WEBVTT - A Nobel Economist's Plan To Tax Digital Ads 0:00:02.440 --> 0:00:03.600 Also media. 0:00:04.519 --> 0:00:07.680 Hello and welcome to Better Offline. I'm your host ed Zeitron. 0:00:19.680 --> 0:00:22.120 Back in March of this year, MIT economist, their own 0:00:22.280 --> 0:00:25.440 some Oglu and MIT Sloan Simon Johnson published a paper 0:00:25.720 --> 0:00:28.760 called the Urgent Need to Tax Digital Advertising, where digital 0:00:28.800 --> 0:00:31.400 advertisers will be levied with a flat tax of fifty 0:00:31.400 --> 0:00:34.120 percent on all revenue above five hundred million dollars. And 0:00:34.159 --> 0:00:36.360 today I'm joined by Drone to walk through it. Daron, 0:00:36.440 --> 0:00:37.199 thank you for coming on. 0:00:37.520 --> 0:00:38.400 Thank you, Thanks Ed. 0:00:38.520 --> 0:00:42.519 It's my pleasure, so walk me through the idea. It 0:00:42.560 --> 0:00:45.000 seems pretty simple, but maybe there's more nuance to it. 0:00:45.280 --> 0:00:48.080 Well, it's very simple to implement, it's very simple to explain. 0:00:48.479 --> 0:00:51.960 The question is why, you know, why do something like this? 0:00:52.080 --> 0:00:55.560 You know, after all, who doesn't love something free? And 0:00:55.600 --> 0:00:59.920 we're getting a lot of free things because the entire 0:01:00.000 --> 0:01:06.920 our online ecosystem is monetized via digital ads. The issue is, 0:01:07.680 --> 0:01:14.200 I think this ecosystem creates a number of problems which 0:01:14.280 --> 0:01:16.840 are set to get worse. 0:01:16.680 --> 0:01:18.399 With AI right. 0:01:19.959 --> 0:01:25.360 The most obvious of those is something that's been discussed 0:01:25.560 --> 0:01:27.640 quite a bit over the last few years, which is 0:01:28.480 --> 0:01:36.080 that monetizing via digital ads means that you are going 0:01:36.160 --> 0:01:42.520 to encourage platforms to collect more and more data about people, 0:01:43.800 --> 0:01:49.040 and this creates a much more intrusive, lower privacy, and 0:01:49.080 --> 0:01:52.120 potentially distorted sort of system. 0:01:52.600 --> 0:01:52.880 Right. 0:01:53.400 --> 0:01:57.520 The second, perhaps corollary or separate thing which has started 0:01:57.560 --> 0:02:02.760 Reach receiving more attention, is that this also means you 0:02:02.840 --> 0:02:06.240 want to make sure that the eyeballs are glued to 0:02:06.280 --> 0:02:09.440 the screen, which your large screen, small screen, and that 0:02:09.840 --> 0:02:13.080 itself might generate a lot of other problems, including perhaps 0:02:13.080 --> 0:02:16.280 mental health problems, because you try to get people to 0:02:16.360 --> 0:02:23.680 stay on the platform by inducing strong emotions envy, jealousy, anger, outrage, 0:02:23.680 --> 0:02:27.320 and so on and sort of it creates a very 0:02:27.320 --> 0:02:30.400 different type of social environment than we are used to, 0:02:30.480 --> 0:02:34.640 with widespread negative consequences. But I think the one that 0:02:34.680 --> 0:02:40.520 I'm most worried about is that this reduces competition. It 0:02:40.600 --> 0:02:45.280 is impossible today for any service by a newcomer to 0:02:45.360 --> 0:02:48.080 come in and say, Okay, you're going to get this 0:02:48.240 --> 0:02:52.200 from Google, Facebook, Instagram for free, and I'm going to 0:02:52.400 --> 0:02:57.040 provide higher quality content for which you have to pay 0:02:57.280 --> 0:03:02.960 a subscription fee or something else. Especially difficult because newcomers 0:03:02.960 --> 0:03:04.440 are not going to have the network. There's going to 0:03:04.440 --> 0:03:08.400 be uncertainty about their quality. So it really cements the 0:03:08.480 --> 0:03:12.280 system where everything is going