Speaker 1: When was the last time you heard somebody say something
Speaker 1: optimistic about the Internet? All about you? But for me,
Speaker 1: it's been a while, which sucks, because there was a time,
Speaker 1: and I'm talking about the nineties and the two thousands
Speaker 1: and even up into the early twenty tens, when a
Speaker 1: lot of the conversation about the Internet and technology in
Speaker 1: general was really idealistic.
Speaker 2: Basically, what happened to the idea that the Internet was
Speaker 2: this magical network everybody would be able to start their
Speaker 2: own little thing and have pockets of wealth emerged all
Speaker 2: over the country, not to mention make every country into
Speaker 2: a democracy, not to mention make every creative person a star.
Speaker 1: Tim Wu is a legal scholar who writes about monopolies,
Speaker 1: and he is very critical of some of the big
Speaker 1: tech companies like Google and Amazon and Meta, But he
Speaker 1: didn't always feel that way. Back in those early inner days,
Speaker 1: a lot of us really believed that tech was going
Speaker 1: to change the world for the better.
Speaker 2: Actually, at the very late part of that, I was
Speaker 2: working in the Silicon Valley, so I was drinking the kool.
Speaker 3: Aid from the firehose like straight on.
Speaker 2: And before that, I was working in the US government
Speaker 2: at the Supreme Court, my coke clerk. Actually my office
Speaker 2: mate was Ketanji Jackson, who is now the.
Speaker 3: Supreme Court Justice.
Speaker 2: So we were friends, and you know, I got to
Speaker 2: say we were very optimistic, but you know, it didn't
Speaker 2: quite all work out the way we had thought.
Speaker 1: Tim worked in the Biden administration advising on anti trust policies,
Speaker 1: and he's now a law professor at Columbia. His most
Speaker 1: recent project is a quest to understand how the Internet
Speaker 1: went from this utopian vision to something that a lot
Speaker 1: of people blame for everything that's wrong in the world,
Speaker 1: and he wrote a book about it called The Age
Speaker 1: of Extraction. So today's conversation is going to take us
Speaker 1: from Bible versus to rap music, to some Israeli map
Speaker 1: software that you've probably used without even realizing it, to
Speaker 1: that feeling that you get when you smoke way too
Speaker 1: much weed and you can't get up off the couch,
Speaker 1: and hopefully by the end of it, you'll have a
Speaker 1: better idea of what happened to that nineties Internet optimism,
Speaker 1: why it didn't pan out, and maybe some things that
Speaker 1: we could do about it. Right now, I'm afraid Kaleidoscope
Speaker 1: and iHeart podcast this. This is kill Switch I'm Dexter Thomas.
Speaker 1: I'm all right, So, I mean, I think you're talking
Speaker 1: about this kind of stretch from late nineties into the
Speaker 1: early two thousands. I mean, I remember, you know, I'm
Speaker 1: a kid growing up in Sanmadadino, California, but you're not
Speaker 1: familiar with it. It's about an hour east of La
Speaker 1: Nobody really goes there, right, and I'm feeling like, shoot,
Speaker 1: I don't have to leave Sammonddino. Everything I want I
Speaker 1: could find it on the Internet. I could learn to
Speaker 1: do anything. I can connect with anybody. I remember the
Speaker 1: first time I was talking with somebody on aim and
Speaker 1: it was incredible. I can just talk to somebody on
Speaker 1: the other side of the planet for free, you know,
Speaker 1: as long as I pay the dial up bill, right,
Speaker 1: And it seemed like something new was coming out every
Speaker 1: year where I'm going to be able to just do
Speaker 1: things that I never even thought were possible. And there
Speaker 1: was definitely a time where everything felt optimistic, but the
Speaker 1: optimism seemed realistic.
Speaker 3: Yeah it did.
Speaker 2: And you know, even going further back, I grew up
Speaker 2: in a very kind of hippie environment.
Speaker 3: I actually was living in Canada.
Speaker 2: I went to a school where all the grades were
Speaker 2: kind of combined into one. And you know, that was
Speaker 2: its own kind of utopian movement back in the sixties
Speaker 2: and seventies. And I think a lot of us thought
Speaker 2: that the Internet was kind of the instantiation of a
Speaker 2: lot of the ideas from that era. You know, you
Speaker 2: were going to let people connect with each other, and
Speaker 2: as soon as people connected, you know, of course there
Speaker 2: would be peace. Right, all right, all violence and problems
Speaker 2: are misunderstanding.
Speaker 1: All we got to do is just talk to each other.
Speaker 1: Will be good, Yeah, we'll be good.
Speaker 2: I remember a friend of mine said, like, the Internet
Speaker 2: is like Esperanto. Do you know Esperanto the language?
Speaker 3: Yes?
