Congress is raising a hullabaloo about what they are now calling “Big Tech” – by which they mean Facebook, Apple, Microsoft, Amazon and Google. They are threatening to break out the old anti-trust laws and scatter each company into smaller ones. Their argument is that it would be more democratic to have smaller, less powerful, tech companies.
Here are my arguments against it.
Us old people saw this before when they broke up Bell Telephone. Does anybody remember their phone bills going down and their phone service improving? Nope. Nobody remembers it because it never happened. If anything, phone service costs went up and landline phone service became, well, what it is today.
While American legislators are trying to tear successful enterprises apart, the Chinese are trying to build theirs up. One ought to think about the reasons for this difference, especially because the Chinese have clearly been operating the most successful economy in the world. Do you remember the phrase, “A Chinaman’s chance?” It used to mean no chance at all. In my lifetime, they’ve come from the least respected to the most feared economic machine.
I think that the Chinese want the obvious efficiency of giant enterprises, as almost anybody would. Apparently, the government over there thinks they can control them. Our government over here likes to pretend that they don’t interfere much in the economy. They say “let the market take care of itself,” unless, of course, their wealthy backers want another handout such as the giant tax break they just ripped off.
The pretense that the American economy can get back to some kind of individualistic entrepreneurial spirit is just that, a pretense. A capitalist economy develops the way it does because of its fundamental nature. The big ones eat the small ones. There’s no going back, and there’s actually no reason to go back anyway.
The Chinese government and the American government, both of them, can regulate big business. In fact, they can regulate big business better than they can regulate multiple smaller businesses for the simple reason that there are fewer people to watch and fewer books to audit.
Who can do research and development better than the government? Look at the pharmaceutical industry, for example. The problem with big pharma is not that they don’t take advantage of government research. The problem is that government doesn’t regulate them. Their cadres of lobbyists practically run the government instead of the other way around!
Consider the Postal Service
I’m afraid that the same people who want to break up Google are the same ones who want to break up the Post Office. We used to have the best postal service in the world, and it provided some of the best jobs we could get. Now, the good jobs are mostly gone and “privatization” is in every other paragraph. The same thing is true of what used to be the best school system in the world.
What Kind of Future?
We may daydream about a future that looks like our past. Young entrepreneurs wearing buckskins building up cattle empires on Native-Americans lands? Is that the model? Not likely. In my own sci-fi speculations about the future, revolutionaries try to build on the great accomplishments of capitalism, not tear them down. That’s for hippies.
The American government could regulate giant corporations on behalf of the people. They just don’t.