The Resistance We Need: The Trump Administration Gears Up to Trust-Bust the Tech Giants


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If ever any group had it coming, it’s the giants of the tech industry. The recent decision by the Trump administration to look into monopolistic practices by the tech oligarchs—talk about collusion!—represents a welcome change from over two decades, under both parties, of sucking up to these firms as they bought up competitors and consolidated market positions that would put the likes of John D. Rockefeller to shame.

As in the gilded age a century ago, the tech industry epitomizes capitalism run amok, with huge concentrations of wealth, power, and control over key markets, like search (Google), cellphone operating systems (Apple and Google), and social media (Facebook/Instagram).

We have been accustomed to think of technology entrepreneurs as bold, risk-taking individuals who thrive on competition but now we know that it is more accurate to see them as oligarchs ruling over an industry ever more concentrated, centrally controlled and hierarchical. Rather than idealistic newcomers, they increasingly reflect the worst of American capitalism—squashing competitors, using indentured servants from abroad, colluding to fix wages, and dodging taxes while creating ever more social anomie and alienation.

The Valley, as one observer puts it, has taken a “reprieve from the bogeymen in the garage.” That is, while the tech giants peddle the tired meritocratic myth that there’s some genius in a garage this close to replacing them—if that genius could still afford a garage in the Bay Area, at least—in fact, they simply buy out or price out new competitors.

The industry’s influence flourished most under President Obama, where Google’s presence, for example, was all but ubiquitous, with nearly 250 people shuttling one way or the other between government service and Google employment, and dozens of others going between the search giant and his campaign operations. Needless to say, the search giant had little to fear from corporate lawyer Eric Holder’s Justice Department, which was more interested in delivering politically correct homilies than protecting consumers or small businesses through anti-trust actions.

Lack of oversight from Washington allowed these firms to grow to gargantuan size and consolidate their monopolistic control. Now they are taking over much of what’s left, from food delivery to finance, movies to space exploration. The message to everyone else? Move aside—we’re taking over.

Financed by a small charmed circle of venture capitalists and private equity firms, these behemoths have employed their close political ties in Washington to avoid antitrust scrutiny that firms in less “sexy” industries would be hard-put to avoid. This has allowed, for instance, Facebook to buy up competitors like Instagram, WhatsApp and Oculus, and for Google to devour hundreds of firms, at timespurchasing a new venture every week.

As big donors to the Democratic Party and supporters of numerous politically correct causes, tech giants, led by Google, seemed at one point about to acquire the progressive left as well. But with the demise of corporate facilitator Hillary Clinton, the ascendant Bernie Sanders-Elizabeth Warren style populism now openly targets the oligarchs and favors their breakup. Progressives, at least those not dependent on oligarchal funding, increasingly also question their labor practices, which are resolutely anti-union and extraordinarily inegalitarian, and their ability to hoard cash while paying minimal or no taxes.

Compounding their political jeopardy, the oligarchs also have managed to alienate the right, traditional defenders of property rights and capital. Some conservatives doggedly still defend them, but more have been alienated by the firms’ systematic bias against conservatives—often suspending their online presences, and evenaccess to online credit.

As a result, there is growing support on the right for anti-trust action against the oligarchy, as evidenced in Glenn Reynolds’ new book, The Social Media Upheaval. Others, such as centrist Michael Lind, suggest that if these are in fact natural monopolies, it would be best that they be regulated as such, much as we have seen in markets such as electricity and water. Whatever the kind of poison being prescribed, the oligarchs have generated a remarkable range of enemies.

The new pressure on big tech from the Trump administration, and from the left, is critical if we wish to remain an open and democratic society with broad-based opportunity. It’s important to understand that these companies—unlike earlier generations of tech firms that manufactured physical products in the U.S—are not, as economist Robert Gordon notes, making our economy much more productive or improving people’s lives as they focus on ad revenue and surveillance.

“We wanted flying cars,” lamented tech entrepreneur Peter Thiel, “and we got 140 characters.”

In the end, the oligarchs’ steady accumulation of wealth, power and information—like that of the Gilded Age moguls—is incompatible to a fair and responsive republic. Their promise is to create a nation of subsidized rental serfs, who can spend their time doing gig work or enjoying what Google calls “immersive computing.”

With little commitment to upward mobility, the oligarch’s ascension would mean that the rest of us—billions of people of “surplus humanity”—will be turned into something like medieval serfs, powerless and landless, whose last remaining power may be the threat of setting up the guillotine in the town square.

You want that future for yourself or your children? Of course you don’t. Therefore we need to applaud the Trump anti-trust moves, as well as the fierce new critiques coming from the left. But critics like Warren, Sanders, and Trump will still need to overcome the inevitable gauntlet of media influencers, big money donations, and well-financed propaganda that the oligarchs can muster. After all, they can always find new tools, like Kamala Harris, who is busily raising cash along San Francisco’s “millionaire row.”

At the end of the Middle Ages, the middle classes displaced their aristocratic lords to establish the first modern democracies. A century ago both parties participated in efforts to curb the power of the Gilded Age moguls. Resistance to overweening power means more than just fighting Trump or fending off the left.

In our day, if people left or right want to take our future back, they first must seize it from the tech oligarchy.

This piece originally appeared in The Daily Beast.

Joel Kotkin is the Presidential Fellow in Urban Futures at Chapman University, director of the Chapman Center for Demographics and Policy and executive director of the Center for Opportunity Urbanism in Houston, Texas. He is author of eight books and co-editor of the recently released Infinite Suburbia. He also serves as executive director of the widely read website www.newgeography.com and is a regular contributor to Forbes.com, Real Clear Politics, the Daily Beast, City Journal and Southern California News Group.

Photo: From http://www.shopcatalog.com/via Flickr, using CC License.



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