We Didn’t Ask for This Internet

The New York Times app has all this stuff that you may not have seen. The way the tabs are at the top with all of the different sections. I can immediately navigate to something that matches what I'm feeling. I go to games always. Doin' the mini, doin' the world old. I love how much content it exposed me to, things that I'd never would've thought to turn to a news app for. This app is essential. The New York Times app, all of the times, all in one place. Download it now at nytimes.com/app One was the last year that the internet felt good to you. I think everybody's different answers to this. Mine, I think, go fairly far back, maybe to the heyday of blogging, at least before, the moment when Twitter and Facebook went algorithmic. But whatever your answer to it is, I have not found many people who think, "2026, right now this internet, with all of its anger and its outrage and its AISOP, this is what we were promised. This is living at the technological peak." But even if there is this growing consensus, it's something went wrong with the internet somewhere, and that it is driving our society somewhere we don't want it to go. There's not really a consensus of what to do about it. What to do about these giant platforms increasingly spammed up with ads and sponsored results, boosting content that will keep us hooked and angry, isolating and dividing us into ranging our politics, making a few billionaires ever richer, held up by an army of low-wage workers and warehouses and undelivery bikes. Something has gone so wrong, but what do we do about it? My guest today have two theories of the case. Corydoctoro is a longtime blogger, an activist with the Electronic Frontier Foundation and the Science Fiction Riders. His new book is Insitification, why everything suddenly got worse and what to do about it. Tim Wu worked as a special assistant to President Biden for technology and competition policy. He's a professor at Columbia Law School and author of influential books on technology, clities latest to the age of extraction, how tech platforms conquered the economy, and threaten our future prosperity. Insitification and extraction. Those are the ideas I wanted to put in play together here, and I also think about what solutions they might present as always my email as a client show at NYtimes.com. Tim Wu, Corydoctoro. Welcome to the show. Thank you very much. Great to be here. So I just learned that you both went to elementary school together? Yeah, that's true. It's suburban Toronto. A weird little school with like 80 kids. It was kindergarten to eighth grade in one classroom. Older kids taught the younger kids. We more or less were left to go feral and design our own curriculum. They chucked us out of the school on Wednesday afternoons to take our subway pass and find some more fun in Toronto to go do stuff. It was great. Is there anything about that school that would lead people to becoming sworn enemies of our tech overlords? Are we love tech at the time? I mean, we were early in on Apple twos, and I frankly that's where it all started in the way. Both of our books have this kind of pining for a lost age, and I think some of it is this early era of computing when we were just like so excited, so optimistic, everything was just going to be so amazing. And that to me a little bit was fifth grade or grade five as we say, programming the Apple too. Can I slightly problematize that? So we were both also science fiction readers back then, and so, you know, 1981, first William Gibson story has been out for a couple of years. I was pretty alive to the dystopian possibilities of computers at the time, so I wouldn't call myself optimistic. I would call myself hopeful and excited, but not purely optimistic. And I'd also like to say that like John Hodgeman, nostalgia is a toxic impulse. And when I think about what I like about those days, it's not that I want to recover those days. More that I kind of dispute that the only thing an era in which people had lots of control over their computers could have turned into is one in which the computers had lots of control over them that there is probably something else that we could have done. When you're spending time on the internet, what feels bad do you about it? So what I would do is contrast what happens when things aren't great now with how I felt about what happened when things weren't great before. So I think when I was a larva on the early internet and I saw things that sucked, I would think someone's going to fix this and maybe it could be me. And now when I see bad things on the internet, I'm like, this is by design and it cannot be fixed because you would be violating the rules if you even tried. Tim, how about you? I feel it's like a tool I cannot trust. You know, I feel like the tools I like in my life, like a hammer, you know, I swing it, it does something predictable. The internet seems like it's serving two masters. You know, I search for something, I get a bunch of stuff I don't really want and I don't really know what I'm getting. I want to write like one email or check one thing, I end up in some strange rabbit hole and like three hours go by and I don't know what happened. So I feel like I'm constantly at risk of being manipulated or taken from and I don't trust the tools to do what they say they're going to do and I feel that makes using it kind of like living in a fun house. So I want to make sure I give voice to somebody who is not in the show at the moment because this has, it's going to have the flavor of the profit. The Elijah has entered the job. Yeah, right. Three, three middle aged guys who think the internet went wrong somewhere along the way. When I was working on this episode of my producer, one of the interesting tensions beyond the scenes was she doesn't think the internet is bad. She thinks TikTok is, she said a perfect platform. She's young kids and feels Amazon as a godsend for a young parent. Obviously there are many people like this who are using these platforms freely of their own volition happily. So what do you say to somebody? He says, what do you fucking all talk about? Yeah, I mean, I guess I'll start. I think that, well, the middle aged thing was there used to be better, which is I don't want to fall into that. So situation, I just think the deal is not what it could be. And I think that maybe as a consumer who sort of lightly uses this, the internet is still useful. But with people, I mean, I have children too. And I think it's hard to deny that social media has been tough on kids and has had all kinds of negative effects on that. And that