Your Business, this nonprofit, European nonprofit, they dragged some of those cases to Germany. More importantly, they've got the European Commission to start modifying the way the law works. So you can just you can tick a box in your browser preferences and it can come turned on by default that says, I don't want to be spied on. And then they're not allowed to ask you. I mean, the answer is just going to be no. And so I think that corporations want you to think that it's transcendentally hard to write a good law that bans companies from collecting data on you.

1:08:22And what they mean is it's transcendentally hard to police monopolies once they've attained monopoly status because they are more powerful than governments. And if that's their message, then a lot of us would be like, well, we need to do something. We need to turn the cartel into a rabble again, as opposed to, God, I guess governments just have no role in solving this problem. The one place where I do disagree with you, having covered a lot of different, both cartels and rabbles, lobbying Congress, it's not easy to regulate the association of community banks, for instance. When you have something where there are, in every single district, like individual leaders of the district who will come and lobby their member of Congress, it's really hard.

1:09:01I'm not saying that monopolies are good because they make it easier to regulate. I'm just saying that it doesn't solve the problem of the government runs on money and influence. Sure, but can we agree on necessary but insufficient? Yeah, so we can do that. I want to ask, but I want to build on this and ask Tim about a separate but related question. Tim, you mentioned a second ago sort of the entertainment industry. And one of the questions about to come up is whether Netflix should be able to buy all of the assets of or all the entertainment assets, I should say, of Time Warner. And this is one where I think people who care about the quality of the media we consume seem for reasons that seem compelling to me very, very worried about having that happen.

1:09:47how would you think about that and is this a place where we need to be say making values judgments that are different than our antitrust judgments is this a place where the antitrust laws can suffice is everybody just worried about something they don't need to be worried about how do you see it yeah no i i think this is a place where if the antitrust laws are enforced correctly and fairly that the acquisition would be blocked and i'd say that this is not a particularly exotic situation in the sense that you have the number one premium streaming company wanting to buy the number three or number four.

1:10:22And if you do the numbers under the guidelines, which the government issues to tell people when their mergers are presumptively illegal, the result is that this is a presumptively illegal merger. The reason I do think it's bad is I think that Netflix and Time Warner have frankly, over their history, been some of the most innovative, of interesting outlets. And often in an oppositional role, you know, this goes way back, but like, you know, Time Warner took a chance on sound film back in the 20s. In the 50s, they took a chance on television, which people thought was, you know, useless. And then prestige television, early thousands with HBO and the golden age.

1:11:01So they've taken a lot of bets. Netflix has done a lot of innovative stuff, really interesting, obviously. And frankly, you want to talk about good tech over the last 20 years. How about, you know, not having to wait until your show comes on? That's a form of efficiency I can agree with. And I think it would be a tragedy to have these two companies who are often so oppositional combined into one. I think culturally it would be a great mushification. At the economic level, just to continue on this, I think it's usually going to be those two companies who are bidding for the most interesting shows.

1:11:35So if you had a new version of White Lotus or something or The Wire, who are going to be bidding for it? It's going to be Netflix and Warner, HBO and Netflix or others. So, you know, the elimination of one bidder is just the definition of a loss of useful competition. So, yeah, I think it's pretty straightforwardly illegal. I don't think it's that complicated. Corey, you looked like you wanted to jump in on that. No, I think that one of the things we should probably anticipate Time Warner saying in defense of this merger is the same thing that Simon & Schuster and Penguin Random House said in defense of their failed merger that was blocked under the Biden administration.

1:12:11They said, oh, well, we'll still internally bid against one another within our divisions for the most premium material and that we'll be exposed to discipline that way. And I love what Stephen King had to say about this when he testified. He said, that's like me and my wife promising to both bid against each other on the next house we move into. Tim, one thing I was thinking about while I was reading your book was the metaphor you use of a gardener. That the way to think about economic regulation and antitrust and a bunch of the different buckets of solutions we're talking about is like a gardener who is trying to prune certain species and plants from taking over their garden.

1:12:46And the gardener has to make judgments. And, you know, there are some decisions you make as a gardener where you don't want blight getting all over your garden and killing everything. But others are made for aesthetic reasons and others are made because you want to have native species and non-invasive species. And there are all these sort of decisions being made. And having been around conversations of economic regulation and tech regulation for a long time, I've come to this view that there is a fetish in them for truly neutral rules. That what people always seem to be looking for is a rule that you don't have to apply any judgment on.

1:13:20You can just say, if you get over this line, everybody knows it's bad. As opposed to actually having to say, we have views about how the economy should work. We have views about how our society should work. We want the interests of small businesses to prosper, and they'll prosper more. They don't have to give 30 cents of every dollar to Apple or Google or, you know, if you're selling on the Facebook marketplace, Facebook. And yet, I mean, you've been a policymaker, Tim. I think that there has been in a kind of like a defensive crouch, particularly among Democrats. And, you know, Lena Kahn and others were an exception to this.