Speaker 1: Oh my gosh, yes, I made the mistake of spending
Speaker 1: about a couple weeks trying to learn Esperanto. Yes, yes,
Speaker 1: but yes, so Esperanto basically the language that the idea was. Listen,
Speaker 1: we need to leave aside all the national languages. We
Speaker 1: create a new language, and that will allow for equality
Speaker 1: because we'll all literally speak the same language, will all
Speaker 1: actually be on the same page. That will lead us
Speaker 1: into this really promising future. And some people really dedicated
Speaker 1: themselves to.
Speaker 3: It entire lives, entire lives.
Speaker 2: And my friend had you know, saw the Internet as Esperanto,
Speaker 2: the successful version, you know, like it had actually eliminated.
Speaker 3: They believed all the.
Speaker 2: Differences between computers and ultimately between us, and you know,
Speaker 2: that was the original idea basically of cyberspace, which was
Speaker 2: like this better world that was the like the Internet,
Speaker 2: no one knows you're a dog era where you're going
Speaker 2: to pretend to be like somebody else, and that would
Speaker 2: be liberating. Maybe I'm just like whoever, I am like
Speaker 2: half Asian dude, but in cyberspace, I don't know, like
Speaker 2: a blue space alien or something.
Speaker 1: Right, and that's a beautiful thing. Yeah right, Okay, Then
Speaker 1: what happened? So as Tim was starting research for his book,
Speaker 1: he looked at Google, not as in he was searching
Speaker 1: up things on the Google search engine. He started looking
Speaker 1: at Google LLC as a source, or at least as
Speaker 1: a symbol of how tech companies went from seemingly visionary
Speaker 1: to obviously exploitative.
Speaker 2: There was Google. It started at a university at Stanford.
Speaker 2: It was originally housed on some random computers. Then it
Speaker 2: was in a garage, so it had all these kind
Speaker 2: of idealistic settings. Their early talk was very idealistic. We
Speaker 2: just want to organize the world's information.
Speaker 3: There was this.
Speaker 2: Idea they had that our main goal is to take
Speaker 2: you where you need to go. We're not going to
Speaker 2: hold on to you. We just want to show you
Speaker 2: the way. Their slogan was don't be evil.
Speaker 3: Yeah.
Speaker 1: I mean I remember being a genuine fan of Google.
Speaker 1: I mean I was like an unplayed employee. Man, Gmail
Speaker 1: came out. I remember having my Gmail invice. You remember
Speaker 1: that where you you They didn't give it to everybody,
Speaker 1: so you had a limited amount of invites. Man, I
Speaker 1: was passing those things out. Every new thing that Google
Speaker 1: came out with. It felt like, I don't want to
Speaker 1: say a utopian future, but it felt like everything was
Speaker 1: going to be interesting and amazing and convenient and helpful.
Speaker 1: I mean, how can you argue against that?
Speaker 3: Yeah? No, I agree, and I shared that feeling.
Speaker 2: I thought there was something very well intentioned about Google,
Speaker 2: the early company. I mean, some of your listeners might
Speaker 2: be like, what are they talking about?
Speaker 1: Who are these Is there something wrong with them?
Speaker 3: Right? But no, I think they're very well intentioned.
Speaker 2: A lot of my friends who were like in another
Speaker 2: era might have gone to work at nonprofits, went to
Speaker 2: go work at Google because.
Speaker 1: They believed in the mission.
Speaker 2: They believed in it, and the early Google, you know,
Speaker 2: didn't have a business model, and then they kind of
Speaker 2: grudgingly took on advertising, but said all the stuff, how,
Speaker 2: we're just gonna be totally different kind of advertising. It's
Speaker 2: gonna be actually stuff you really.
Speaker 3: Want because you're looking for it anyway.
Speaker 2: So it's not gonna be annoying, it's not gonna be cluttery,
Speaker 2: it's not gonna mess with things, you know.
Speaker 3: The founders had.
Speaker 2: Already written a paper where they said that advertising rex search,
Speaker 2: so they were already on record on saying that like
Speaker 2: paid search, where whoever pays most gets the top link,
Speaker 2: is a terrible thing.
Speaker 1: Actually, let's get specific about that paper. It came out
Speaker 1: in nineteen ninety eight and it's titled The Anatomy of
Speaker 1: a large Scale Hypertextual Web Search Engine. And in that paper,
Speaker 1: Sergey Brandon Larry Page, the founders of Google, wrote the
Speaker 1: following quote, the goals of the advertising business model do
Speaker 1: not always correspond to providing quality search to users. And
Speaker 1: later on they say that quote, we expect that advertising
Speaker 1: funded so search engines will be inherently biased towards the
Speaker 1: advertisers and away from the needs of the consumers. End quote. So,
Speaker 1: just to summarize, almost thirty years ago, the founders of
Speaker 1: Google said in public that ads would bias search engines
Speaker 1: and make them worse.
Speaker 3: So what happened.
Speaker 2: So they started making money, and then they made this
Speaker 2: decision in the early two thousands that they were going
Speaker 2: to go public.
Speaker 3: But they had this idea.
Speaker 2: We're going to go public, but we're not going to
Speaker 2: do it like normal.
Speaker 3: We don't want to become evil.
Speaker 2: So they wrote this big, long letter to their shareholders
Speaker 2: and it starts with like, we're.
Speaker 3: Not a normal company. We don't want to be a
Speaker 3: normal company.
Speaker 2: We're going to do all these things that are you're
Speaker 2: going to think are terrible, like crazy projects. We're going
Speaker 2: to care about our users, not our advertisers. Don't be
Speaker 2: evil as our model, on and on and on.
Speaker 1: In that two thousand and four letter, the founders wrote, quote,
Speaker 1: Google is not a conventional company. You do not intend
Speaker 1: to become one.
Speaker 2: But but they still decided to become a regular for
Speaker 2: profit Delaware corporation, which means that they're registered in Delaware,
Speaker 2: which has basically the loosest requirements for a corporation and
Speaker 2: is the standard in corporate America.
Speaker 1: Okay, yeah, standard, that is what conventional companies do. But
Speaker 1: remember Google said they weren't conventional, and as Tim points out,
Speaker 1: it didn't have to go that way.
Speaker 2: They could have maybe done things differently at that point,
Speaker 2: set up something either as a nonprofit if they really
Speaker 2: believe this stuff, they could have been the kind of
Speaker 2: corporation that is not necessarily for profit, what's called a
Speaker 2: B corp, like Pantagonia. But they chose the normal Delaware
Speaker 2: corporate form that every evil corporation in the world has,
Speaker 2: and then you know, over the next ten or fifteen years,
Speaker 2: they proceed to violate it, basically every promise in that letter,
Speaker 2: and right the reason was, I mean, it's so predictable.
Speaker 2: They had pressure to continually increase revenue, and ultimately that
Speaker 2: meant they had, in fact, to treat advertisers better than
Speaker 2: their users. That means they had to have more and
Speaker 2: more and more ads. It means they had to cut
Speaker 2: projects that didn't make sense. I mean, scripture says no
Speaker 2: man can obey two masters, and they believed that they
Speaker 2: were different. I think it's the original sin of Silicon Valley,
Speaker 2: maybe of America, is that we have this belief that
Speaker 2: we can have our cake and eat it too, obey
Speaker 2: the interests of their users and consumers, and also their
Speaker 2: advertisers and also their investors.
Speaker 1: I believe that you're the first person on this show
Speaker 1: to quote the Bible to me. But that's pretty appropriate
Speaker 1: because in some ways, no, for real, it does feel
Speaker 1: like we actually have straight from that light that felt
Speaker 1: really you know, people were truly evangelical about the promises
Speaker 1: of Silicon Valley, the promises of technology, but even specifically
Speaker 1: about companies. I really remember, you know, myself being one
Speaker 1: of them, felt really really optimistic about what Google was
Speaker 1: doing and what Google could do in the future. For
Speaker 1: most of us, though, I feel like they kind of
Speaker 1: fell out of that light for us as a gradual process.
Speaker 1: Most people probably couldn't tell you a time when they
Speaker 1: stopped feeling good about Google. But you have a very
Speaker 1: specific date that you point to in your book that
Speaker 1: you feel like was a specific turning point a day.
Speaker 3: Yes, it's a second.
Speaker 2: The first is the decision become a for profit company.
Speaker 2: The second was June eleventh, twenty thirteen. That's the fall of.
Speaker 3: The early Internet.
Speaker 1: This is where things get interesting for me. The date
Speaker 1: when tim says, the utopian promise of the early Internet
Speaker 1: died forever. We'll get into why after the break. Okay,
Speaker 1: So some background on that date of June eleventh, twenty thirteen.
Speaker 1: So first we actually have to go back to two
Speaker 1: thousand and six to a project made by an Israeli
Speaker 1: programmer called FreeMap Israel. What made this project interesting was
Speaker 1: not only that it was free and it helped you
Speaker 1: with figuring out directions on where you wanted to go,
Speaker 1: but that everything was crowdsourced, even the traffic information, and
Speaker 1: this became its defining feature, and they had the tagline
Speaker 1: out smarting traffic Together. Pretty soon FreeMap Israel had expanded
Speaker 1: globally and had changed their name to something that you
Speaker 1: might recognize, Ways. So Ways got popular pretty quickly because
Speaker 1: of that crowdsourced information. It was genuinely useful. It would
Speaker 1: warn you about an accident nearby or if police were
Speaker 1: up ahead, so you could change your travel route or
Speaker 1: your travels speed accordingly.
Speaker 2: So it was emerging as a challenger to Google Maps.
Speaker 2: And here you had these two kind of I guess
Speaker 2: models of the future. So what happened in twenty thirteen
Speaker 2: in June the contest was.
Speaker 3: About to start.
Speaker 2: It pitted Google, which had a more traditional map program,
Speaker 2: against Ways, which was based on user contributions, and the
Speaker 2: competition was on for the future, and all of a sudden,
Speaker 2: Google just bought Ways.
Speaker 1: At this point in time, on one side, you had
Speaker 1: Google Maps, which said they had a billion users, and
Speaker 1: on the other you had Ways, which was reporting around
Speaker 1: fifty million users. But they were growing and really quickly.
Speaker 1: So Google opened up their wallet, pulled out reportedly about
Speaker 1: a billion dollars, and just bought Ways. They let the
Speaker 1: app itself continue to operate, but some of that really
Speaker 1: valuable data that weays it generated, like that crowdsource traffic information,
Speaker 1: all of that was incorporated up into the new mothership
Speaker 1: of Google Maps.
Speaker 2: They used, you know, frankly, a method pioneered by John Rockefeller,
Speaker 2: which is, if you have problems with the competitor, buy them.
Speaker 2: I remember being pretty shocked that that happened. Now we
Speaker 2: go to the law, which is my particular area of expertise,
Speaker 2: and there is a law called the Clayton Act, you know,
Speaker 2: the anti monopoly law, which says you're not supposed to
Speaker 2: be allowed to merge companies to create a monopoly and
Speaker 2: I think you do not need to be a sophisticated
Speaker 2: economist to say there's two mapping programs, one buys the other,
Speaker 2: that's a monopoly.
Speaker 1: Yeah, pretty cut, dry cut and try.
Speaker 2: So it went to the Federal Trade Commission, which is
Speaker 2: the agency one of the two agencies that tries to
Speaker 2: block illegal mergers, and Federal Trade Commission said, fine, no problem.
Speaker 1: So this is pretty strange. The FDC initially said that
Speaker 1: they were going to look into this acquisition, but a
Speaker 1: couple months later they stopped the investigation and they let
Speaker 1: the purchase go ahead.
Speaker 2: I remember I was had been working there, right, and I
Speaker 2: was like, how did they get to that conclusion? As
Speaker 2: far as I can tell, this looks pretty much like
Speaker 2: a merger of monopoly that that reduced competition. So I
Speaker 2: never I didn't find the answer out to that question
Speaker 2: for many years until one day I was at a
Speaker 2: anti trust party.
Speaker 3: I was hanging out.
Speaker 4: I was trying back up the anti trust party, Like,
Speaker 4: I was, what does the party full invite look like
Speaker 4: for that the anti trust party? We just like pull up,
Speaker 4: we canna talk about anti trust, Like if you like monopolies,
Speaker 4: don't come like what.
Speaker 2: Basically, yeah, okay, it's a thing.
Speaker 1: It's a thing. Invite me next time I'm down. This
Speaker 1: sounds great, you.
Speaker 3: Know, it's like, it's a pretty cool crowd. They're not bad.
Speaker 2: Matt stolers there, Lena Kahn will be there. Like, it's
Speaker 2: a bunch of people. So I was at this party
Speaker 2: and I was having drinks and I realized one of
Speaker 2: the person I was drinking with had worked on that case.
Speaker 2: So it was after a while I was like, so, like, what,
Speaker 2: you know, what went down? How did that happen? And
Speaker 2: she said, well, you know, I know, look kind of bad.
Speaker 2: But the boss said we should let the merger go through.
Speaker 2: And he said, here was his theory that Google is
Speaker 2: what you use when you want to figure out where
Speaker 2: you are, and Ways is what you use when you
Speaker 2: want to figure out where you're going.
Speaker 3: Huh, I'll say it again.
Speaker 2: Google is where you go when you want to figure
Speaker 2: out where you are, and Ways is what you use
Speaker 2: if you want to figure out where you're going.
Speaker 3: So they're not really competing.
Speaker 1: You have just described a map, like the two core
Speaker 1: functions of a map.
Speaker 2: Yeah, so they were not forced to release that reasoning
Speaker 2: to the public, but that's what happened, and the reason
Speaker 2: I pinpoint on that point. I think that point early
Speaker 2: twenty tens is when the Internet really started to turn,
Speaker 2: and it is because the first generation of companies, people
Speaker 2: like Google, started becoming threatening by new guys, not just Ways, Instagram,
Speaker 2: a whole bunch of other companies, and as opposed to
Speaker 2: fighting them, as opposed to competing, they just started buying them.
Speaker 1: We reached out to the FTC for comment on Tim's
Speaker 1: account of this story. As of this recording, we haven't
Speaker 1: heard back. So for a while, this acquisition thing was
Speaker 1: a trend big tech companies would just buy their competition.
Speaker 1: Instagram was starting to become a popular place for people
Speaker 1: to connect online, so Facebook bought them. They also bought WhatsApp.
Speaker 1: Maybe you remember when Zappo's was getting really popular as
Speaker 1: a place to buy shoes online, and then Amazon bought
Speaker 1: them to add to their online shopping empire. They also
Speaker 1: bought Whole Foods. Microsoft picked up LinkedIn and GitHub. The
Speaker 1: next year after getting Ways, Google bought an AI company
Speaker 1: called DeepMind. I could keep going here. Tim worked on
Speaker 1: a study a while back that showed them, between two
Speaker 1: thousand and seven and twenty eighteen, Google and Facebook just betwre.
Speaker 1: The two of them collectively acquired over three hundred and
Speaker 1: fifty companies. The federal government let all those acquisitions go through,
Speaker 1: and that study closes with this line of commentary. As
Speaker 1: with a basketball referee who never calls a foul, the
Speaker 1: question is whether the players have really been faultless, or
Speaker 1: whether the referee is missing something. What might things look
Speaker 1: like if Google had not bought Ways?
Speaker 2: You know, I think that what was lost in that
Speaker 2: acquisition was the chance of a full fledged rival, you know,
Speaker 2: to Google, and another ecosystem, two different, fully functioning ecosystems
Speaker 2: that offered you a real alternative because so much turns
Speaker 2: on maps as sort of a foundation and a good
Speaker 2: search engine, and if you imagine it growing, if you
Speaker 2: imagine it development itself. It also was, as we said,
Speaker 2: this kind of different user based business model, and who
Speaker 2: knows where that would have gone.
Speaker 1: I mean, within the Google War.
Speaker 2: They were supposedly separate, but they were under ultimately the
Speaker 2: command of Google, and ultimately the founders all left and
Speaker 2: expressed extreme disappointment they had ever done this.
Speaker 1: In twenty twenty one, the CEO of Ways from before
Speaker 1: the acquisition left the company. He wrote a blog post
Speaker 1: about why he was leaving, and he also reflected back
Speaker 1: on when he sold to Google back in twenty thirteen,
Speaker 1: and you can tell he regrets it. It almost reads
Speaker 1: is less of a resignation letter than an apology letter
Speaker 1: to society in general. And there's one line that hits
Speaker 1: pretty hard here quote looking back, we could have probably
Speaker 1: grown faster and much more efficiently had we stayed independent, And.
Speaker 3: I think we lost the chance.
Speaker 2: I mean not only through ways, but a million little acquisitions,
Speaker 2: a million different aquihiers of having a truly more decentralized
Speaker 2: economy that was one in which spread a lot more
Speaker 2: wealth to a lot more people. Instead, it has concentrated
Speaker 2: wealth and a very small number of people.
Speaker 1: Acquisitions are just one method of maintaining a monopoly. In
Speaker 1: his book, Tim lays out a bunch of other tactics.
Speaker 1: They're used by tech giants, including Amazon.
Speaker 2: So Amazon Marketplace, I guess fifteen years ago really was
Speaker 2: in some ways carrying out the early dream of the Internet.
Speaker 2: It was making a lot of people rich at the time,
Speaker 2: they charged twenty percent, only twenty percent of fees, and
Speaker 2: then they would ship your products to people, and a
Speaker 2: lot of people started making a lot of money. I
Speaker 2: have in my book stories about like this Indiana barber
Speaker 2: who start selling palmade as a side business and suddenly
Speaker 2: is like making millions of dollars. But then Amazon, once
Speaker 2: it kind of had everybody, It had all the sellers,
Speaker 2: it had the buyers, you know, locked in with Prime
Speaker 2: or whatever, then it just started turning all the knobs.
Speaker 2: They started adding what they called advertising fee for sellers.
Speaker 2: So you know when you search an Amazon on if
Speaker 2: you use Amazon, but you get like, hey, I'm looking
Speaker 2: for slippers, and you get a bunch of sponsored results. Yeah,
Speaker 2: those turned into a huge cash cow for Amazon because
Speaker 2: the sellers bid against each other to get those spots,
Speaker 2: and they don't feel they can sell without them, and
Speaker 2: they started making more and more money. When I released
Speaker 2: this book for twenty twenty four, they had made something
Speaker 2: like fifty six billion from those sponsored links alone. So
Speaker 2: that's more than double the revenue of every single newspaper
Speaker 2: on the entire planet Earth. Ugh, and it's almost no costs.
Speaker 2: It's actually more lucrative than Amazon Web services. I looked
Speaker 2: into it this year twenty twenty five, and it looks
Speaker 2: like it's gonna be over seventy billion dollars a pure
Speaker 2: profit and.
Speaker 1: It's only going out Wow, and it's providing nothing for
Speaker 1: me as somebody who just wants to buy slippers.
Speaker 2: The other way around is making it worse, it's making
Speaker 2: it harder, true fine stuff. So you're paying, we are
Speaker 2: collectively paying seventy billion dollars to degrade our experience. It's
Speaker 2: like completely valueless extraction.
Speaker 1: So we've got companies actively taking money from you, taking
Speaker 1: it from small businesses and making your life worse. Whose
Speaker 1: idea was this, Well, it turns out we could probably
Speaker 1: point to a couple people we get into who After
Speaker 1: the break back in the early two thousands, there were
Speaker 1: a lot of books aimed at casual readers who were
Speaker 1: curious about how technology might reshape the economy. They had
Speaker 1: titles like Small Is the New Big and the Rise
Speaker 1: of the Creative Class. These books were really optimistic and
Speaker 1: they reassured people that tech innovation would lead to more
Speaker 1: opportunities for the little guy. But then came another way
Speaker 1: of books, and these were aimed directly at influencing the
Speaker 1: people who were in Silicon Valley who were starting these
Speaker 1: tech companies, books with titles like blitz Scaling and then
Speaker 1: There's Zero to One, a book written by Peter Teal
Speaker 1: who famously said quote competition is for losers, and he
Speaker 1: argued that monopolies are good for society.
Speaker 2: Part of this was just sort of business instinct, frankly,
Speaker 2: a very old one, not dissimilar to the old Robert
Speaker 2: barons of the nineteenth century who were like, you need
Speaker 2: to build a giant empire and control everything. But actually
Speaker 2: somewhat like them, they could have clothed that. They were like, well,
Speaker 2: when you are a monopoly and when you dominate your
Speaker 2: entire industry, you have enough money to treat your employees better.
Speaker 1: One of the books that you bring up is blitz Scaling,
Speaker 1: and it's specifically referencing Blitzkrieg, which is kind of incredible
Speaker 1: that we've just got a book which is basically recommending
Speaker 1: follow the war plans of World War two Germany.
Speaker 2: I think riad Hoffins said one of his interviews, He's like, well,
Speaker 2: I mean that's the whole idea. You don't carry too
Speaker 2: much stuff, you don't get too busy and move fast.
Speaker 2: So that was my business strategy. And if if you
Speaker 2: read Peter Teel, it has, you know, a certain level
Speaker 2: of practical wisdom and it's well written, but if you
Speaker 2: have an academic background, you can see very clearly that
Speaker 2: it's channeling kind of niche and theory of an ubermensh.
Speaker 2: The monopolist, in his view, is kind of a superior
Speaker 2: race of people, and there are clearly, in his view,
Speaker 2: like men who are destined to bleed and rule, and
Speaker 2: then like lesser creatures who are destined to serve.
Speaker 1: So let me posit the counterpoint to that, which is
Speaker 1: to say that, look, okay, you talking about whole bunch
Speaker 1: of big economics game.
Speaker 2: I'm not interested in that. I just want the APT
Speaker 2: to work, right. That's what I think is kind of
Speaker 2: clever and insidious about it. The business model feats on basically,
Speaker 2: as I say in the book, a very profound bet
Speaker 2: on human laziness, you know, like ultimately what the most
Speaker 2: of us want from technology, just that it works. As
Speaker 2: you said, you know, we don't want to have forty
Speaker 2: options most of the time.
Speaker 1: And I know you bring in cow cochlock. I love
Speaker 1: to love you to hit me with that, because that's
Speaker 1: one of my favorite parts of the book.
Speaker 3: So the power of couchlock.
Speaker 2: That's a term from the I guess we call the
Speaker 2: marijuana community, which refers to fact that when you get couchlocked,
Speaker 2: you're like unable to move, Like even a nuclear weapon
Speaker 2: is coming at your house. You're just like, oh, I
Speaker 2: guess that's just gonna happen.
Speaker 1: You just get get real high and you just on
Speaker 1: the couch is like, yo, we gotta go. It's like, bro,
Speaker 1: I'm sorry, I'm I can't move, man. I feel like
Speaker 1: a weigh a million pounds. I'm not leaving.
Speaker 2: And in business terms, it's kind of like, let's say
Speaker 2: you're buying something on Amazon. You're like, hey, there's this
Speaker 2: better deal over here. It's twenty dollars cheaper, but you
Speaker 2: have to sign up for something. You're like, ugh, I'm good,
Speaker 2: I can't do it. You know, like you just think
Speaker 2: the small amounts of irritation just are unfathomable. So I
Speaker 2: think frankly, couchlock rules the web at this point, and
Speaker 2: it tends to create monopoly, and at some point I think, look,
Speaker 2: I don't want to say people shouldn't be lazy. I
Speaker 2: don't want to pretend people. I just think if that's
Speaker 2: what it's going to be, then we need a better deal.
Speaker 2: Like if there's just going to be a couple of monopolies.
Speaker 2: We need a better deal, and we need to have
Speaker 2: them spread the wealth a bit better.
Speaker 1: I love this. We've gone from quoting the Bible to
Speaker 1: talk about weed this. This is a great conversation. So Okay,
Speaker 1: let's say nothing changes. Let's say things keep going on
Speaker 1: the way that they're going on. Where are we headed
Speaker 1: right now?
Speaker 3: Yeah?
Speaker 2: I mean I discussed in the book what I call
Speaker 2: the real road to serve them, which is the way
Speaker 2: in which a monopolized economy tends to lead to a
Speaker 2: rise of an autocratic leader. And frankly, I think we're
Speaker 2: pretty far down that road, I got to say, And
Speaker 2: I think it happens this way. You allow too much
Speaker 2: of the economy to become monopolized, it takes too much
Speaker 2: money from people. They become cynical, angry about democracy. You
Speaker 2: then have a possibility for democracy to fix it. And
Speaker 2: that's why I'm advocating need to do something. If not,
Speaker 2: people get more and more angry and increasingly say, all right,
Speaker 2: I don't believe in democracy.
Speaker 3: It can't do anything.
Speaker 2: I need some strong leader who's gonna put me first
Speaker 2: and directly deliver the.
Speaker 3: Money to me.
Speaker 2: And I think that is the way you see the
Speaker 2: rise of the populist dictator, and around the world. I'm
Speaker 2: not just talking to the United States, so there's obvious
Speaker 2: parallels the United States around the world. There's been dictators
Speaker 2: who have come to power in our era on the
Speaker 2: back of economic dissatisfaction.
Speaker 1: I hope that there are some members of Congress who
Speaker 1: have read your book and who are listening to this podcast.
Speaker 1: I suspect, however, that the vast majority of the people
Speaker 1: who are listening to this, who are watching this are
Speaker 1: not members of Congress, are not directly able to push
Speaker 1: those levers of government. What is an individual able to do?
Speaker 2: I think you have to in terms of citizen voting,
Speaker 2: be serious about people who truly serious about the threat
Speaker 2: of monopoly power, and don't just like say a few
Speaker 2: things and then quietly vote. I mean, I worked in
Speaker 2: the White House, and I worked on trying to get
Speaker 2: bills passed. And there's a lot of people who take
Speaker 2: too much money from tech platforms and when push comes
Speaker 2: as shove will never do anything to limit their business model.
Speaker 2: You have to be really careful who you vote for
Speaker 2: and their stances on monopoly.
Speaker 1: Okay, I know we're getting back into politics. Here, But
Speaker 1: ultimately this is where stuff ends up because scolding individual
Speaker 1: people for continuing to use Apple products or Google products,
Speaker 1: or trying to tell somebody to stop shopping on Amazon,
Speaker 1: it's not going to get us anywhere.
Speaker 2: Look, we have this illusion that we individuals can stand
Speaker 2: out the companies that are so much more powerful than
Speaker 2: we are. And I think we have learned and we
Speaker 2: know that in every society, every civilization, there are going
Speaker 2: to be platforms that are essential. And I was in
Speaker 2: Rome with my kids earlier this year and go to
Speaker 2: ancient center of Rome, and there is the forum, which
Speaker 2: is like that place where they have markets, they sell stuff,
Speaker 2: they also have speeches, they have the core. Everything is
Speaker 2: happening there. There's always been there, and so it's no
Speaker 2: answer to say, well, if you don't like where everything's happening,
Speaker 2: go somewhere else.
Speaker 3: That's not really an answer.
Speaker 2: There's always going to be essential platforms, and in our
Speaker 2: times they are companies like Amazon, and somebody's exes its
Speaker 2: own essential platform of speech. Unless you're going to become
Speaker 2: you know, hermer who lives in the cave, you cannot
Speaker 2: ignore that we have these essential platforms. But the platforms
Speaker 2: have a problem of main character syndrome. They think they
Speaker 2: are it, you know, they think they're the story. But
Speaker 2: they are supposed to be the sort of servants of
Speaker 2: the rest of the economy. You know, we've dealt with
Speaker 2: this problem before, like.
Speaker 3: With the trains.
Speaker 2: This was a big problem in the nineteenth century. We've
Speaker 2: like forgotten our own history because we're calling stuff tech.
Speaker 2: So I think the government should control and limit what
Speaker 2: they're able to do and also how much they charge.
Speaker 2: At some level, they need to be treated more like utilities.
Speaker 2: I mean, think about the electric network and how we
Speaker 2: limit how much they can charge you. If you didn't,
Speaker 2: what would the electric company do? They'd say, all right,
Speaker 2: want to give me one thousand dollars a month or
Speaker 2: ten thousand dollars a month. You'd say no way, and
Speaker 2: they'd say, okay, how does it feel to have no electricity?
Speaker 2: And I think we need to think of these platforms
Speaker 2: more like electricity, which is the platform for the rest
Speaker 2: of us. I also think they need to be under
Speaker 2: constant anti trust attention. But since this is not an
Speaker 2: anti trust party, I will get into that too much.
Speaker 1: So we've talked about that turning point that was in
Speaker 1: twenty thirteen we're constantly now talking about all right, we're
Speaker 1: probably it's some kind of inflection point for AI. Yeah,
Speaker 1: where do you see that playing out?
Speaker 2: Let me say something positive about AI before I turn
Speaker 2: to darker possibility. Okay, sort of positive vision of AI
Speaker 2: is that it actually is a great challenge to the
Speaker 2: tech platforms.
Speaker 3: Maybe.
Speaker 2: I mean, I was using open Ai earlier today for
Speaker 2: various things, and as far as I could tell, I
Speaker 2: didn't see a single ad or give any money to Google.
Speaker 2: I used it for a lot of things I would
Speaker 2: have used Google for maybe in the old days. And
Speaker 2: I also, I think was looking for some products and
Speaker 2: didn't have to go through you know, Amazon's.
Speaker 3: Insane sponsored links. So there is a possibility.
Speaker 2: And one of the things I have a big believer
Speaker 2: of in technology is you need a constant cycle of challengers.
Speaker 2: So AI could be a challenge to the platforms and
Speaker 2: could shake things up. And that's a very positive view.
Speaker 2: The negative view is that it would reinforce the power
Speaker 2: of the platforms, make them almost entirely invulnerable to competition,
Speaker 2: give them more of a government like status, and make
Speaker 2: us even more couch blocked than before, where not only
Speaker 2: can we not think about getting up to get a
Speaker 2: different company. We can't even like write our own emails,
Speaker 2: you know, where you just feel so totally dependent that
Speaker 2: it's like the sup of armor. You become like this
Speaker 2: ineveted kind of creature and you have to climb into
Speaker 2: your suit of armor to do anything. That's the scary future,
Speaker 2: as we're so utterly dependent, we can't do anything without it.
Speaker 1: You know. There's are you a hip hop fan?
Speaker 3: Somewhat?
Speaker 1: There's a track on DJ shadows introducing album, and it's
Speaker 1: called why hip Hop Sucks in ninety six. It's very
Speaker 1: short track and all it is it's a little bit
Speaker 1: of background music plays and then a guy's voice says,
Speaker 1: it's the money, money, Money Money track ends. That's it.
Speaker 1: It sounds to me like that's almost a soundtrack to
Speaker 1: some of your book, which is to say that we
Speaker 1: came in with all this optimism thinking, you know, our
Speaker 1: ideas and our beliefs and all this other stuff is
Speaker 1: going to really push us forward. And then it seems
Speaker 1: like a lot of what screwed this up, honestly, is
Speaker 1: just people fell victim to the promise of the money.
Speaker 3: Cashules everything around me. Dollar dollar billion.
Speaker 1: There we go, there we go. But that's what it is.
Speaker 2: Here's what I think is my ultimate prescription is if
Speaker 2: we as really believe something like we did in the
Speaker 2: early thousands, you have to create structures to control the
Speaker 2: power of money to corrode it. Structure beats out good
Speaker 2: intentions because everything is going to get corrupted and turn
Speaker 2: to shit by that creeping need for more and more
Speaker 2: little pieces of money. It's sort of like the way
Speaker 2: if you want a nonprofit, you can't be a nonprofit
Speaker 2: like the Red Cross and also have little profit stuff
Speaker 2: on the side. You can't say, basically, we're about saving
Speaker 2: people and disasters. Oh and also we advertise and hold
Speaker 2: parties on the side or something or I don't know,
Speaker 2: you know, whatever it else or we sell we sell merch,
Speaker 2: We sell merch because the merch part is going to grow.
Speaker 3: You have to be strict about this.
Speaker 1: Stuff. Can't serve two masters.
Speaker 2: That's right, where else it creeps, you know, to give credit.
Speaker 2: Wikipedia took a different path. Wikipedia in the early two
Speaker 2: thousands had roughly the same traffic as Google, if not more.
Speaker 2: They had a very easy path to riches and Jimmy Wales,
Speaker 2: who's the head of it. You know, It's almost like
Speaker 2: every morning he woke up and he had a button
Speaker 2: marked like billionaire that he could have pushed, and he didn't.
Speaker 2: And he's like, if we ever have advertising a Wikipedia,
Speaker 2: it's going to turn the shit. And like, Wikipedia is
Speaker 2: not perfect, but it is a nonprofit. It makes plenty
Speaker 2: of money by donations and it hasn't crept into this
Speaker 2: in this thing. So I say it again, structure beats
Speaker 2: good intentions. If you believe in something, you got to
Speaker 2: start at the beginning and structure it right, or else
Speaker 2: it's going to fall prey to the creep of cash
Speaker 2: rules everything around me.
Speaker 3: Cream get the money.
Speaker 1: Thank you so much for listening to kill Switch. If
Speaker 1: you want to hit us up, you could email us
Speaker 1: at kill Switch at Kaleidoscope dot NYC or on Instagram.
Speaker 1: We're at kill Switch Pod and if you got a
Speaker 1: second please do leave us a review, give us a rating.
Speaker 1: It helps other people find the show, which helps us
Speaker 1: keep doing our thing. And once you've done that, did
Speaker 1: you know that kill Switch is on YouTube? You can
Speaker 1: search for us there at kill Switch underscore pod or
Speaker 1: the link for that and everything else is in the
Speaker 1: show notes. Kill Switch is hosted by me Dexter Thomas
Speaker 1: It's produced by Shena Ozaki, Darluk Potts, and Julian Nutter.
Speaker 1: Our theme song is by Me and Kyle Murdoch and
Speaker 1: Kyle also mixed the show. From Kaleidoscope, our executive producers
Speaker 1: are Oswa Lashin, Mangesh Hadikadur and Kate Osborne. From iHeart,
Speaker 1: our executive producers are Katrina Norville and Nikki Etur. That's
Speaker 1: it from US. Catch on the next one. Good Fine,