really started accelerating over the last 15 years or so. I think we have a highly polarized political structure, which is made worse by social media. I think we have a problem with inequality, which has gotten worse and worse and is accentuated by the fact that the margins are just so thin for independent business. And I also think this vision that it would be this equalizer, leveler, this technology that made a lot of people rich, not just a few people rich, that it was more or less reasonable and a lucrative thing to do to start your own business, that it would sort of change some of the challenges of inequality and class structure in the United States. Now, maybe those were very high hopes. But this is the key concept in my book. And I think key to understanding the economics of our time is the importance of platforms, which are any space or any institution that brings together buyers or sellers, speakers or listeners. Every civilization has had platforms. I was in Rome a few weeks ago and you go to the Roman Forum and there it is, it's all together. The buyers, the sellers, they have the courts, they have where people gave their speeches. You know, they're kind of the core of every civilization. And at some level, why I wrote this book as I was interested in this question of what our fundamental platforms look like and how that reflects on the civilization we are building. Because I do think they have a large impact. I think that's kind of undeniable. I think that, you know, things have gotten worse in many dimensions. And I guess it relates to my view of the state of the country as well. I think we've been in a better place in other periods of American history. And I think the internet's not the only cause, but I think it's part of it. If I were having this conversation with your producer and we had some time to talk about it, I would probably walk them through a couple of the undisputed ways in which some people have found the internet get worse for them. So Tim has talked a little about margins for small businesses. There's also people who are performers who found that the take that's being sucked out of their pay packet every month is going up and up from the platforms. There's people who would like not like to be snatched by ice snatch squads who installed ice block on their iPhone only to have Tim Cook decide that ice officers were a member of a protected class and remove that app. And now you can't install that app because the iPhone only lets you install official apps. And I'd say like just because this hasn't hit you, I think unless you have a theory about why you are favored by these platforms, then you should at least be worried that this would come. And I would follow up by saying like, let's not fall into the trap of vulgar thaturism, you know, thaturism auto was there, there is no alternative. And I think tech bosses would like you to believe that too, that if you're enjoying having a conversation on Facebook with your friends, which I stipulate lots of people do, I think that's absolutely the case. And we should value and celebrate that that you just have to accept that there is no way to have a conversation with your friends that Mark Zuckerberg isn't listening in on. And that to ask for otherwise than that would be like asking for water that's not wet. It's just like not possible. And what I'm meditating for is not you don't like that thing you like. It's like I like that you like the thing you like. I want to make it good. And I also want to guard it against getting worse because just because it hasn't happened to you yet, it would be naive to think that it would never come for you. So your books are two frameworks for understanding what I would call corporate capture of the internet. The way we went from the dream of a decentralized user controlled internet to something that a small number of corporations really run and have enormous power over. And Tim, the term you focus on is extraction. Corey, the term you focus on is in shittification. So I'd like to just both to define those terms for me. What is extraction, Tim? What is in shittification? Corey. So extraction is actually a technical economic turn that refers to the ability of any entity or any firm with market power, monopoly power, to take wealth or other resources far and excess of the value of the good being provided. Not only the value being provided, but also it's cost to provide it. That's the technical definition. You know, outside of tech, it might be a pharmaceutical company. They have, you know, there's a rare disease. They have the only treatment for it. And, you know, maybe they're they're extracting as much as they can, you know, $100,000 a year or is about the usual. They pin those kind of diseases at. And that's the definition. And I think the idea of it comes from a sense, something I get from teaching at business school sometime, is that American business has, in my view, moved increasingly to focus its efforts on trying to find points of extraction as a business model, as opposed to say improving the product or lowering the price. You know, try to find the pain points where your customers really have no choice and then takes much you can kind of like in a poker game when you go all in because you got the good hand. Now, there's always been a little bit of that in business or maybe a lot like in the gilded age. But the question is, what is the ratio and how much of business is providing good services for good prices, you know, making a profit that's fine? And how much is just that different thing of extraction? So Tim, I wanted before I move on to Corey, as you mentioned, something you said there because a lot of that definition seemed to turn on how you define value. And I mean, a lot of economists would say price is a method of discovering value. If you have a pharmaceutical people are willing to pay $70,000 for that means they value it at $70,000 even if you think that is extractive. So how do you know when a price, when a profit is actually extractive versus when we're just seeing the people value that product very highly and bully on the producer for creating something people value so highly? Yeah. So if someone, for example, has no choice but they are desperate, let's say for water and someone is able to sell them, you know, a bottle of water because they're dying for $100,000 or something like that. Yes, that person does value it at that level. But we would like to have an economy and every economist would agree with this, is that an economy full of nothing but maximize monopoly prices where people are in a position to extract a firm said, is