1:13:52but a sort of effort to describe everything neutrally when sometimes you just don't want to be neutral on how fundamental companies and markets in your economy are working. You want to be able to have values that those serve as opposed to your values are subservient to your economy. Yes, I know. I agree with that. And I think it's an astute observation. I think it kind of comes, as I said earlier, from a lack of courage or vision that it reminds me of you said when you were talking about, well, okay, we'll just create a bunch of windows and let everybody decide what options they want for their privacy and hope that works.

1:14:27You know, because it comes from that same impulse that we don't actually want to arrive at a vision of the good society. It's one of the flaws of classic liberalism, frankly, if you get into the political theory. And frankly, the Gardner metaphor is targeted that it's not just like, let it all run and see what happens. It is one where you have some idea of what kind of world we want to live in and what kind of society we think is good. And you have to make decisions based on that. I think we need a vision of what we want and what a good country looks like and a good place to live. The thing we really want to be asking before we ask any of these other questions is how often are you going to have to answer this question?

1:15:12So lots of people are like, oh, we should just ban hate speech and harassment on platforms. Well, that's hard, not because we shouldn't do it, but because agreeing what hate speech is, agreeing whether a given act is hate speech, agreeing whether the platform took sufficient technical countermeasures to prevent it is the kind of thing you might spend five years on, and hate speech happens a hundred times a minute on platforms. Meanwhile, if we said we're going to have a bright line rule that platforms must allow people to leave but continue to communicate with the people they want to hear from, then people who are subjected to hate speech, who are currently there because the only thing worse than being a member of a disfavored and abused minority as being a member of a disfavored abused minority who is isolated from your community, those people could leave and go somewhere else.

1:15:53And it's not that we shouldn't continue to work on hate speech in parallel, but if you think that a rule that takes three years to answer a question is gonna solve a problem that happens a hundred times a second, you're implicitly committing to full employment for every lawyer in the world to just answer this question. One thing I admire about both of your books is that you spend a lot of time on solutions. And so I don't think we can go through every one, but let me do it this way. For each of you, and Corey, why don't we start with you? If you were king for a day, what are the three areas or the three policies, you can define it the way you want, that you think would make the most difference?

1:16:33Sure. One would be getting rid of this anti-circumvention law in America, it's Section 1201 of the Digital Millennium Copyright Act, and saying that it should be legal to modify things you own to do things that are legal and that it shouldn't be the purview of the manufacturer to stop you from doing it. Another one would be to create a muscular federal privacy right with a private right of action so that impact litigators like the Electronic Frontier Foundation as well as aggrieved individuals could bring cases when their privacy laws were violated. And I guess the third would be an interoperability mandate specifically for social media.

1:17:07So it would be a rule, and we've had versions of this, The Access Act was introduced, I think, three times, various versions. They're all pretty good. Mark Warner, I think, was the main senator behind them. But a thing that just says that you should be able to leave a social media network and go to another one and continue to receive the messages people send to you and reply to them the same way you can leave one phone carrier and go to the other. And there's a lot of technical details about what that standard looks like and how you avoid embedding parochial interests of incumbents and so on. I don't think they're insurmountable.

1:17:36And I think that the tradeoffs are more than worth it. Tim? So I'll say three things. So first, I think we need the confidence to ban the worst and most toxic business models that are out there, you know, whether it's exploitation of children, whether frankly, it's some of this total absolute price discrimination you're talking about, which may technically already be illegal. Number two, I think that it's unquestionable that the platforms have become essential. Commerce, the main tech platforms, I'm not in any way thinking you can do without them. And so I think we need to understand which of them need to be treated more like utilities and which of them need to be not allowed to discriminate in favor of themselves or as between customers to try to maximize their extraction.

1:18:21Can I hold you on that one for a minute? Because I always, when I hear this, it makes sense to me. Yes. And then I think to myself, do the people I know who focus on how utilities act and are regulated seem happy with the situation? And the answer is no. They all think it's a total disaster. So when you say they should be treated as utilities, but, you know, you worked in the Biden administration. You know, everybody who works on, say, green energy will tell you that the models and regulatory structures of the utilities is like a huge, huge, huge problem. What specifically do you mean? It's a good question.

1:18:54And I've spent a lot of my life exposed to that. But I think what's important about utility regulation is what it doesn't allow to happen. Like the electric networks, the electric utility regulators are not perfect. On the other hand, if you think about the electric network, it has been an extraordinary foundation for people to build stuff on. And the reason they're able to build on it is they don't think the electric network is going to take like half their profits if you invent the computer on top of it. Or they don't think that, for example, the electric network is going to decide that, you know, it likes Samsung toasters instead of like LGE, I don't know, whoever else's toasters, Zenith, something like that.

1:19:32So they don't discriminate between manufacturers on the electric network. And so I think we need to understand and look carefully at which part of the platforms are the most likely electric network or the broadband network, where they are essential to the rest of business and therefore need to play by different rules. And some of those main rules, the most obvious are duties of treating everybody the same, so they don't play favorites. And then if you've got it figured out, you get to the question of price regulation, maybe Amazon's margin be capped at 30 % or something like that. And then number three for you?

