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The Problem with Big Tech

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02/12/2019

It’s been a very odd thing to watch as liberals, neocons and even outright communists have repeatedly said something akin to “freedom of speech doesn’t give you a platform” while one conservative and libertarian after another is kicked off various social media sites.

The same people who demanded that ma’ and pa’ Christian bakers who gross a few hundred thousand dollars a year must “bake the cake,” are sticking up for massive, multi-billion-dollar tech firms. Of course, this rampant hypocrisy doesn’t negate their argument. And libertarians are right (and consistent) to say that private firms have the right to discriminate based on political views. That being said, these tech firms wield enormous power, are not as private as many would believe and benefit from a very unique form of corporate welfare.

However, the first thing to note is just how much in government subsidies and exclusive tax breaks these tech giants have received :

  • Amazon: $1 billion (with $2.5 billion more from New York and Virginia to come)
  • Tesla: $3.5 billion
  • Apple: $693 million
  • Google: $766 million
  • Facebook: $333 million

They also spent $50 million on lobbying in 2017 for what that’s worth.

Of course, in a mixed-economy such as ours, virtually every firm receives at least some corporate welfare and shouldn’t be considered part of the government for that reason alone. But the government ties with these big tech firms run much deeper than that, as we’ll discuss shortly. But first, let’s quickly address the rampant bias of Big Tech.

Tech Bias

The bias of these companies has become so obvious that pretty much no one denies it anymore. In fact, many on the authoritarian Left simply cheer it on . While it makes sense to ban those who explicitly call for violence, it was quite telling that not a single one of the many “blue check marks” on Twitter or Facebook who were calling for violence against the Covington high school kids—based on a complete hoax —were banned or even suspended for what they did. On the other hand, Laura Loomer was kicked off for rather innocuous criticism of Ilhan Omar. And the popular Youtuber Sargon of Akkad was kicked off Patreon for using a racial slur in jest to argue against the Alt Right.

Alex Jones was kicked off of Youtube, Spotify, Apple and Facebook on the same day and Twitter a few days later for “hate speech” and “conspiracy theories.” Meanwhile, Leftwing conspiracy nuts like The Palmer Report and Louis Mensch (who claimed Vladimir Putin assassinated Andrew Breitbart to put Steve Bannon in charge of Breitbart.com) are left alone. As is Antifa for the most part. And, of course, no one who pushed the “Iraq has WMD” conspiracy theory has been censored. Neocon Bill Kristol still has his Twitter account and wasn’t suspended for recommending we overthrow the government of China . Instead, they’ve started censoring extremely milquetoast conservative views like those of Dennis Prager .

Twitter has admitted to shadow banning those who engage in the nebulous term “hate speech” and multiple studies (see here and here ) have shown Google’s search results to be heavily biased toward center-Left websites (i.e. The New York Times not CounterPunch). Furthermore, Google’s ability to manipulate search results could have dramatic effects on elections. As Robert Goldstein showed with various experiments ,

Ongoing research I began in January 2013 has shown repeatedly that when one candidate is favored over another in search results, voting preferences among undecided voters shift dramatically—by 20 percent or more overall, and by up to 80 percent in some demographic groups.

And search engine-manipulation is just one of many ways these firms can bias results.

With regards to elections, of course, libertarians (myself included) would be tempted to respond that we’re just choosing which tyrant will rule us. Well, yes. But some tyrants are worse than others. All communists are bad, but Joseph Stalin was worse than Nikita Khrushchev. More importantly though, what works for elections also works for public opinion. The more these tech firms hide libertarian views, the less public interest they’ll garner and the harder it will be to break through. The same could be said for anything outside of neoconservatism and authoritarian Left orthodoxy; be it conservative, nationalistic, classically liberal or genuine leftist views like those of Glenn Greenwald or Caitlin Johnstone.

Just How Private Are They?

So, these firms are enormously biased, but does that matter? The brilliant thing about a free market is that if Lowes doesn’t want my business, I can just go to Home Depot. But while Google, Facebook, Amazon and Apple are ostensibly private companies, they are deeply entrenched with the government. Over and over again we’ve seen them aid the enforcement of thought crimes in Europe (like arresting people for mean tweets ) and Google capitulated to the Chinese government to censor their search results in China.

Google is an interesting case. In fact, they got their start with research grants by the Massive Digital Data Systems project, which was managed for both the CIA and NSA. Jeff Nesbit elaborates ,

The research by Brin and Page under these grants became the heart of Google: people using search functions to find precisely what they wanted inside a very large data set. The intelligence community, however, saw a slightly different benefit in their research: Could the network be organized so efficiently that individual users could be uniquely identified and tracked?

And we’re starting to see that Orwellian scenario play out. As David Samuels explains ,

The speed at which individual-rights-and-privacy-based social arrangements collapse is likely to depend on how fast Big Tech and the American national security apparatus consummate a relationship that has been growing ever closer for the past decade…

…In fact, BIG tech and the surveillance agencies are already partners. According to a 2016 report by Reuters, Yahoo designed custom software to filter its users’ emails and deliver messages that triggered a set of search terms to the NSA.…[and] Google is also actively working with the US intelligence and defense complex to integrate its AI capacities into weapons programs.

Amazon also recently signed a $600 million deal with the CIA to create a system that will “begin servicing all 17 agencies that make up the intelligence community.”

With this amount of cooperation (collusion?) can these firms be considered fully private? We could similarly ask if Raytheon, McDonnel Douglas or other firms who make up the industrial part of the military-industrial-congressional complex and sell predominantly to the government should be considered fully private? As Roderick Long notes about Murray Rothbard’s thoughts on the matter,

Indeed, he would later argue that any nominally private institution that gets more than 50% of its revenue from the government, or is heavily complicit in government crimes, or both, should be considered a government entity.

As these tech firms slowly merge with the surveillance state, we should remember that corporations have effectively been transformed into de facto governments before (albeit always with actual government support); as happened with the British East India Company in India and the Dutch East India Company in Indonesia.

Regulation Impedes Competition

Michael Malice made the point that “All that has to happen is that one person has to say ‘wait a minute, this is becoming a market problem, I’m going to have a workaround.’ And that one guy is going to solve the problem permanently and for everyone.” Unfortunately, the government has made this very difficult. After the competitor to Patreon, SubscribeStar persuaded Sargon of Akkad to move to their platform, it learned the hard way that such platforms are dependent on payment processors. PayPal simply shut off their payment processing and Stripe followed suit.

Normally, this wouldn’t be a problem because they could turn to another competitor. But as is common, the industry has been cartelized by major financial firms who lobby for favorable regulation. The regulatory environment for payment processors has become extremely arduous , which impedes new entrants and massively benefits the current top firms. With regards to building a competitor, Allum Bokhari points out that ,

In order to build a fundraising platform, you need a payments processor. And the market for payments processors is dominated by just two companies: PayPal and Stripe… Can a conservative competitor to Stripe or PayPal be created? Almost certainly not. The regulatory hurdles of setting up a payments processor, the difficulty of forging relationships with major banks, and the complexity of the technology and scarcity of talented programmers with experience in the field mean the operating and start-up costs are high. A payments processor targeted at the niche market of former Patreon users who have since been banned from the platform will not turn a profit.

Indeed, there are competitors to the big firms that have even mustered to break through the “network effects” challenge, such as Minds , MakerSupport , Gab and Bitchute . Yet, these payment processors as well as hosting sites and government regulators have routinely tried to crush them. And their reach is still very limited in large part because of that.

Bill Gates once pointed out that “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.” Little is more effective at stifling competition then such regulation and this dynamic is at play with the payment processing, finance and technology industries. Removing these regulatory hurdles would be a great (and very libertarian) start, but that’s not the only problem with these tech firms.

Publisher or Platform?

While libertarians obviously support cutting taxes, there are conceivable tax cuts that libertarians would oppose. The most obvious would be a tax cut that was really a dressed-up form of corporate welfare and favoritism. For example: cutting taxes on McDonalds while keeping taxes the same for Burger King. Indeed, I didn’t pick those companies at random, as initially McDonald’s was granted a waiver to Obamacare whereas Burger King was not.

It’s for this reason that Stephan Kinsella can make a devastating case against Intellectual Property laws (which Big Tech abuses all the time ), but still acknowledge that because the world we live in is not ideal, IP laws sometimes have to be used. As he put it,

I am a general counsel for a company, and I handle all their legal matters and about five percent of what I do is IP and most of that is acquiring an occasional patent. Our company acquires patents for purely defensive reasons.

In other words, while IP is bad, you have to work within the system as it exists.

The same could be said for the legal definitions of “publisher” and “platform” and whether they should or should not exist in a libertarian society. As of now, the government has split media companies into two broad categories. The first are publishers, such asThe New York Times, The Wall Street Journal and The Mises Institute. The organizations are held liable for what they write. So, if they engage in slander or libel, they can be held legally accountable.

Platforms, on the other hand, are simply companies that allow for others to post their own content on them. These firms supposedly have no editorial control (outside of removing violent or illegal content) and can thereby shirk all responsibility for libel, fraudulent material and the like because they didn’t post that content themselves. Firms in this category include Facebook, Youtube, Twitter, etc.

Walter Block has made the case that libel, slander and defamation fall under the rubric of free speech. Other minarchist libertarians may not agree with that, but it’s aside the point. As we sit now, we have the equivalent of the government allowing some companies to libel others while preventing other companies from doing the same. We have massive tech companies with a terms of service de facto editorial policies that allow Disney producer Jack Morrisey to call for a kid who committed the crime of standing still while smirking to be put “hat first into the woodchipper” and keep his account while standard conservative , libertarian and even antiwar rhetoric is routinely censored.

It’s a different form of government favoritism, one that’s mostly meant to subsidize the ideological convictions of those that control these major tech firms (beliefs which are conveniently shared by most in the government). But despite its oddness, these tech firms are blatantly acting as publishers while retaining the legal protections denied to others and reserved for neutral platforms. And it should be called what it is; corporate welfare.

In the long run, unwinding the regulations that impede genuine, censorship-free competition from arising should be the priority. But in the imperfect world we live in, advocates for laissez-faire should hold these tech companies’ feet to the fire. Platform of publisher? Pick one and act accordingly.

Andrew Syrios is a partner in the real estate investment firm Stewardship Properties. He graduated from the University of Oregon with a degree in Business Administration and a Minor in History.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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