to be monetized via digital ads, 0:03:12.560 --> 0:03:16.560 and that's going to discourage the entry of new products, 0:03:16.639 --> 0:03:20.800 new services, and especially new technologies. For example, everybody worries 0:03:20.840 --> 0:03:24.120 about what social media and other online platforms and AI 0:03:24.520 --> 0:03:30.240 implies will imply for democracy. Well, something that actually creates 0:03:30.280 --> 0:03:37.040 more pro democratic conversations, higher quality content, that's going to 0:03:37.040 --> 0:03:38.840 be very difficult to get off the ground today. 0:03:40.160 --> 0:03:44.880 Right, So how does this tax actually change the incentive though? 0:03:45.880 --> 0:03:48.280 Well, I think the main way in which it changes 0:03:48.320 --> 0:03:55.520 the incentives is that it makes it possibly more likely 0:03:56.400 --> 0:04:00.160 that both existing platforms and new platforms will now say, 0:04:00.440 --> 0:04:03.480 let me experiment with new products that are higher quality 0:04:03.840 --> 0:04:07.880 for which I can build a clientele via subscription fees 0:04:07.960 --> 0:04:10.920 or other things. Because if I get one hundred million 0:04:10.960 --> 0:04:14.080 dollars via digital ads, half of it is gonna go away. 0:04:14.400 --> 0:04:16.680 If I can get that money for I have subscription fees, 0:04:17.120 --> 0:04:19.919 that's good. It's no longer so inferior to doing it 0:04:20.000 --> 0:04:20.880 via digital ads. 0:04:21.600 --> 0:04:24.760 But I think one of the things that concerns me 0:04:24.800 --> 0:04:26.280 with it, or maybe it's less of a concern and 0:04:26.360 --> 0:04:30.480 more just the after effect will be is the people 0:04:30.520 --> 0:04:32.440 are used to not paying for social media. 0:04:33.080 --> 0:04:35.000 That's why this needs to be high. You know, if 0:04:35.040 --> 0:04:37.560 this was a ten percent tax, it wouldn't make so 0:04:37.640 --> 0:04:40.360 much of a difference. So in some sense, when I 0:04:40.440 --> 0:04:46.400 mentioned ecosystem, I was intending to imply by that both 0:04:46.839 --> 0:04:50.720 what the offering side the platforms are doing and what 0:04:50.760 --> 0:04:56.320 the consumers are expecting. So there's a synergistic relationship between users, consumers, 0:04:56.360 --> 0:04:59.200 and the firms, and you want to change that relationship. Again, 0:04:59.400 --> 0:05:01.200 you wouldn't want to do it if the market system 0:05:01.279 --> 0:05:04.240 was working perfectly and everything was hanky dory, but I 0:05:04.279 --> 0:05:06.240 think there's a lot of evidence that's not the case 0:05:06.279 --> 0:05:06.799 at the moment. 0:05:07.320 --> 0:05:10.159 So and the incentives would be that they just can't 0:05:10.240 --> 0:05:12.880 make that much money off of digital ads, so they 0:05:12.880 --> 0:05:16.520 will have to find new business lines. But could this 0:05:16.760 --> 0:05:20.200 not potentially kill off the idea of the free social network. 0:05:20.680 --> 0:05:24.320 Well, first of all, I think that idea has become excessive. 0:05:24.400 --> 0:05:28.320 If we scale it back, it wouldn't be so bad. 0:05:29.560 --> 0:05:33.160 And in some sense, I think the purpose is to 0:05:33.240 --> 0:05:38.799 scale it back because once everybody expects everything for free, 0:05:39.520 --> 0:05:41.719 that does create a race to the bottom in terms 0:05:41.760 --> 0:05:44.320 of quality, in terms of data protection, in terms of 0:05:44.640 --> 0:05:48.880 you know, new technologies that you know, will actually change 0:05:48.880 --> 0:05:52.480 the face of the kinds of offerings that we get right. 0:05:52.640 --> 0:05:55.920 And it's I remember in the past, we've had companies 0:05:56.040 --> 0:05:58.560 try paid social networks and it just hasn't worked. 