1:20:07Number three, I think we need a constant, you know, I'm an anti-monopoly kind of guy, constant pressure on the main tech platforms so that they stay, I guess, insecure in their position and aren't able to easily counter new forms of competition. I think you have to take out of the picture the easiest ways of tamping down or eliminating challenges to your monopoly. I think that's been a really important thing in U.S. tech since AT &T, since IBM, since Microsoft, of keeping the main dominant market players insecure and force them to succeed, to improve themselves, as opposed to buying off their competitors or excluding them.

1:20:53So that's my third. So before we wrap here, I want to return to something we've sort of been circling, which is what kind of competition do we want to be encouraging among these platforms? Tim, one thing you said earlier was there can be this difference between healthy competition and toxic competition, which if you read a lot of economic commentary from the early 20th century, you hear a lot about that. And I feel like we don't talk about it that much anymore. But this is a place where I've been skeptical of the argument that many problems would be solved by breaking up the big, particularly attentional social media and algorithmic media giants.

1:21:29That I don't think Instagram has gotten better under pressure from TikTok. I don't think that more ferocious innovation and entrepreneurial work to capture my attention or my children's attention is necessarily good. Maybe the problem isn't that we're not unleashing competition. Maybe the problem is that the entire thing that the companies are trying to do, whether there are two of them or 50 of them, is negative. Yeah, it's a really good point and a good question. I think in the markets you're talking about, we have a serious failure to wall off, discourage, ban, or ethically consider wrongful the most toxic ways of making money.

1:22:11So there is such a thing as healthy, attentional competition. like making a great movie that keeps the audience enraptured for two hours, you know, producing a great podcast. That is good intentional competition. And frankly, the intentional market, you know, includes all these forms. But we have just allowed the flourishing of negative models. So I think if you had a world in which you had much more limits on what counted and what was frankly legal in terms of manipulating your devices, You would see more positive competition if you broke up some of these companies. I just think the entire marketplace of social media is cursed by the fact that we haven't gotten rid of the most brutal, toxic, and damaging business models for our country and for our children and for individuals.

1:23:00I think that is a nice place to end. So always our final question. What are the books you'd recommend to the audience? And Tim, why don't we begin with you? Sure. I'd start with E.F. Schumacher's Small is Beautiful, Economics as if People Mattered. And I say that because it targets this question of what kind of world do we want to live in? And I think our efficiency obsession is taking us in one direction, and I think we should choose a different direction. A second book is more recent. Cass Sunstein wrote a book on manipulation that is underrated and is really good for understanding what we have allowed to happen.

1:23:38It's called Manipulation, What It Is, How to Stop It. The last book, I guess this is where I got some ideas about tech platforms and the big picture, is from Paul Kennedy, Rise and Fall of the Great Powers. I feel everything is on a cycle, and every empire has its destiny, its golden age, its decline, its stagnation, and fall. And I feel like understanding imperial dynamics is very important, understanding the technological empires of our time. Corey? So my first pick is Sarah Wynne-Williams' book, Careless People. And it's a great example of the Streisand effect, that when a company tries to suppress something, it brings it interest.

1:24:17So Wynne-Williams, she was a minor diplomat in the New Zealand diplomatic corps. She became quite interested in how Facebook could be a player geopolitically. She started to sort of nudged them to give her a job as like an international governmental relations person. No one was very interested in it, but she just sort of kept at it until she got her dream job. And then the dream turned into a nightmare. My second choice is a book by Bridget Reed. It's a book called Little Bosses Everywhere. And it's an argument that the American pyramid scheme is kind of the, it's the center of our current rot.

1:24:49And everywhere you look in the MAGA movement, you find people who have been predated upon by the kinds of scams that are characteristic of this and who've adopted the kind of toxic positivity that comes with it. It is an incredibly illuminating, beautifully researched book. And then the final book is a kid's book by my favorite kid's book author ever, this guy called Daniel Pinkwater. And last year, he had a book out from Tachyon Press called Jewels, Penny, and the Rooster. And recapping the plot of this book would take 10 minutes because it is so gonzo and weird. But suffice it to say, it revolves around a young woman and a talking prize dog who find a haunted woods nearby where the young woman is welcomed by a sort of Beauty and the Beast story as a kind of savior, but who wants no part of it.

1:25:41It's funny, it's madcap, it's gonzo, it's full of heart. It is like everything great about a kid's book. I read my daughter so many Daniel Pinkwater books when she was little. They're so fun to read at bedtime. It's a middle grades book, and I cannot recommend it highly enough. Jewels, Penny, and the Rooster by the incredible Daniel Pinkwater. Corey Doctorow and Tim Wu, thank you very much. Thank you. Thanks, Desiree.

1:26:15This episode of The Oser Clown Show is produced by Annie Galvin. Fact-checking by Will Peischel. Our senior audio engineer is Jeff Gelb, with additional mixing by Amin Sahota. Our executive producer is Claire Gordon. The show's production team also includes Marie Cassione, Marina King, Jack McCordick, Kristen Lynn, Emma Kelbeck, Roland Hu, Michelle Harris, and Jan Koble. Original music by Dan Powell and Pat McCusker. Audience strategy by Christina Samalewski and Shannon Busta. The director of New York Times Pending Audio is Annie Rose-Strosser. Special thanks to Natasha Scott.