inefficient for two reasons. One is too much money gets spent on that water versus, you know, other things like maybe pursuing an education. And second, that the entity that holds that much power actually has it impulse to reduce supply, reduce output and therefore produce less of the stuff so that they can extract the higher price. I mean, this is just classic monopoly economics, I guess I'm getting into. Everyone inside themselves has something they are willing to pay. But that doesn't mean it's a good society when you're constantly paying the maximum you are willing to pay in every situation. For many of these platforms for a Facebook, for a TikTok, we're not paying for them. So when you say they are extractive, what are they extracting and from whom? So when you use Facebook, you are constantly being mined for your time, attention and data in a way that is extraordinarily valuable and that, you know, yielded something like 67 billion in profit last year. You know, things that feel free, is it free when you suddenly spend hours wandering around random things you didn't intend to? Is it free when you end up buying stuff that you didn't really want and wonder why you get it later? Is it free when you feel that you've, you know, had your vulnerabilities exploited? I would say none of that's free. Your poorer both in your own consciousness and in terms of what attention and your control over your life and your poorer probably and misspent money. I also wanted to react to something that you were sort of fainting at Ezra, which is this idea of reveal preferences, which you often hear in these discussions, right? That if you let Facebook spy on you, no matter what you say about how you feel about Facebook spying on you, you have a reveal preference and Tim used the word power when he responded to that. And I think that, you know, if you ask the neoclassicals, they'll say, well, we like models and it's hard to model qualitative aspects like power. So we just leave them out of them on and hope that it's not an important factor. And this is how you get these incredibly bizarre conclusions like if you sell your kidney to make the rent, you have a reveal preference for having one kidney. But what we actually know when we give people choices when when the state intervenes or when there's countervailing power is that often you get a different reveal preference, you know, when Apple gave Facebook users the power to tick a box and opt out of Facebook spying, 96% of Apple users tick that box. So the argument that Facebook users don't being mind being spied on, I think is blown out of the water when you actually give them a way to express preferences. And I assume the other 4% were like either drunk or Facebook employees or drunk Facebook employees, which makes sense because I would be drunk all the time if I worked at Facebook. But I think it's hard to deny that people really don't want to be spied on if they can avoid being spied on. All right, I think that's a good setup to inshitification. Yeah. Inshitification, it's really a label I hung on both an observation about a characteristic pattern of how platforms go bad. But I think much more importantly why they're going bad now because we didn't invent greed in the middle of the last decade. So something has changed. My thesis is that some exogenous factors have changed. So the pattern of platform decay is that platforms are first good to their end users while locking them in. That's stage one. And once they know that the users have a hard time departing when they face a collective action problem or when they have high switching costs, you can make things worse for the end users. Safe in the knowledge that they are unlikely to depart in order to lure in business customers by offering them a good deal. And so far so good. I think a lot of people would echo that, but they would stop there. They would say, oh, you're not paying for the product. So you're the product. So that this is about luring in users and then getting in business customers will pay for it. But that's not where it stops because the business customers are also getting screwed because the business customers get locked in and this power that the platforms end up with over their business customers is then expressed in stage three where they extract from those business customers as well. They dial down the value left behind in the platform to the kind of minimum like homeopathic residue needed to keep the users locked to the platform, the businesses locked to the users, and everything else is split up among the executives and the shareholders. And that's when the platforms apologize. But the more important part as I say is why this is happening now. Broadly, my thesis is that platforms used to face consequences when they did things that were bad for their stakeholders. And those consequences came in in four forms. They had to worry about competitors, but we let them buy those. They had to worry about regulators. But when a sector is boiled down to a cartel, they find it very easy to agree on what they're going to do and make their preferences felt because they have a lot of money because they're not competing with one another and they capture their regulators. They don't worry about their workers because tech workers were in very scarce supply and they're very valuable. And they often really cared about their users and they could really say, no, I'm not going to shittify that thing. I miss my mother's funeral to ship on time and make it stick because there was no one else to hire if they quit. And they were bringing a lot of value to the firm. But of course, tech workers famously thought that they were temporarily embarrassed founders and they didn't unionize. They didn't think they were workers. So when the power scarcity evaporated, they had not replaced it with the power of solidarity. And so now you have 500,000 tech layoffs in three years and tech workers can't hold the line. And then finally, there was new market entry. There were new companies that could exploit something that I think is exceptional about tech. I'm not a tech exceptionist broadly, but I'm an exceptionalist about this, which is that every program in your computer that is adverse to your interests can be neutralized with a program that is beneficial to your interests. And that means that when you create a program that is deliberately bad, you invite new market entrants to make one that's good. If you lock up the printer so it won't take generic ink, you just invite someone to not only get into the generic ink business, but get into the alternative printer firmware business, which