0:05:59.240 --> 0:06:02.040 Well. It didn't work because they were up against free 0:06:02.080 --> 0:06:07.200 social networks digitized so it monetized via digital ads, especially 0:06:07.279 --> 0:06:09.760 at a time when people didn't understand what the costs 0:06:09.800 --> 0:06:11.840 of these things were. You know, I think even today 0:06:14.200 --> 0:06:18.960 there are consumers who do not fully recognize the amount 0:06:18.960 --> 0:06:22.800 of data that's being collected about them. So if you 0:06:22.920 --> 0:06:25.920 go back ten years ago, I think both the sort 0:06:25.960 --> 0:06:31.760 of addictive or quasi addictive nature of social media, the 0:06:32.279 --> 0:06:35.039 extensive data collection, and how that data can be used 0:06:35.040 --> 0:06:38.159 both you know, to guide you towards certain products, perhaps 0:06:38.200 --> 0:06:42.000 to behaviorally manipulate you, or perhaps to charge you higher prices. 0:06:42.200 --> 0:06:44.840 All of these things were not completely understood. 0:06:45.560 --> 0:06:48.080 And I think I gain what you mean. 0:06:48.160 --> 0:06:52.840 It's like the latest stage model of Instagram and Facebook 0:06:53.200 --> 0:06:56.880 is so different because when everything's free, you don't really 0:06:56.920 --> 0:07:00.240 have a mechanism to control the customer other than just 0:07:00.680 --> 0:07:02.400 tricking them just continually. 0:07:03.000 --> 0:07:06.920 I mean, I'm not gonna trick is probably wrong. There 0:07:06.960 --> 0:07:09.920 is tricking. There is tricking, it's not everything. So you know, 0:07:09.960 --> 0:07:14.280 when you get an AD, it's useful, you're finding out 0:07:14.280 --> 0:07:19.480 about products. But what is the trade off between how 0:07:19.560 --> 0:07:22.320 much of your private data you want other people to 0:07:22.360 --> 0:07:26.120 have access to versus getting some of those products? And second, 0:07:26.160 --> 0:07:30.560 once people wants platforms have access to that data, what 0:07:30.720 --> 0:07:33.920 is there to stop them from offering some of the 0:07:34.080 --> 0:07:38.320 manipulative products as well as some of the useful products. 0:07:48.840 --> 0:07:52.320 So perhaps the biggest thing, because I just while prepping 0:07:52.360 --> 0:07:55.000 for this episode, I went and did some math, and 0:07:55.120 --> 0:07:57.680 what you're suggesting would kill Meta. Now I'm not saying 0:07:57.680 --> 0:08:00.160 that you should. You're suggesting you should kill Meta. I'm 0:08:00.200 --> 0:08:03.320 just saying that metas for the last four quarters their 0:08:03.360 --> 0:08:06.960 net income was fifty one point three five billion, offer 0:08:07.200 --> 0:08:10.920 one hundred and thirty billion dollars worth of revenue. So 0:08:11.720 --> 0:08:13.760 this would make their business model untenable. 0:08:13.920 --> 0:08:15.000 Is that well? 0:08:15.040 --> 0:08:16.880 First of all, no, I mean, you know, instead of 0:08:17.680 --> 0:08:20.960 fifty five billion, if they make you know, thirty billion, 0:08:21.640 --> 0:08:23.200 it's not the end of the world. I would be 0:08:23.280 --> 0:08:26.160 happy to have a company that is worth thirty billion. 0:08:26.600 --> 0:08:27.080 As would I. 0:08:27.600 --> 0:08:30.800 But the hope is that they would also then offer 0:08:31.800 --> 0:08:36.080 products and services that are higher quality, that are subscription based. 0:08:36.679 --> 0:08:40.120 You know, we know people still you know, pay for 0:08:40.240 --> 0:08:45.520 certain things, although less like Netflix. Netflix is also now 0:08:45.559 --> 0:08:50.800 being sort of being forced to move more in that direction. 0:08:51.920 --> 0:08:56.480 You know, is there a world in which higher quality 0:08:56.520 --> 0:09:00.920 Netflix for which some people pay is viable, where whereas 0:09:01.000 --> 0:09:04.640 you know, some lower quality one financed via you know, 0:09:04.720 --> 0:09:08.000 monetized via ads also coexists. I think those are questions, 0:09:08.040 --> 0:09:10.480 and I think it sort of opens up the market 0:09:10.520 --> 0:09:14.400 system to different, different sort of forces. So if there 0:09:14.480 --> 0:09:17.200 is a paid What's Up that has better security features 0:09:17.600 --> 0:09:22.880 and you don't get these completely unexpected annoying things that 0:09:23.000 --> 0:09:26.400 have started popping up in What's Up, perhaps that's attractive 0:09:26.400 --> 0:09:28.200 and some people will be happy to pay ten dollars 0:09:28.559 --> 0:09:29.240 a year for that. 0:09:29.920 --> 0:09:32.000 Kind of feels like the advertising model is a lazy 0:09:32.000 --> 0:09:35.000 man's business as well, because it doesn't incentivize you to 0:09:35.000 --> 0:09:38.840 make a better product. To exactly, a device is a monopoly, right. 0:09:38.720 --> 0:09:41.160 And why, you know, how did I arrive to this idea? 0:09:41.760 --> 0:09:46.120 My stick for the last you know, two decades at least, 0:09:46.440 --> 0:09:50.640 and especially with regards to AI and the digital technologies, 0:09:51.679 --> 0:09:57.480 is these technologies are extremely malleable. We can develop them 0:09:57.480 --> 0:10:03.640 in different ways. We can have higher quality technologies that 0:10:03.679 --> 0:10:07.480 increase worker productivity, or we can have rot automation lazy automation. 0:10:08.600 --> 0:10:13.040 You can have addictive social media that makes you go 0:10:13.120 --> 0:10:18.640 into your cocoon and you become uninterested in forming bridges 0:10:18.720 --> 0:10:22.000 and engaging in democratic citizenry. Or we can have platforms 0:10:22.040 --> 0:10:26.360 that actually encourage different types of communications and the active 0:10:26.400 --> 0:10:29.920 citizenry that democracy requires. Which ones of those will be? 0:10:30.360 --> 0:10:33.600 And I think since we have gone more and more 0:10:33.600 --> 0:10:38.640 in the automation way and the lay in the sort 0:10:38.640 --> 0:10:45.280 of toxic environment of social media, a change requires new products, 0:10:45.360 --> 0:10:50.400 new technologies, and that means a more open system. So 0:10:50.440 --> 0:10:54.880 the way that I sort of started sort of coming 0:10:54.880 --> 0:10:58.720 towards this idea was, well, what's the barrier to this? Well, 0:10:58.760 --> 0:11:01.720 the fact that there are a few big tech companies 0:11:01.720 --> 0:11:05.600 that can acquire competitors as a barrier, but the fact 0:11:05.679 --> 0:11:11.720 that even if they don't acquire you, they pigeonhole you 0:11:11.800 --> 0:11:14.400 into the same ecosystem in which they exist. And I 0:11:14.400 --> 0:11:15.640 think that's a big problem. 0:11:16.120 --> 0:11:18.160 How do you mean they pigeonhole you even if they 0:11:18.160 --> 0:11:20.319 haven't acquired you as a user, Because. 0:11:20.040 --> 0:11:21.920 To compete against them, you need to also offer your 0:11:21.960 --> 0:11:24.240 products for free, which means the only thing you can 0:11:24.280 --> 0:11:27.160 do is for digital advertising. If you need quality data, 0:11:27.240 --> 0:11:28.840 you can't afford it, You're not going to have an 0:11:28.880 --> 0:11:32.960 incentive to get it. If you need high quality, niche products, 0:11:33.040 --> 0:11:35.800 you know nobody's going to buy them because everybody is 0:11:35.920 --> 0:11:37.880 used to this free free v's and. 0:11:38.360 --> 0:11:43.360 Everything, right, So it creates a kind of h yeah, 0:11:43.480 --> 0:11:45.520 RaSE the bottom. But also just there's no way to 0:11:45.600 --> 0:11:47.280 there's no reason they would have. 0:11:47.240 --> 0:11:49.760 To compete, like you couldn't compete as they We haven't 0:11:49.800 --> 0:11:52.880 really seen any new social networks in years other than 0:11:53.000 --> 0:11:56.680 Blue Sky and Threads. And Threads is a part of 0:11:57.360 --> 0:11:59.839 a part of the Facebook machine. 0:11:59.320 --> 0:12:01.800 And we have seen talk about TikTok is just a 0:12:01.800 --> 0:12:06.120 amplification of the same business model, same monetization system, same 0:12:06.160 --> 0:12:10.280 sort of weaknesses being exploited as Instagram, Facebook. 0:12:09.920 --> 0:12:13.000 And they burned, and they burned billions and billions of 0:12:13.040 --> 0:12:15.440 dollars to get there. It wasn't like that. People try 0:12:15.480 --> 0:12:17.560 and I don't know why people would possibly think this, 0:12:17.600 --> 0:12:20.600 but they frame Byte Dance some plucky upstart versus just 0:12:21.200 --> 0:12:23.400 a massively funded Chinese juggernaut. 0:12:23.559 --> 0:12:26.439 Actually much is why I actually use the word ecosystem 0:12:26.480 --> 0:12:35.480 because this model itself is highly synergistic with companies growing 0:12:35.600 --> 0:12:40.000 very fast. And why do they grow very fast Because 0:12:40.000 --> 0:12:42.880 they want market share, they want to dominate the market. 0:12:42.920 --> 0:12:45.560 But I also want data and how is that possible? 0:12:45.600 --> 0:12:49.920 How can you grow so fast? Well, you get venture 0:12:49.960 --> 0:12:53.079 capital or Microsoft to bankroll you, as in the case 0:12:53.120 --> 0:12:56.000 of open ai, So you burn through a lot of 0:12:57.160 --> 0:12:59.920 cash early on in order to get data dominance and 0:13:00.040 --> 0:13:03.120 market dominance. And again it's not a pro competitive picture 0:13:03.160 --> 0:13:04.080 that's emerging here. 0:13:04.960 --> 0:13:09.200 I feel like General VII is something separate because with 0:13:09.320 --> 0:13:11.640 that they well they don't have a business model yet, 0:13:11.800 --> 0:13:12.280 they do not. 0:13:12.240 --> 0:13:14.680 Have a business model. But you know what that does, 0:13:14.960 --> 0:13:18.200 It makes it even more likely that we're gonna just 0:13:18.280 --> 0:13:21.840 repeat the same sins of earlier social media. Look at 0:13:21.840 --> 0:13:23.880 what is open ai doing. It's burning through a lot 0:13:23.920 --> 0:13:26.960 of cash in order to acquire market share and data. 0:13:27.559 --> 0:13:31.600 It's not monetizing through anything. And I think the most 0:13:31.679 --> 0:13:34.720 likely cash cow ideas that are coming up we're going 0:13:34.800 --> 0:13:37.280 to use generative AI for Internet search and we're gonna 0:13:37.280 --> 0:13:40.320 take over the digital ad revenues. Well, that's more of 0:13:40.360 --> 0:13:40.960 the same. 0:13:41.360 --> 0:13:43.880 And I don't different conversation. 0:13:43.960 --> 0:13:46.600 I don't think that'll work, but it's Nevertheless, I can 0:13:46.640 --> 0:13:47.439 see the idea. 0:13:47.880 --> 0:13:50.400 It's funny, these incentives really have it. 0:13:50.640 --> 0:13:52.600 I've never really thought about it before this conversation, but 0:13:52.880 --> 0:13:55.400 it feels like digital advertising really did harm the tech 0:13:55.440 --> 0:13:59.440 industry in that they found something very profitable that got 0:13:59.480 --> 0:14:03.240 more profit ple without making the user's life better at all. 0:14:04.120 --> 0:14:07.160 Well, Larry Page and say Gay Brinn, when they first 0:14:07.200 --> 0:14:10.640 formed their company, said we don't want ads. That's not 0:14:10.760 --> 0:14:11.640 like a good model. 