What mainly catches my attention in this article is how it ends seemingly only implicating government for getting too large and not corporations. I like the argument that orgs can get too big and therefore not manage things well, and I feel confused why that would only apply to government and not to other orgs that control many aspects of our lives—e.g., Facebook has more users than any government in the world and access to human communication than most governments.
Not only does facebook have a tremendous size, amount of dysfunction, number of users, and pile of money, they have no responsibility to their users. There is no user representation at any $techco. The future of everything is being architected by closed door committee, free from competing ideas.
For FB, like for other “free” platforms, the end users are not paying customers and are more of a necessary evil. Such a platform only needs to keep the majority of eyeballs by the number.
— It doesn’t really matter if those eyeballs are satisfied or not. There is no transaction taking place.
— Most eyeballs can’t really leave, since service is free and all their friends are here.
— There’s nowhere to leave to anyway, as new companies can’t compete with “free” (unless they are extraordinarily well-funded. As in, by a nation-state).
— If eyeballs complain and make $platform be regulated by the government (forcing some sort of user representation, oversight of habit-forming tech use, etc.), all the better—targeted regulation would lend it the status of a public good, implying approval, solidifying its already almost-monopoly. Meanwhile, business model will find its way as user representatives and lawmakers are lobbied, regulations can’t keep up with the tech, and politics proliferate.
The root problem is that users are tricked into thinking they are customers of a service for which they are not paying. This is at odds with the way the market is supposed to work.
If we take away this trick—the core idea where a platform survives off advertiser money—we might just be able to finally let the market do its job, move towards heterogenous social tech landscape and vote with our wallets rather than being exploited.
This is something I have been thinking about. I don’t like regulation, but imagine a small, surgically focused requirement that says, for example, “you are obligated to provide an API covering the entirety of your platform’s GUI features if you serve more than N users”.
As a consequence:
1) fully-featured third-party cross-platform client software allows users to transition across platforms more easily,
2) platforms start bleeding users,
3) platforms start charging for service,
4) platforms become pipes.
There are implications, though:
1) big tech might find ways to pretend to be smaller entities;
2) this does not guarantee that user data privacy is respected, but ideally this creates a scenario in which the user is free to choose a more ethical provider;
3) client app security & ethics will become paramount, client apps will become valuable targets;
4) downgrade to pipes will end of the age of cool Web 2.0 platforms and grand social startups. Unfortunately, I don’t see any other way—this business model is user- (society-?) hostile yet addictive, and there seems no other way around it apart from WeChat-like nationalization which is objectionable for a whole other chunk of reasons.
A pipe is like a mobile provider: it provides an infrastructure for data to flow, but not necessarily the terminals. Here too, if platforms open up full APIs they’d be liable to become more like pipes for social data to flow through, to be displayed by third-party client of user’s choice. They can still offer a GUI and develop new features, it just has to be covered by an API. It’s an interesting thought experiment.
It sounds nice in theory, but in practice I suspect such a regulation would at best accomplish nothing and at worst would be a disaster. How do you even define a "social network?" The regulation would either be too broad and wind up covering the comments section of HN, or too narrow and easy to evade. In all likelihood the outcome would be similar to GDPR -- the big companies that inspire it would have little difficulty with compliance while startups would find it that much harder to compete.
> The regulation would either be too broad and wind up covering the comments section of HN
HN is clearly a social network. What I envisage is a regulation that applies to social networking and user-generated content sites with greater than a certain number of users, e.g. 1 million.
Obviously there shouldn't be onerous regulation on small sites.
Ben Thompson @ Stratechery does the most in depth analyses of regulating companies like FB, which I think reach similar conclusions for different reasons, such as it's actually in the users' best interest in some ways.
> There is no user representation at any $techco. The future of everything is being architected by closed door committee, free from competing ideas.
"User representation" sounds nice, but I wonder how that would work in practice. After all, there is "citizen representation" in modern democratic governments but most decisions are being architected by closed door committees free from competing ideas as well.
One of the examples that comes to mind is the battle of activists with ICE. ICE is a government agency, so activists, being citizens, at least in theory have a say in how it is run. Instead, one of their main tactics is shaming private companies for cooperating with ICE, which is kind of backwards if you take the idea of "citizen representation" at face value.
I've started to experiment with looking at these large social media/communication orgs less as companies and more as countries/nation-states, and when I do, the metaphor illuminates a lot for me. E.g., FB gives its citizens free services as long as it can watch (almost) everything people do and put up advertisements (almost) everywhere. And if someone breaks the laws, the Supreme Court, appointed by the President, interprets those laws. If citizens don't like the laws, they can move to another country. And lastly, if citizens don't like the President, well, there's not much they can do, besides again, maybe move to another country.
> Should some kind of democratic process apply to such organisations?
I've wondered what would be some effective ways to add more user voice in the ownership and governance process of these platforms. Do you have any ideas?
It's a dictatorship, but nonetheless, FB is not an actual country so the "move to another country" part isn't that hard to do. It becomes a problem when you don't agree with something of the country but everyone else does, so choosing to leave does alienate you from those who stayed. Basically, FB's killer product is the other users, not the actual features of FB (although they're necessary for the collective to not leave en-mass).
> Basically, FB's killer product is the other users not the actual features of FB (although they're necessary for the collective to not leave en-mass)
I agree. I think one of the hardest things for most people when moving from one actual country to another is leaving behind the people and has been the hardest thing for me when I've decided to delete FB or stop visiting certain internet communities.
While there are many definitions of a state, I just learned that Max Weber defines it as "a human community that (successfully) claims the monopoly of the legitimate use of physical force within a given territory" [0]. This makes me think more about what a state would look like if it were a human community organized around a digital territory and what that means for the future (and present).
>I've wondered what would be some effective ways to add more user voice in the ownership and governance process of these platforms. Do you have any ideas?
The obvious answer would seem to be structure them as cooperatives.
Allow service users to purchase shares at a nominal value, and restrict voting rights to one member one vote - that is, shareholder votes are not weighted based on how many shares one has, owning more shares would only enable one to earn more interest on the shares' capital.
Alternatively, all shares (or maybe just 50%+1) could be held in trust for the benefit of the users. Trustees would then have responsibility of taking users' needs in to account.
I like both of these suggestions! While I've read a bit about cooperatives and digital ones, I haven't heard too much about the trustee idea. Do you have links to either where I could learn more about how they might work in with digital platforms?
I think the best example (although it's not a digital platform, and the ownership is for the benefit of employees rather than customers) I know of would be the John Lewis Partnership in the UK.
It's incorporated as a public limited company, but all of its shares are owned in trust.
They're also working on creating a New World Order™ so you can't easily move to another country, which, by the way, is a terribly underestimated and underused ability at the moment.
As the EU, a supranational government, strengthened in Europe, it actually made it easier to move to another country. Perhaps if the EU became more and more controlling of its member nations, then it wouldn't feel as if one were moving from another country, because each place would be quite similar in law, I don't agree that supranational governance would necessarily make it more difficult to move to another country.
Also, I think it might be underused right now because it's probably really hard for most people around the world to move to another country for various reasons: financial, social, linguistic, legal, etc.
I agree that moving countries can help people, I think it is currently a huge task for most and ironically, believe that better relationships between countries and an overarching form of governance may make it easier to do.
Ostensibly we can vote to make them behave however we want domestically, as long as our government isn't captured. But even ignoring regulatory capture, multinationals are hard to hold to account by any single government. I've seen people saying that where we went wrong was letting any economic entity get bigger than the [democratic] government regulating it. However, that admission (true or not) doesn't present us with any obvious solution.
Yeah, I often see this as a challenge that most governments are based on physical space, and don't seem to know how to regulate digital space. For example, typing on this thread, I could be interacting with all people from the US like me, or people from maybe 20 different countries, all with different geographical law. Yet, we're all in this same digital space at the same time.
I'm curious how governance (not just government, but even governance of orgs and other platforms) adapts to a world that more and more abstracts away physical space.
Exactly, it's often the "either you like our platform or you leave" attitude, which, as the platform covers more and more of one's life, and gains larger network effects, becomes pretty hard. The switching costs can be huge and so people often stay with very little say over how the platform is governed.
I am forced to pay the government money every time I earn income, buy anything, wish to start a business, hire someone, or just exist as annually I have to file a tax return. Failure to do any of these things results in violence - the seizure of my property and / or my freedom forcibly taken away and my body put in prison.
Facebook may have business relationships with other private entities I use, and as a side effect receive some of my information, but Facebook is nothing like the government.
I'm not saying they are equal in power over one's life. I do believe that most governments have more influence over one's life, whether national, regional, local, or other levels.
I also think most governments haven't regulated online interaction very much, for better or worse. Which means most online interaction is moderated/regulated/controlled by the platforms that host them. Yes, Facebook won't throw me in physical jail, however they could suspend or even ban my account. If I don't use it, not such a big deal. If it's the only way I communicate with 90% of the friends in my life and I run my business on there, it could be a huge detriment. They could even just tweak the algorithm of posting, without me knowing, and all of a sudden, my friends and family aren't receiving the messages I'm sending, without me knowing. Not just Facebook, but Amazon, Google, Visa, Stripe, Paypal, and many other platforms have huge power over our digital lives.
Is getting banned from Twitter the same as getting thrown in physical jail? Personally, in most cases, I don't think so. However, I still think these platforms can have a lot of power over one's life.
You're the customer. If you don't like the service they provide, you can choose to spend your money/attention elsewhere. There's no more powerful representation than that
There's much more powerful representation than that. Actually having representation in the decision making process. The most powerful, I'd argue, is being able to make the decisions of the platform.
Leaving seems like almost zero representation to me. Now, it doesn't mean zero freedom, yes, people have freedom to leave. I just don't see that as representation.
I love this question and admittedly, it took my breath away, almost speechless that I could be a part of FB, instead of being given whatever management wants to give me.
Honestly, I'm not sure how it would look. I imagine it might feel different. I imagine I might feel a little more hopeful, instead of so helpless. A little more calm, less filled with dread. I imagine I might feel a little more relaxed, believing I have some say in a safety valve to keep the platform going, in case some leader takes it in a direction that most of us don't want.
I don't know if I'd even want direct democracy, where we users vote on feature prioritization and other nitty-gritty details, I may like some type of representative democracy.
I don't know. It may not look different but maybe it would feel different. Does that make any sense?
I'm pretty sure Stockholm Syndrome is when one falls in love with their hostage taker, which sounds pretty different than me feeling distance or animosity towards Facebook. Fair point in that it may not be so healthy for me to stay, although leaving also has its strong downsides, which may contribute to this feeling of helplessness, and yet I'm almost certain it's not Stockholm syndrome.
Yeah, that's the same as how if I don't like the country I was born in, I can make a raft and take off into the ocean to be a citizen of nothing. It might seem like a hyperbolic analogy, but it's a matter of degrees. Network effects are powerful.
Sometimes I wonder if anyone studied to which extent modern business practices resemble communist practices. Both have multi year plans, closed door high level commities deciding things, sometimes Byzantine politics... The main difference is, it seems, modern business doesn't completely ignore customers. And we now have the tools to make those large, multi year plans work.
- Both of which I discovered via "The People’s Republic of Walmart" by Leigh Phillips and Michal Rozworski
A quote from Simon:
"The economies of modern industrialized society can more appropriately be labeled organizational economies than market economies. Thus, even market-driven capitalist economies need a theory of organizations as much as they need a theory of markets. The attempts of the new institutional economics to explain organizational behavior solely in terms of agency, asymmetric information, transaction costs, opportunism, and other concepts drawn from neo-classical economics ignore key organizational mechanisms like authority, identification, and coordination, and hence are seriously incomplete."
It feels strange how the blog is called overcoming bias and yet the conclusion is heavily biased against governments.
In my opinion the rise in "government intervention" can easily be explained by growing inequality and corporate power.
People blame symptoms instead of causes. Zimbabwe clearly failed because they printed money, they clearly didn't fail because the agricultural reforms destroyed their export industries and made them dependent on food imports, no way.
> It feels strange how the blog is called overcoming bias and yet the conclusion is heavily biased against governments.
I appreciate this point and maybe that also contributed to my confusion at the conclusion which seemed pretty anti-government and inherently neutral or pro-business.
> People blame symptoms instead of causes.
The more I've thought about things over the last 1.5 years of covid and the Trump presidency, etc., I'm starting to think that we just blame people who we think are against us and make up stories and rationale to align with our "they're bad people" narrative. I think this often comes from a deeper, "I felt bad therefore this person made me feel bad therefore they are bad therefore they are the reason everything bad is happening in my life." And, as you mention, can cause us to focus on whichever symptom or belief of causality that aligns with that story, instead of overcoming our bias and trying to see how "good people" may have done "bad things" and "bad people" may have done "good things."
Also, I appreciate your points about the Zimbabwean economy and hyper-inflation, I have a 10 trillion Zim note somewhere in my house and remember taking a class on the agricultural policies of Zim at that time.
Because corporations are generally subject to competitive pressure, those that get so large they can no longer effectively function will go out of business. Government entities are in most cases legal monopolies and can continue to exist long after they become ineffective. See https://en.wikipedia.org/wiki/Creative_destruction
Exactly. I agree there are more competitive pressures for smaller orgs. Once some get really big, they can still face competitive pressure from smaller upstarts, that has happened many times. They can fold from being too big and not focused enough. They can fold from trying to stitch together too many cultures and have infighting that brings them down.
They can also start to buy other smaller orgs to relieve competitive pressure. They can also create lock-in policies to make it very painful for people to leave. They can also spend money on political advertising to play on people's fears that certain individuals or orgs are out to get them.
Government can also do this. I guess sometimes I just get confused why people seem to fear one and not both.
The VC industry is intentionally overfeeding its startups to obtain monopolies. Returns on investment are so low the most attractive investment is a monopoly.
These things are like watching waves at the beach. You take a snapshot and show it to people and few will be able to say whether the wave is coming in or going out. Everyone will have an opinion one way or the other though. Thing to remember is, we are looking at dynamic ever changing system but discuss it in static snapshots. Thats always a source of confusion.
Whats important about any centralization-decdntralization debate is that its a Tradeoff, ALWAYS a tradeoff, between Convenience and Freedom (See Tim Wu's book Master Switch for more). No one side ever wins because both have value in different situations.
Look at covid as an example. Each govt comes out with its own vaccination, quarantine, treatment rules. This makes sense because they each have different capacities and resources. Singapore and Germany can do thing that Vietnam and Kenya cant.
Now if my job involves moving silicon chips and their raw materials through 8 countries every day, all of a sudden my work load has jumped 8x cuz I have to follow 8 different sets of rules. I say screw that shit cuz my salary isnt jumping by 8x. Next thing you know factories are shutting down and people are being let go. If you have built up enough clout over the years, you can pull different govt officials into a room and say lets solve this, and what then emerges is more standardized rules. You could say that has centralized things that were decentralized. But thats not the point cuz tomorrow you know the Germans, who strictly follow the standards, realize they can be improved but why wait around for agreement from everyone, lets add the new ones and you can see how the cycle restarts.
> one thing i thought it did a good job of was pointing out both corporations and governments suffer from the ills of consolidation
Seriously? I saw nothing in the article to argue why consolidation would yield to such ills, it kind of just assumed it.
Felt mostly like the article said: "why don't most firm consolidate? Well, maybe because it wouldn't end up so good? Maybe because the leader would fail to manage all of it properly?"
I don't know, the whole thing was so thin on actual analysis, data, examples, annectodes, logic, etc.
I felt it relied exclusively on the hope that you already are biased towards its conclusion to actually make its point.
For example, it could have at the very least brought up very large successful firms that have consolidated? Like most tech giants? Or media corporations? And tried to explain why they have done so?
yes, it did a poor job of plainly spelling out the rationale, but not of putting gov and corp on equal footing here.
(tech) giants might be successful, but the point is that they’re not as successful as they could be if they were loosely federated, more focused, independent companies. firms consolidate beyond the point of maximal economic benefit because of other reasons (at root, for power & status). the (lost) point being that this is suboptimal from a strictly economic perspective (same for overgrown governments).
> but the point is that they’re not as successful as they could be if they were loosely federated, more focused, independent companies
I didn't see that point being made, I only saw it being affirmed without substantiated reasons.
Why do you believe they aren't as successful in their consolidated state as they would be in a seperated state? What data, annectodes, rationale, experiments, experiences, etc. lead you to believe this to be a generalized truth?
> but not of putting gov and corp on equal footing here
Same thing, I saw nothing to justify why whatever may be true of corporations somehow would similarly apply to a different context such as governments.
Why do you believe that what is generally true for a corporate model would be for a government? What data, annectodes, rationale, experiments, experiences, etc. lead you to believe this to be a generalized truth?
And in both cases, are there exceptions to these truths? Are their circumstances that are required for them to hold?
And if you're not going to walk me through the proof, at least make a case for why I should trust your assessment. Who are you and how much time and effort did you spend evaluating this? Did you do so in good faith? What did you do to make sure you challenged your pre-conceptions and didn't fall pray to bias? Did you have other people review your assessment? Were they themselves deep thinkers on the same topics? Do you have skin in the game? Did you test your theories in any way? Etc.
there’s a whole branch of economics on this very subject: theory of the firm[0]. one of the bad parts of the essay was assuming familiarity with this line of economic research.
Oh yes, I think it did well on that, maybe that's why I felt so confused at the end, where the conclusion seemed to warn about government getting too big and not corporations, even tho most of the article seemed to warn about the ills of both.
> The "ills" in the corporate sphere just result in reduced profits/efficiency.
I disagree, as corporations can cause plenty of harm to people, whether physically or emotionally.
> The "ills" of the central planning department of the government getting too large result in gulags.
Yes, governments can have much more power over citizens, as moving from one to another can be much more difficult and the legitimacy to use violence to enforce, I agree. Maybe I just felt confused the original article didn't delve more into that, or maybe it did and I just didn't see the connection and it felt disjointed to me.
You can opt out of Facebook. Opting out of your government is another deal, though. Also, your government control (to a large degree) Facebook and other organization.
Government matter. Facebook is just another corporation.
Most of these large corporations are large because of government interventions.
Articles of incorporation are a legal concept granted by the state. The investment landscape is distorted by gov. interventions in the market. Access to investment capital, regulatory capture, Cantillon effects and other factors favor large corporations over the small.
In a truly decentralized market environment, large players and monopolists would have greater difficulty competing with new entrants.
Yes, I agree that governments have more physical power over most people and can employ physical violence. I do think that corporations can also employ violence, albeit of an emotional, social, or even financial kind, against their users. If someone has a digital store and for some reason, Amazon or Shopify or Visa or Stripe or Paypal kicks them off their platform, that could ruin their business/livelihood/etc., which in turn could lead to suicide or homicide or drug abuse, etc.
Again, I'm not saying losing one's online business is equivalent to being thrown in prison or many of the things governments can do to people, I'm just confused why people seem to be so afraid of the government getting too big and not also at least a little afraid of corporations getting too big.
"I'm just confused why people seem to be so afraid of the government getting too big and not also at least a little afraid of corporations getting too big."
You raise valid points but it remains the case that there isn't close to an equivalence there due to government's monopoly on force. All of the worst atrocities and dystopias, whether they've been inwards-focused (famines, hyperinflation, pogroms - North Korea, Venezuela, Cambodia, etc) or outwards-focused (invasions and genocides - Axis powers in WW2) have been perpetrated by governments. You could argue that these aren't real democracies, but liberal democracies are but a hop, skip and jump away from autocratic dictatorial hell as history has shown repeatedly. We have many modern mini-dystopias engineered by governments today. People are right to be fearful.
I don't think all of the worst atrocities have been directly perpetuated by governments, with the most obvious one coming to mind being the transatlantic slave trade, where many companies facilitated the slave trade and also the slaveholding. Also gangs just came to mind.
I do think that even if companies/non-governmental orgs are causing the violence, that ultimately we often look to government to resolve the conflict and/or to protect us, and if they don't, then it becomes their fault for not doing so.
But again, overall, I'm not saying we shouldn't be afraid of governments wreaking absolute havoc and pain upon millions or billions of people, because, as you mention, "liberal democracies are but a hop, skip and jump away from autocratic dictatorial hell as history has shown repeatedly." Governments have harmed so many humans over the history of our species and I think it makes sense to be fearful they will get too powerful and do that. I just think it also makes sense to be a little afraid that corporations/other orgs will get large enough and powerful enough that they could also do damage to us.
To be clear, I think anarchy would be much worse and that governments are necessary. Evidence from the genetic record shows epochs where almost all men died due to violence, and anthropological evidence shows societies can have extremely high murder rates, approaching 50 percent, without a government in place to interrupt blood feuds.
One thing I'll say about modern gangs, however, is that they're in large part caused by governments. The high murder rate in South America is downstream from puritanical government drug restrictions in North America. Gangs will still exist even without perverted incentives provided by government, it's true, but governments are part of the picture here.
Your point about the slave trade is a good one and it just shows that corporations - and people in general - do need at least a minimalist government to protect individual rights.
I really like that point about how government drug policies in North America lead to gang formation in South America. It seems that government creates and resolves conflict, and sometimes get blamed for doing too much of the former and not enough of the latter.
I guess the more that I've thought about running for office, and more so, actually governing, the more that I've started to see how government can get blamed for so many things, direct and indirect. For example, some company moving overseas and laying off its employees, and people blaming the government because it didn't prohibit the company from making that move and protecting people from that company, more so than being angry at the company. Almost like being more angry at the parent who doesn't protect us from our sibling than the sibling who is hitting us.
Anyways, I appreciate our back and forth, thank you for helping me see things a bit differently.
Y'know fair. I think defense contractors need to be considered separately from most corporations. They are inherently more dangerous than your garden variety corporation.
Though, my understanding is that they are still not allowed to control nuclear weapons, so I'd still put them in sub-government levels of dangerous.
Corporations are gov created entities. So its one and the same, especially after decades of regulatory capture and revolving doors of CEOs and officials. Its the same peoblem.
Small, regional, and niche corporations die. Global conglomerates that are diversified into hundreds of different industries, many of which they have obtained near-absolute monopoly on, don't.
Also, governments die all the time, there was a revolution in Afghanistan like three weeks ago, the new government hasn't even picked its flag yet, are you under a rock?
Because Facebook doesn’t build roads or bridges. They can’t tax me or put me in jail. They’re can’t put migrant children in cages or drone strike weddings. They’re not responsible for making sure our water and air are clean. They can’t ban religions or sexuality. Facebook can’t Brexit. If Facebook fails, life goes on. If my government fails, life is going to suck. A lot.
Facebook can cause a Brexit (see cambridge analytica scandal). FB (and other FAANGs) provide the data to put whistleblowers in jail. They have more money than some countries. They can put a price on your life’s information or tax almost every transaction you make in certain spheres. They can almost completely avoid paying the taxes governments impose on others. They can make you pay every month for life to hear the music of long dead composers and artists.
I agree corporations don’t claim certain rights that governments do at present - the right to kill citizens (sometimes without trial), the right to tax their income (though they do impose transaction taxes). So they are limited at present but not so much as you imply.
Information is powerful and exerts huge control over our lives.
Yes, and that doesn’t mean you can’t also be alarmed over large corporations.
But at the end of the day, even if FAANG help the government do a bad thing, it’s still the government doing a bad thing. Making FAANG the primary focus of our ire enables the government to continue to do those same bad things. And the bad things FAANG can do pale in comparison to what the government can and does do.
Again, it’s not a binary choice. But it’s why some people worry more about the government than large corporations.
When Coca Cola or Bolloré murder people, it's not exactly the government doing it. Sure the government are complicit and close their eyes, but you can't blame everything on the government.
To be clear, i agree it's not a binary choice and considerable amounts of bad things come out of governments too. Or if you like memes, you may enjoy: https://i.imgur.com/CkOr542.jpg
The bad things that corporations do are much more immediate and common.
When a government does something bad, in practice it is often just failing to protect people from corporations. For example, the parent mentioned providing clean air and water; however, the most likely scenario where that doesn't happen is a corporation polluting the environment.
When the government does bad things (or more commonly fails to prevent bad things from happening), the consequences tend to correlate with inequality.
I think it is important not to demonize Facebook too much. I'm no fan of them, but I guess they don't really care about what people read on their feeds, as long as they are glued to their phones and clicking on ads 24/7. Sure, they have tremendous power over the information that people consume, but my guess is that they are quite reluctant to use that power because with this power comes great responsibility and also vulnerability.
On the other hand, others see this power and want to use it. Thus recently we see a lot of "they are a private company, they can do whatever they want" when somebody likes how they handle some situation and "they have become too powerful, they need to be regulated" when somebody doesn't like that. This is a kind of a game where whoever makes facebook do their bidding wins, and facebook itself is reduced to maneuvering between various demands and interests without much agency of their own. That's quite scary as well.
My guess is this will end up with some kind of quasi-censorship regime, "voluntarily" installed by facebook (because, you know, first amendment), so that they can continue to collect their ad dollars unmolested. The beginnings are already there - various fact-checkers etc.
Would you demonise a group that handed out free flamethrowers to everyone who walked past? They don't really care what people do with those flamethrowers, they just make them available. Maybe they have ads plastered on them so the more people carrying those attention grabbing flamethrowers the better.
It's basically the same argument that the people making tools available have no responsibility for what users do with them (which is BS). The tools of misinformation are out there and being widely used and Facebook made them available. It's important that they take responsibility for that.
"can" as "power" != "can" as "legitimacy". Very roughly speaking: FAANGS have power, states have legitimacy. Hence the clash with us, entangled in between but also in position to do sth about it (should we be aware of these dynamics).
I absolutely agree with everything your comment, although I wrote the one you replied to. Hence the "very roughly speaking". The mutability is precisely where some freedom for adjustment is.
To be fair, that's the only pro-users decision Apple made in the past two decades. It has led us to new problems with web specifications and JS engines becoming too large and centralized, but at the very least we've got source code and the RCEs are less obvious to find than they were with Flash.
Also, technically Adobe killed Flash, not Apple. Adobe could have liberated the technology at any point to address Apple's issue, or continued without iOS support. Adobe decided to pull the plug because they're a greedy evil corporation like any other and don't care that people depend on things or create cool stuff with those tools.
I guess I was not saying we should be equally afraid of corporations getting too centralized as we are of governments, I was just confused that it seemed to conclude with that we should only be afraid of governments getting too large. Large internet corporations can wreak havoc on one's digital life. Is that as bad as getting physically put in a cage or struck by a drone? I'd argue no. Can it still be deeply harmful to individuals? I'd argue yes.
Maybe I misread the ending of the article and that the author meant that we should worry about the centralization of any org, and more so about the centralization of government orgs.
> Maybe I misread the ending of the article and that the author meant that we should worry about the centralization of any org, and more so about the centralization of government orgs.
> These patterns, if true, are seem important regarding the ideal scales of both business and government. And I fear the U.S. public is insufficiently aware of them, as we seem to be on the verge of a historic increase in the scale and depth of government management of society.
Maybe what hit me harder was the last line and the presumption that 1) it is a historic increase in the scale and depth of government management of society and 2) that we are also not seeing a large amount of corporate centralization. Maybe I perceive more corporate centralization than government centralization, as platforms have hundreds of millions or billions of users across 100+ countries, and I recall my 2005 political science class talking about the rising influence of multinational companies over nation-state governments.
We are not on the verge of greater government control on every aspect of our life. Since cars and helicopters became a thing, all "modern" governments have acquired unprecedented powers.
Previously, governments had an area of influence of roughly a few days travel from their centers of power: their area of influence was as large as their army's capacity to crush dissent. It's a "new" development in the history of humanity that you cannot be safe anywhere on earth: even in a remote forest/mountain, the government can come and massacre your community very quickly.
(In most countries, they'll most likely just tear down your houses [0] and imprison you, because that's less likely to cause popular uproar)
[0] Even a pretend democracy like France has strong regulations mandating to break people's homes. And french police/préfets are very involved in persecuting ethnic minorities (eg. Rroma people) and other "light housing" folks.
But what if it is so big that there are no competitors and thus everyone has to use Facebook for social networking. Then you are stuck. It's not like cigarette , alcohol, fast food, tv, or car companies, in which there are tons of brands or alternatives.
There being only one tobacco company wouldn’t meant that smoking is good for you. Social media requiring you to use Facebook may just mean that social media is a cancer.
The issue is that smoking is more or less an end in itself, as opposed to social media which is a... medium. You don't "social media", you use social media to communicate, which is the actual end. And that's where things can go wrong.
A while ago there was a thread here on HN about how WhatsApp had got quite big in Brazil. The particular thing I remember was that apparently, in some school districts, you'd have to be on WhatsApp to get information about your kids' school. If not mistaken, this was at the time when the new privacy policy was being rolled out, with threats of being cut off from the service if you didn't accept it.
The school can only communicate via so many platforms, and they're likely to choose the biggest ones in their area. So when you're banned, or for some other reason can't or won't go on them, then it's a problem.
Of course, the bigger point is that maybe this kind of services shouldn't transit only through social media but should be available in an open way, but I won't hold my breath, at least for the time being.
> All of human history before Y2K would suggest otherwise.
Prior to centralized social networks, there were _many_ tools that have been abandoned since. For instance, you would have smaller internet boards dedicated to a specific hobby or a geographic area (many of these died out). Before that, you had fanzines, local community congregation points like bars and such. But those either disappeared, or their use changed (e.g. bars as a point to meet existing friends rather than to make new acquaintances).
It is a common pattern for new technologies to displace existing tools, which means that people refusing the new technology usually end up in a worse situation than before the technology appeared.
Socializing isn't something that someone can do as an individual. If the people you want to socialize with communicate using FB then you need to do so as well if you wish to communicate with them.
In addition, socializing is often at least somewhat "competitive". If you are less able to network then you will be at a disadvantage when seeking a job. If you are more difficult to communicate with, then you are likely to be left out of group decisions; even if by accident. If you are advocating a political position, then not having access to the most popular communication platforms is a major handycap.
Sure, you just won't get as good a job or be able to reproduce as much if you don't pay your taxes. The US Government will also let you avoid taxes by making less money.
> Because Facebook doesn’t build roads or bridges.
Bouygues and Vinci can, siphoning off billions of public money into the pockets of the already insanely rich billionaires of the ruling class.
> They can’t tax me or put me in jail.
Corporations won't collect your taxes themselves, because the State's armed hand is here for that. They have a price tag on everything, and if you don't agree with their unjust rules and prices for basic services (food, electricity), cops will come and seize your belongings.
Many prisons across the globe are operated privately, and it's not unheard of to have private police. Many multinationals employ militias to kick away local inhabitants (to steal their resources/land), and get whistleblowers/activists/journalists murdered.
> They’re can’t put migrant children in cages or drone strike weddings.
Who builds the cages for children? Who benefits from quasi-slave labor due to strong anti-immigration laws? Who profits from selling drones and missiles to the military? Corporations, usually owned by people very close to the government.
> They’re not responsible for making sure our water and air are clean.
Corporations are responsible for polluting our air and water. Facebook, in particular, has enormous data centers just to archive/surveil everyone. Also corporations are sometimes responsible for maintenance of public infrastructure, which to my knowledge they never do well (see Veolia scandals in France for example).
> Facebook can’t Brexit. If Facebook fails, life goes on.
No, but they've got a propaganda apparatus sufficient to convince millions of people to.
> If my government fails, life is going to suck. A lot.
It doesn't have to, and could in fact be a great source of hope! Your government is the reason why life sucks in the first place. They are the people and institutions supposed to represent the people (cough cough) that enabled vampires to bleed the whole population dry in the first place, all the while polluting everything so that future generations won't even have clean water. Abolishing corrupt governments and any form of centralized power, which have shown time and time again to be useless to protect the weak against the powerful, could be the start of something better and more beautiful, an actual democracy without a center and without psychopaths running the show because nobody would hold power over somebody else (the actual definition of a democracy).
According to this article, government shouldn’t be doing those things anyway. So if the government failed and stopped doing all of those things, I guess the world would get better?
In fact, I would generalize more than the article’s thesis: “large organizations considered harmful”.
Any large organization, be it a company or a government or even an NGO, will inevitably lose efficiency as it grows larger, and will lose focus on its original purpose in favor of the purposes of the people with decision making power in the organization.
I find it interesting that people on the left in general tend to believe the worst of corporations and have more confidence in government, and people on the right have the reverse views in general.
In my opinion, both have some potential for tyranny; it’s just a little easier (not much) to deal with recalcitrant corporations, and sometimes you have a choice of corporations to interact with.
> I find it interesting that people on the left in general tend to believe the worst of corporations and have more confidence in government, and people on the right have the reverse views in general.
This is because they're competing coalitions. If you want to build a garbage F-35 for a trillion dollars*, the trillion dollars will come mostly from corporations and capitalists. If you want increased media consolidation and to keep your Hollywood movie studio cartel protected from competition by upstarts, you want regulatory capture and a lot of international treaties to launder your draconian copyright laws through, i.e. less government antitrust enforcement and less government autonomy.
*This is, in actual fact, an underestimate. Somehow.
Both of those things are bad, but the people who want them both want to control the government in order to institute them. The beneficiaries of having the government not do either of those bad things would be the public at large. They're diffuse and unable to effectively organize, so there is no political party representing them.
And notice that I just provided an example of "the right" wanting wasteful central government spending and "the left" acting in the interests of multi-billion dollar corporations. Because they're not principled ideologies, they're heterogeneous opposing political coalitions.
The difference in formula I find interesting. I think either having everyone vote however uninformed or just have a tiny group of stake holders are equally extreme solutions.
I can dream right? Imagine this: Rather than a basic income or a salary in fiat issue some kind of shares to the employees/citizens. You need 100 to get a full vote (50 for half etc) and you get dividend for each share.
If the value of the share declines (as we keep issuing new ones) the amount issued and the amount needed for a full vote are gradually increased and the dividend decreases.
Then, rather than a single vote for someone you also get a single vote against someone so that popularity alone doesn't win elections.
Have a very simple certificate that one must obtain in order to vote that teaches the absolute bare minimum about each candidate.
Finally, lets no do single elections but allow people to change their vote whenever they like with a higher amount of votes required for getting in than for getting out.
Sure. But to circle back to the current discussion: is that more important than clean water or human rights abuses?
It’s not that Facebook can’t do bad things, it’s just that there are reasons why you might be more worried about the government doing bad things and therefore talk about it more (like in the article).
Facebook can totally manipulate people into voting for politicians who can do any number of the things you mentioned. If that fails, we can also assume it has enough private information to blackmail people in positions of power.
What's the point? New power structures would arise immediately after. Let's abolish Facebook instead. Google too. And every other surveillance capitalist. They have too much power, too much data on people.
Like with most of the posts on OB, this post makes a litany of confusing and incorrect assumptions:
* That the forces present in the US's current agricultural system are not government-driven;
* That the government and corporations are entities of a kind, and centralization in one can be used as a parable against the other without any further contextualization;
* That we don't have ample, concrete evidence of the exact opposite outcomes predicted (i.e., developed, social democratic states that exercise central control over the food chain to the direct benefit of quality, safety, and public health).
When you don't have a good argument, it is best to stick with hypothetical situations. As soon as you move from straw men like "imagine three firms" to reality -- let's say, any F500 company -- it's too obvious that your hypothesis cannot be taken seriously.
I don't understand why anyone would want a weak central government. Who's going to be there to bail out corporations during the next crisis?
I expected more from the article, it discusses an interesting question, but then it goes in a very light and superficial hypothetical analysis without much substance, too bad.
All my comment implies is that I wish to read such deep analysis, and unfortunately the article didn't provide one. I'm hoping other people can reply with links to much better literature on the topic of consolidation versus seperation in business and politics.
But they do. Most industries/sectors trend toward consolidation. Specific examples that come to mind are radio, agriculture, banking, and tech. I did a quick search and found [0], which describes a general tendency toward consolidation as industries mature.
One major reason for consolidation (ignored by the author) is economies of scale: as volume increases, the cost per unit decreases.
On the other side, the author ignores benefits of central control for some things. For example, private railroad companies used to have different gauges for their railroads in order to protect their routes, but that led to unnecessary inefficiencies.
Also, governments have a different mandate than the private sector. Governments are charged with pursuing citizens' values (freedom, equality, security, etc.), but for private sector companies, their goals boil down down maximizing profit.
This reminded me of the discussion about how "mature" companies often struggle to innovate. The thought was that as companies mature, they tend to get larger and that size forces them to focus more on "maintenance" than innovation. So the way they "innovate" is by acquiring smaller companies (who are still in the innovation phase), resulting in eventual consolidation until a major disrupting event.
I found the article odd. The stats of how many people work for companies greater than 250 can be accounted for without claiming companies get weaker as they bigger. Why do almost half of the population work for small companies then? Because that is how companies start. You don't create a new company with over 250 employees overnight. So your looking at a flow: companies start small and then grow, either by hiring more people or by getting swallowed up by a larger company. So if it's a flow then we should see huge megacorps periodically die? Well, a lot of company deaths are at the small end, where there is churn. Plus the system as a whole is growing - there is more money and "stuff" coming into existence every day. IBM still exists. The reason we don't have a ministry of food is not because such a ministry would be unstable as an organization (which seems to be the connection...). In fact such a ministry might be scarily stable, and produce food at a very low cost (efficiently). The reason we dont want a ministry of food is not related to efficiency or cost. Seems like the author just wanted to take a stab at the government. What's the takeaway here? We should have the water distribution system managed by thousands of tiny botique companies? City states with their own laws?
Countries that tend towards people in larger corps tend to be much richer. You need economies of scale to do a lot of things, and to compete effectively.
There's a lot of profits in making cars, but Canada, Switzerland, Finland etc. even if they are relatively advanced countries, don't make cars. It's technically feasible, but really hard especially due to necessary scale and specialization.
He makes a lot of proclamations about what would happen, but doesn't really back up his assertions. It's just a jumble of the usual drivel about "big government bad" restated as a priori facts.
It's why humanity moved away from monarchies and dictatorships to democracies and republics centuries ago; power corrupts. I think the author was hoping that it'd be common knowledge, but unfortunately it doesn't seem to be any more.
even as i nod along about the many ills of consolidation, i found the narrative not well-formed. it starts with a principle-agent type problem, and glides into a coordination type problem and lands somewhere around locus of control. these are all well-known/studied issues in management (and taught in mba programs). a little more structure and explicit elucidation of these issues would have made it better.
i do heartily agree with the concluding paragraph that the general public seems largely unaware of these issues, to our collective detriment.
For some reason my priors for Robin Hansen have been to anticipate intelligent, nuanced, insightful argument. And in practice every piece is the worst academic abstract banality that is also so plainly blind to what is going on in reality.
Something like the NHS in the UK seems like a counterexample to this article's theory. A very large, extremely centralised state owned healthcare system, yet "health outcomes" seems perfectly in line with that of the intensely more expensive decentralised and privatised US system.
And even in the recent pandemic, it was the NHS that discovered treatments like dexamethasone and tocilizumab thanks to an innovative and large scale A/B testing system that is much more difficult to set up in decentralised systems.
This might be the sloppiest take I've ever seen on this topic.
- "In fact firms do not do this." — In fact firms merge all the time.
- "The typical scale of most firms seems far smaller than can be explained by these effects." — No reason is given. Italics do not constitute an argument.
- "It seems obvious to me that by now such a food agency would have intervened in food production, processing, and distribution far more extensively that has been the actual case in our actual history." — Not at all obvious, and again no evidence or even any argument is given.
- "The amazing thing is that all this would happen even with high quality oversight and accountability by agencies to politicians, and politicians to voters." — The amazing thing is that the author thinks he can state this prediction without basis of any sort.
There are good reasons to beware centralization, but this piece is simply lazy.
This gets an F. Show your work.
The article talks about "concentration" not "centralisation". These are very different things. For example, a large organisation can be decentralised. This is not nitpicking, you can't think properly about stuff if you're using the wrong terminology.
Centralization also reduces redundancy which is essential to system reliability - a centralized system always ends up less reliable because there's more chance of single-point failure that cascades to all parts of the system quickly. This is especially true if "scale-free" features like "preferential attachment" exist.
Consolidation of any type of thing (e.g. Wall Street and financial systems) can become very fragile and many of the guards against failure (risk models) cease to be valid the moment you have preferential attachment.
The key to governance is and always will be feedback. The human body is a great analog - millions of nerve endings, each of which can change the behavior of the whole system if it signals pain badly or persistently enough. Any system that provides low latency end points to its customers is preferred by customers - and small entrepreneurs and people highly invested in providing good service are the best end points so far. The larger the entity, the more layers need to be pushed between endings and decision maker, the higher the signal you need to emit to get heard.
From an economic standpoint There are a bunch of downward pressure on corporate size:
Capitalism doesn’t like companies that are too mangled with inefficient divisions - investors have portfolio goals and they can’t use a company in their portfolio that doesn’t signal like it’s industry. The more merged a company is, the more likely some divisions are to carry other divisions instead of returning money to stakeholders, the less attractive it becomes, the more likely their focused competitors are to get the big retirement fund allocation instead.
Historically, Corporate Managers love few things more than more people under them, and lots of cash for toys on the budget. So in the 80s you had fat corporations with lots of cash at hand and private jetting. That triggered massive PE and leveraged buyout activity. Now companies know better than to stay cash ladden, because activist investors are hunting for fat corporations to LBO, especially with low interest rates out there. By this point, however, the fat is mostly gone.
Centralization only helps with utilities, which is why if monopolies become too central to life in a country, they risk turning into one and then having profits capped.
Feedback on quality is and always will be king and any giant is vulnerable to nimble and responsive competitors of higher quality.
It's interesting to read how tech people talk about industry in novel ways, but a lot of this material is well studied.
A) The word 'centralization' is consistently misapplied by the tech crowd, in almost all cases, the term is 'monopoly' (or oligarchy or monopsony) and these are well understood and studied concepts in economics.
B) The term 'Economies of Scale' is what he's inadvertently alluding to, but he's missing where most of the advantage of it comes from. Yes 'redundancy' is one artifact, but there are two bigger issues 1) specialization and 2) market power. When you're really big, you can start to afford to hire people to do things that competitors cannot, that might give you a big advantage. Most of real R&D falls into this category. So many applied 'AI' things are coming out of R&D divisions of big companies. 'Market Power' is a more abstract concept, but when you're large, you can make much stronger demands. Mondelez, P&G are big enough that they can plow through many competitors with all sorts of tactics: they get better prices and displays in-store, they have much bigger marketing budgets, they can sell at a loss in one corner to stifle a competitor, they can lean on buyers and distributors (i.e. buy them and you don't get our product) etc..You can think of Mondelez and P&G as 'owning' production and distribution. Apple is a 'Monopsony' for certain parts, and it has incredible leverage over it's supply chain and reaps most of the surplus profits from innovation in those supplying it.
C) Many firms simply do not benefit from economies of scale i.e. roofers, carpenters, most kinds of law etc. but most do, however, the US has relatively speaking, much more people employed in 'big companies' that not - and that's what makes it rich. In fact this is a defining feature of 'Rich Europe' aka Germany, UK, Netherlands vs. 'Less Rich Europe' aka Poland, Spain: 'Rich Europe' has many more people in mid to larger companies. In many industries, you have to be at a certain scale to compete effectively.
We generally don't like monopoly because the investors will tend to sit on an industry and extract rent as opposed to doing anything risky and actively block others from participating.
I am not sure whom you mean, when you talk about "tech people”, but just in case you’re not aware: The author of the blog post is Robin Hanson, an associate professor of economics.
I largely agree with the author, but they left out something important: arguably the most important thing that large corporations do to protect their interests is co-opting the government with campaign contributions, promises of future lucrative private sector employment, etc. Combined with control of the news media to divert attention, huge corporations have superpowers compared to small businesses and individuals.
The main concern seems to be that a centralised entity (corporate or government) can be flawed in its decision-making and/or execution. This is to the detriment of us all.
What’s the solution here? Decentralisation doesn’t seem to compete well with centralised alternatives. Perhaps this will change with the latest wave of pro-decentralisation?
Competition (and capitalism) is not a conscious choice, it is simply what happens when humans are free to choose. Western societies consciously chose individual freedom, and the economic system simply followed directly from that choice.
"Arguably the fact that there is the option to get at least the old profit levels, combined with many new options for making and using synergies across these firms, suggests that such merged firms can in general make more profits than they could separately."
They never considered that you also introduce more risk.
Emergence: When things interact, they often birth new, unpredictable forms. Therefore, the sum total of a system is more than its component parts. As a system evolves, its structure can transform — just like how water becomes cold water until it turns into ice.
It's hard when companies merge and have a new boss; prior CEOs' egos will not let this happen unless something is interesting that can improve the company's current state tremendously.
I was thinking that perhaps carbon in the atmosphere is a form of centralization. An externality of decentralization that causes centralization. And that sequestering carbon would be decentralizing it.
> But this would be achieved in part via more uniformity, standardization, and stability of food processes. Government managed food would end up with less variety and adaptation to individual circumstances and preferences, and this food would improve and innovate less over time.
Why would a public service for food have less diversity and innovation? A public service is operated by individuals, and doesn't have to be centralized or hierarchical.
I agree with the point that reducing competition (by enabling cooperation) can be very efficient. But i strongly disagree it has to lead to centralization and therefore less options. If anything, capitalism leads to less choices because you need big money to even exist in a certain consumer space. There is currently no avenue for "garage innovators" to innovate and spread their products... a public service could (if not operated USSR/USA style) foster cooperation and innovation across the board.
> But even in the absence of much corruption, civil servant selfishness, or partisan rancor, and even with the best political processes that we can imagine, a government managed food industry would still probably end up creating a worse world of food over the long run.
Of course a perfect firm/government will perform better than the free market. That's why firms exist.
Libertarian ideologues tend to have blissfully little knowledge or appreciation of the difficulties of scaling and effective management. Big firms sometimes underperform because scaling human organizations is a fucking hard problem, not because "centralization bad".
Oh yeah, ad hominem against libertarians is all you got. People like you shove their head into shit like pigs and think its a "challenge". Nice story bro.