eventually could just be the I'm going to sell you your next printer business. But what we've done over 20 plus years is monotonically expand IP law until we've made most forms reverse engineering and modification without manufacturer permission illegal of felony. My friend Jay Freeman calls it felony contempt of business model. And as a result, you don't have to worry about market entry with this incredible slippery dynamic character of technology. And when you unshackle firms from these four forces of discipline, when they don't have to worry about competitors or regulators or their workforce or new market entry through interoperability, the same CEOs go through the same giant switch on the wall on the C-suite marked in shittification and they yank it as hard as they can as they've done every day that they've shown up for work. And instead of being gummed up, it has been lubricated by an inshidogenic policy environment that allows it to go from zero to a hundred with one pole. And that's how we end up where we are today. All right, I want to bring these out of theory, though, Cory, I applaud how well structured that was on the fly. And have you both walk through this with an example that you use in your books? Sure. And Cory, I want to start with you. Walk me through how you see inshidification is having played out on Facebook itself, not all of meta, but Facebook where it started when it was adding value to users in the early days to where you feel it has gone now. Tell me your Facebook story. So Facebook, really, it's Big Bang is 2006. That's when they open the platform to anyone, not just people with a.edu address from an American college. And Mark Zuckerberg needs to attract users. And his problem is that they're all using a platform called MySpace. So he pitches those users and he says, look, I know you enjoy hanging out with your friend on MySpace, but nobody should want to use a surveillance driven social media platform. Come to Facebook and we'll never spy on you. We'll just show you the things that you asked to see. So that's stage one, but part of stage one, remember is that there's a lock-in. It's just the collective action problem, right? You love your friends, but they're a pain in the ass. And if the six people in your group chat can't agree on what bar to go to this Friday, you're never going to agree on when it's time to leave Facebook or where to go next, especially if some of you are there because that's where the people with the same rear diseases you were hanging out. And if some of you are there because that's where the people in the country you immigrated from are hanging out. And some of you are there because that's where your customers or your audiences or just that's how you organize the carpool for the kids a little leak. And so we are locked in. And so that ushers in stage two, making things worse for end users to make things better for business customers. So think about advertisers. Advertisers are told, you know, do you remember we told these rubs that we weren't going to spy on them? Obviously, that was a lie. We spy on the from asshole to appetite. Give us pennies and we will target ads to them with exquisite fidelity. So the advertisers palin, publishers palin to they become locked to the platform. They become very dependent on it. And in stage three, advertisers find that ad prices have gone way up. Ad targeting fidelity has fallen through the floor. Ad fraud has exploded to levels that are almost incomprehensible. Publishers famously now have to put their whole article there, not just an excerpt and woebitide the publisher that has a link back to their website because Facebook's downranking off platform links is potentially malicious. And so they don't have any way to monetize that except through Facebook's own system. And we've got a feed that's been, you know, basically denuded of the things we've asked to see. It has the minimum calculated to keep us there. And this equilibrium is what Facebook wants, but it's very brittle because the difference between I hate Facebook and I can't seem to stop coming here and I hate Facebook and I never coming back. It can be disrupted by something as simple as a live stream mass shooting. And then users map both for the exits. The street gets nervous. The stock price starts to wobble. The founders panic, although being technical people, they call it pivoting. And, you know, one day Mark Zuckerberg like arises from his sarcophagus and says, "Hearken unto me, brothers and sisters, for I've had a vision. I know I told you that the future would consist of arguing with your most racist uncle using this primitive text interface that I invented so I could non-consensually rate the fuck ability of Harvard undergraduates, but actually I'm going to transform you and everyone you love into a likeless, sexless, low polygon, heavily surveilled cartoon character so that I can imprison you in a virtual world I stole from a 25 year old comedic dystopian cyberpunk novel that I call the metaverse. And that's the final stage. That's the giant palace shit." Corey, you got a good rant there, my man. I give you a real talk. I could be a rapper if he decided to get into that line of business. The world is crying out for a middle-aged technology critic, rapper. All right. Let me ask you at least one question or so. I'm not just too taken in by your charisma, which is to say, I think that the count argument somebody would offer is, I think two things. One is for all the pivots, all the scams, by the way. I mean, I was a publisher during the era of the Facebook fire host to publishers and the era of pivot to video when Facebook videos were getting these astonishing view counts. And one, they kept first all the money. They promised everybody, you know, come get this huge scale. We're giving you all this traffic. You can build a business here. There was no business to build there at any significant scale. And two, it turned out the video view counts were fraudulent. Yeah. And so a huge amount of the news industry, among other things, pivoted to video and it was based on lies. And there was a recent word as a report that Facebook was actually charging advertisers more for these things that they knew were scams. 10% of their ad revenue is ads for scams by their own internal accounting. So I am really not here to defend Facebook as an actor. But the one of the crazy things amidst all of this, I think you really focused on there was moving from showing us what we'd asked to see, to showing us what I would say Facebook wants us to see. There was just the FDC versus meta case. Tim was of course involved in that. And one of the statistics that came out during it is that only 7% of time spent on Instagram is spend on things people you follow are showing you. Similarly on Facebook itself, it's under 20% to 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, 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. I like it less, but the feeling of getting pulled into something is much stronger. And so I think if you had Mark Zuckerberg or risen 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 certification. This 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 were versus engineered Instagram and they made an app called OG app. And the way OG app worked is you give it your login and password. It pretended to be you and logged into Instagram. It 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 a mortal colony organisms we call limited liability corporations and that they are entitled to dignity and moral consideration as beings onto themselves. Those people have to be offering some of the alternatives to find out what they want. But because under modern IP laws, 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 OG. 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. The point I'm making is the example you're giving. They were able to basically say there's 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 they, this is where I want to make sure my producers 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. No, 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 on a plate 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 Sirls 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 app because it's not an open platform is a legal under American copyright law. 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 wholest, bolest 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 other, but in a slightly different way that defends your interests against the firms interests. And 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 pre-viber group that was courted by Facebook in the early 2010s, and they move there and this group is hugely consequential to them because if you have the breast cancer gene, you are deciding whether to have your breast remove, your ovaries removed, the women in your life, your daughters, your sisters, your mothers, their dying or sick and your making care decisions, this 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 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. That is not a good outcome. I'm Judson Jones, I'm a reporter and meteorologist at the New York Times. For about two decades, I've been covering extreme weather, which is getting worse because of climate change, and it's becoming more important to get timely and accurate weather information. That's why we send these customized newsletters, letting you know up to three days in advance about extreme weather that could impact you or place you care about. At the times, you can be confident that everything we publish is based off the most accurate, scientific, and vetted information available to us. Because we want you to be able to make real-time decisions about how to go about your life. This is the kind of work that makes subscribing to the New York Times so valuable, and it's how you can support fact-based independent journalism. So if you'd like to subscribe, go to nytimes.com/subscribe. All 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 becoming 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 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 a big promise, and I think it was an important promise. Back 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, sell what I am. And you know, their basic idea was 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, and it spread into other markets. And they realized a few things. One is that fulfillment would be very important. eBay 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 vested 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, 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 will 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, that whole era that we are talking about. During that period, Amazon's take was below 20%, it depends how you count. But somewhere between 15-20%. They're take of what a small business is selling. Of the sales, 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 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 of companies that were potential threats to them. Diapers.com, for example, it might seem ridiculous. Diapers 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. There was a platform launch to be an alternative to Amazon and their thought was every parent needs diapers delivered quickly. So why don't we make that the beginning? In the same way, Amazon started with books. Then Amazon saw this, thought it was threatening and in the strategy of the day, just bought them. Of course, the founders are pretty happy. Amazon managed, basically, to capture this market. That's when I think it turned to the extraction phase. 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 over 50% or more. Basically, same as brick and mortar businesses. Amazon prices are rarely any lower. They actually have done a lot to try to prevent anyone pricing lower. I think the one thing I would focus on is there what they call advertising, which may be familiar to you as sort of the sponsored results that you get when you're searching. So what's going on there is that sellers are beating against each other, bidding down their own margins to get a higher up in the search of 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 those search results was 56 billion dollars. Yes, 56 billion. It's looking like it's going to be over 70 billion dollars. 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 the best one. What am I looking at there? So 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 best seller or 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. They're grounded in how many different ways you've made your business, 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 Mariam Azucato and Tim O'Reilly, where they calculate that the first result on an Amazon search engine results page on average is 17% 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 and chitified 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 to search for something on Amazon and see rankings weighted by how popular the product is, how high the reviews are, right. I took the waiting of the search as to some degree of signal of quality. Certainly Google, the whole idea was at what comes first in search was built on PageRank and it was going to be quality, Spotify had an algorithmic dimension to it but 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. One reason I ended up on these platforms because I trusted these results and I trust nothing. Yeah, I mean it's going back to the definition of extraction. 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, 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 Coles versus we've moved to extraction and we should see it as a public policy problem. Yeah, I think that's a really great question. There's a kind of question we 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 profits. 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 and maybe many of them get shut down or they acquire 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 new like Google bought, I mean this was actually a fairly big acquisition but Waymo and kind of amazingly 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 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. So how do you think about on the one hand the ways in which, I mean I think it's what Google's made more than a thousand acquisitions over some number of years. How do you think about the ways in which that harm's competition but also 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 wouldn't versus Google to stranded do it itself. I think the antitrust level is one thing but the sort of anti-competitive versus proscale level is like a much bigger challenge to a Silicon Valley now works and I'm curious to hear you talk through the pros and the cons of that. Yeah I think that's a really great question. Joseph Schumpeter back in 1911 wrote a book about entrepreneurs basically and he said you know there's 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 and I think we've erred too far in having all the brains under one roof you know it's starting to remind me of AT&T and 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 groups think he I think when the Justice Department did a deal he sued AT&T tried to break them up and they forced him AT&T to stay out of computing forever and also license all of their patents including the transistor patent and all kinds of people start quitting their jobs and say I'm going to start a semiconductor firm and there lies the origins of US semiconductors and also frankly US computing without AT&T so I think we have done much better with divided technological leadership I frankly think that you know LLM might never have started without open AI 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 LLM specifically you were talking about transistors a minute ago but Google does the fundamental research in transformers and releases it publicly and and and create doesn't do anything with it internally yes that's right that threatens them it's just striking how good of an actor they were for a period on AI specifically yeah treating it like like they had a Bell Labs I agree with that it actually is a lot like Bell Labs and the sense of 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 in 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're 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 and almost everything they made in this millennium failed it either didn't launch or when 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 in operationalized and I'm an ex-ops guy I'm a I'm a recovering siss admin 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 and make them resilient and scale them but the idea that that has to happen under one roof I think is a false binary I mean one of the things Google did arguably far more efficiently than they hired innovators as 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 us 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 and meanwhile I think you mentioned aquahires for people who aren't unfortunate enough to be steeped in the business of Silicon Valley and aquahires when a company is purchased not for the product it makes but because the team who made it approved they can make a product and then they shut down the product and they hire the team and aquahires are I think a leading indicator of pathology in tech and investment an aquahire is basically a post-grad project where venture capitalists sink some money into you pretending that you're going to make a product is 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 finders fee will give them stock but no one's trying to actually capitalize a product or a business I think anytime you see a preponderance of aquahires 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 set Corey we've been talking here about these markets is really having two players in them which is well maybe three we've been talking about users sellers and platforms but something the yearbook focus is quite a bit on is a fourth which we need to talk about two which is labor there are huge numbers of people working for these companies huge number of people delivering Amazon packages and Walmart packages and one thing that they both to be focused on is the way in which as these companies become bigger and more dominant their labor practices can be come 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 at a warehouse and they certainly don't get like free kombucha and massages and a surgeon who frees their eggs so they can work through their fertile years they'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 is relies on blocks and 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 Vena Dubel so legal scholar coined a very important term algorithmic wage discrimination in America hospitals preferentially higher nurses through apps and they do so as contractors so hiring contractors means that you can avoid the unionization of nurses and 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 US 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 and 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 due to 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 and you have to have another army of guys and 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 nurses the poorer they become the lower the wage they're offered and as they accumulate more consumer debt their wages 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 until midnight the night before and skip breakfast this morning so they can make rent this is a thing that makes everyone except one perocule 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 the time that this would be the likely outcome and who did it anyway I think this is getting it something personal here a lot about which is anger over algorithmic pricing of various kinds so when I was walking up to do the podcast today the kairan on CNN was about an investigation finding the instacart was charging many different people many different prices and so the price you're 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 either mark 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 and 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 and this is what economics always want it 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 you know that could rebound the benefit of people who are very poor but it is total an economic terms is always only about producers taking everything from the market I just think it's a very you know just moving away from the the efficiency potentially of it I 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 it 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 the the very modest example of like personal productivity efforts you know it's great to have a to-do list if I really force myself under the scaffolding of a to-do list at all times I I feel like I cease to be a human being and and become a kind of machine always just getting things done and responding to the emails and I think it was important to him 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 and 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 still there's some intuitive feelings like people feel it's unfair people don't like being ripped off people hate paying junk fees the the original word for that by the way it was bullshit fees but there was inside government we felt we had we couldn't have the president say that so yeah I think that gets the heart of the matter I mean you had also talked about you know human attention and 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 mine 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 I 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 and 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 and hiring or in lending all of the stuff starts with an unregulated surveillance sector we have platforms that take our data and then sell it and use it and 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 life to say that we might tell them to stop. I 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 you're firm by 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 and 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 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 I'm a mouthy white middle class guy with a megaphone and when I get angry other people find out about 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 assignments you start with refugee and then you work your way up to kids and then high school kids blue color workers and pink color workers and white color 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 so 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 started 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 and 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 you 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 cash years 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 and if other people want to stand up and say the surveillance of workers eyeballs is great that 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 and machines they've gone from being somebody who did check out with me and asked me how my day was and asked him 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 and 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 I 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 take in 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 you 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 tension markets earlier what is good healthy competition and the tension markets it's like making really great movies new TV shows that people love podcasts that people want to listen to toxic competition was a 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 now 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 and 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 for privacy maybe you know less data there's 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 like tracking you and uploading every kind of information about you that that should be illegal I 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 it might be bad similarly nobody's ever in my view to a first approximation read an iOS terms and conditions update and I've 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 but the consumer in a very rational way does not want to decide so it is 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 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 and 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 prevents surveillance that being the European bill that created all those pop-ups yeah GDPR the European privacy law succeeded you know in creating as 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 over regulated and the little guys have to also go through all this stuff and so yes I think this has been a failure I think for people to start the believing 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 but I mean it like 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 Corey 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 fails 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 the Amazon pretends that it's Irish so that its profits can float in a state of untaxable grace in the Irish Sea and 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 but a few people Johnny Ryan with the Irish Civil Liberties Association Max Shrems with NOYB this none of your business this nonprofit European nonprofit they drag 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 is transcendentally hard to write a good law that bands companies from collecting data on you and 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 what 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 I am not saying that monopolies are good because they make it easier to directly 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 we can do that I want to ask but I want to build on this and ask Tim about it separate but related question Tim mentioned a second ago through 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 how would you think about that and is this a place where we need to be say making value 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 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 and if you do the numbers under the guidelines which the government issues that help 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 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 so they've taken a lot of bets and 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 much vacation 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 so if you had a new version of a white lotus or something or the wire who are going to be bidding for it it's going to be a Netflix and Warner HBO Netflix rather 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 or you look 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 and Schuster and Penguin Random House said in defense of their failed merger those blocked under the Biden administration they said oh well we'll still internally bid against one another within our divisions for the most premium material and that will 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 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 their garden and the gardener has to make judgments and you know the there are some decisions make as a gardener where you don't want blight getting all of your garden and killing everything but others are made for aesthetic reasons and others are made because you want to have native species and not invasive species and they're 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 you can just say if you get over the sign 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 if 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 lean economy others were an exception to this but a sort of effort to describe everything neutrally when sometimes you just don't want to be neutral and how fundamental companies and markets in your economy are 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 you 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 gardener 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 so 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 is being a member of disfavored abused minority who is isolated from your community those people could leave and go somewhere else and it's not that we shouldn't continue to work on hate speech and parallel but if you think that a rule that takes three years to answer a question is going to 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 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 in court why don't we start with you if you were king for a day what are the the three areas or the three policies you can define it the way you want that you think would make the most difference sure one would be getting rid of this anti-circumvention law in America 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 agraved individuals could bring cases when their privacy laws were violated and I guess the third would be an interoperability mandate specifically for social media so 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 center to behind them but I think 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 you know procule interests of incumbents and so on I don't think they're insurmountable and I think that the trade officer 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 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 can I hold you on that one for a minute because yeah sure 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 huge problem what specifically do you mean it's a good question and 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 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 like Sam some toasters instead of like LGE I don't know whoever else is toasters zen zen is zen is something like that so 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 there 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 number 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 due or monopoly I think that's been a really important thing in the US 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 sub buying off their competitors or excluding them so 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 algorithm media giants that 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 and 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 so there is such a thing as healthy attentional competition like making a great movie that keeps the audience in rapture for two hours you know producing a great podcast that is good attentional 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 nibbling 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 I think that is a nice place to end so always our final question what if we books you'd recommend to the audience and Tim why don't we begin with you sure I'd start with EF shoe mockers small as beautiful economics as if people mattered and I say that because it you know targets this question of what kind of world we want to live in and you know I think our efficiency obsession is taking us in one direction I think we should choose a different direction a second book is more recent cast Sunstein wrote a book on manipulation that is underrated and is really good for understanding what we have allowed to happen it'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 as I feel everything is on a cycle and you know every empire has its destiny its golden age it's decline its stagnation and fall and I feel like understanding imperial dynamics is very important understanding the technological empires of our time Cory so my first pick is Sarah win Williams book careless people and it's a great example of the strife and effect that when a company tries to suppress something it brings it interest so win 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 nudge 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 read 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 rod and everywhere you look in the magma 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 kids book by my favorite kids book author ever this guy called Daniel Pinkwater and last year he had a book out from tacky on 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 in the beast story as a kind of savior but who wants no part of it it's funny it's mad cap it's Gonzo it's full of heart it is like everything great about a kids 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, Cory Doctoro and Tim Wu thank you very much thank you thanks this one this episode of the Esoklancho is produced by Annie Galvan fact-checking by Will Peishel our senior audio engineer is Jeff Geld with additional mixing by Almond Soda our executive producer is Claire Gordon the show's production team also includes Marie Cassione, Marina King, Jack McCordock, Kristen Lynn, Emma Kelbeck, Roland Hu, Michelle Harris, and Jan Cople original music by Dan Powell and Pat McCusker audience strategy by Christina Simuluski and Shannon Basta the director of New York Times opinion audio is Annie Roy Strosser special thanks to Natasha Scott