Government and Private Industry
That noted, I have to be honest: the prospect of new laws makes me increasingly nervous as well. I absolutely get the case that these platforms are powerful in a way that is deeply suspicious to Americans, and understand the impetus for new regulation, but for me the last two years have been an eye-opening experience about capacity and capability. We have witnessed the federal government, under two different administrations, fumble its way through a pandemic, while its supposedly most capable branch oversaw a disastrous withdrawl from a 20-year nation-building effort that collapsed in a matter of days. The tech industry, meanwhile, has kept the entire world economy running remote with hardly a hiccup, even as other private companies conceived of, tested, and distributed over a billion vaccines and counting. Are we sure we want the former dictating how the latter run their businesses?
China, meanwhile, is going in the opposite direction, taking seats on the board’s of the country’s most innovative companies, driving out founders and killing IPOs, and even limiting when kids can play video games. The most favorable reading of China’s actions is that at least its state has demonstrated the capacity for action — witness how China has brought COVID under control within its borders — but that comes with a level of interference with fundamental freedoms that Americans will never tolerate, and still unanswered questions about just where innovation will come from when pleasing the government is every company’s top priority.
The appropriate response to this challenge — and China is absolutely a challenge — is to reject a top-down approach conducted via regulators with less capacity and greater encumbrances than Beijing, and instead let the tech industry and private companies generally continue to do what they do best: compete. This administration’s antitrust crusaders, unfortunately, don’t really get how markets work. This snippet from The Ezra Klein Show with Tim Wu, a National Economic Council member in charge of technology and competition policy, has stuck with me ever since I heard it in 2016; this was Wu’s takeaway from working in Silicon Valley for a silicon valley startup guilty of accounting fraud: