Presidential candidate Elizabeth Warren recently announced her plan to break up the big tech corporations of Silicon Valley, arguing that their increased size was an example of monopolization.
This proposal is just another one in the growing tide of the hipster antitrust movement. We’ve been here before, say the antitrusters. In the early 20th century, near the peak of the Gilded Age, giant monopolies and cartels slowed down the economy and reached record profits. Teddy Roosevelt (a Republican, as the Right seems to love mentioning, even though he was a progressive Republican) rolled up his sleeves and starting waving around his trust-busting stick and broke up the monopolies. We then had decades of unprecedented growth and increases in living standards.
Of all the recent proposals to fix the economy, the hipster anti-trust movement seems to be the one with the most political oomph behind it. The economy is suffering from slow wage growth, shrinking small business starts, and corporate profits stand at an all-time high while innovation seems to have shrunk in most sectors. Tim Wu’s The Curse of Bigness has been popping him over the media sphere, while an influential Yale Law Journal article has been making the rounds, for the case that current “consumer welfare” standards aren’t up to the task of dealing with free services or services with price discrimination like Amazon, which has different prices for each customer.
Unlike remedial technocratic solutions like the “work-centered economy” as displayed by Oren Cass in The Once and Future Worker, or the “Free Market Welfare-State” as designed by Samuel Hammond, both of which falter somewhat by seeming to be concessions by the Right to the Left, Warren’s proposal wins by creating the clear enemy of Big Business. There seems to be a case that in most industries, large corporations have been using their size to gain monopoly profits and rent-seek, rather than gaining profits through the ideal of providing better goods or services to the American public.
That “most industries” part is key. One of the strangest parts about Warren’s proposal was her decision to focus on the tech industry. While there’s some growing bipartisan anger against Facebook (Republicans because of “censoring”, Democrats because of “Russia”), the fact remains that the big Tech companies remain reliably popular in the public’s eye. 63% of all Americans still believe that Big Tech has done more good than bad for society.
Big Tech disproportionately creates the innovation and good wages that drive our economy forwards. While there have been a number of recent public scandals, corporations like Facebook have always apologized and given the impression of reform, rather than (for example) companies like Exxon, which operate much the same after oil spills. In addition, many of Warren’s proposals imply turning Silicon Valley into it’s European counterparts; non-existing. Why should we break up one of our most innovative and productive sectors of our economy? A clearer version of these criticisms can be found in this blog post at truthonthemarket.com.
What Elizabeth Warren’s fascination with Silicon Valley shows is the fraying between two segments of the Democrat coalition: the populist progressive movement and their instinct on attacking wealth, and their billionaire allies, who have only recently shown apprehension at the leftwards shift of the party. There’s no reason that Alexandria Ocasio-Cortez should be on the same side as the party which is disproportionately funded by Silicon Valley and Wall Street, after all.
What I foresee is that this move to break up Big Tech rather than Walmart or General Motors signifies the shift of the constituency of the Democrat party. If the Republican party under Trump stands as anger towards the liberal elite, maybe there’s a space for Elizabeth Warren to join arms with Tucker Carlson. The Democrat party may entrench itself as the party of the upper-middle class technocracy, and attract segments of the former GOP like the NeverTrumpers, the Neocons, and the Libertarians who formerly stood as it’s establishment.
After all, Ted Cruz seems to have a certain new fondness for Elizabeth Warren.