0:14:11.960 --> 0:14:14.760 Yeah, it's empathetical to a search problem. 0:14:14.760 --> 0:14:17.280 At the moment, somebody came and gave them venture capital 0:14:17.280 --> 0:14:20.160 money and said, but we do it so that you 0:14:20.160 --> 0:14:22.680 can actually the lads. 0:14:22.760 --> 0:14:24.720 Yes, what if you were super rich. 0:14:25.080 --> 0:14:27.240 But it doesn't sound like this would kill the digital 0:14:27.280 --> 0:14:28.840 ads industry, because if. 0:14:28.960 --> 0:14:30.960 I don't think we should kill it either. I mean 0:14:31.000 --> 0:14:35.000 I think again, if we created a monolith, a monoculture, 0:14:35.040 --> 0:14:40.760 that wouldn't be good. If everything was on online, everything 0:14:40.880 --> 0:14:43.760 was based on subscription, that wouldn't be a good model either. 0:14:44.360 --> 0:14:49.320 So you want a variety, but so well is more 0:14:49.360 --> 0:14:52.120 operational level. I'm guessing that this would also have to 0:14:52.160 --> 0:14:56.760 have some way of cutting through things like if people 0:14:56.800 --> 0:14:59.240 set up subsidiaries to try and pass off the tax 0:14:59.280 --> 0:15:01.040 as well. You would have to make sure that there 0:15:01.120 --> 0:15:03.479 was a way around. 0:15:02.720 --> 0:15:06.240 You know. That's why this is not a sort of 0:15:06.280 --> 0:15:09.120 a graduated tax that is easier to gain. But if 0:15:09.200 --> 0:15:11.400 you know five hundred million, you know it's like a 0:15:11.480 --> 0:15:14.440 very small amount of money. So you just set a 0:15:14.520 --> 0:15:17.880 minimum like that, perhaps a little bit more so that 0:15:17.880 --> 0:15:20.480 the really small companies are not burdened by it. We 0:15:20.520 --> 0:15:23.720 know one problem, for example, with the European GDPR is 0:15:23.760 --> 0:15:27.240 that once you put a regulation like that, the burden 0:15:27.360 --> 0:15:29.840 is heavier on smaller companies, and so it actually it's 0:15:29.840 --> 0:15:32.280 a competitive advantage for the large platforms that you don't 0:15:32.280 --> 0:15:32.800 want to do that. 0:15:33.400 --> 0:15:36.680 But I think five hundred million would actually that would 0:15:36.720 --> 0:15:40.120 make a very healthy market for smaller companies. 0:15:39.960 --> 0:15:42.440 Which is great. We want more smaller companies as well. 0:15:42.840 --> 0:15:45.600 But wouldn't I think that this would help with the 0:15:45.600 --> 0:15:48.480 problem a great deal. But don't we also need something 0:15:48.480 --> 0:15:51.800 to do with the algorithms themselves. Because I feel you 0:15:51.800 --> 0:15:54.400 could do this and it would solve some problems. It 0:15:54.440 --> 0:15:57.880 would begin incentivizing them in the right direction. Theoretically, yeah, 0:15:57.920 --> 0:16:00.720 but you still have this problem of they wouldn't stop algorithm. 0:16:00.760 --> 0:16:05.400 In fact, this might encourage them to be more algorithmically. 0:16:03.640 --> 0:16:05.960 Absolutely, and that's why I don't think this is a 0:16:05.960 --> 0:16:12.640 silver bullet, you know it. You need a range of policies. 0:16:13.440 --> 0:16:17.880 But the hope is that at least such a policy 0:16:17.960 --> 0:16:23.000 would create some push towards some platforms and products to 0:16:23.040 --> 0:16:26.160 have better quality algorithms that don't trap you like that. 0:16:26.640 --> 0:16:29.960 But for example, if we're talking about social media, we 0:16:29.960 --> 0:16:33.800 should also be talking about repeal or relaxation of Section 0:16:33.880 --> 0:16:39.000 two thirty of the Digital Acts, so that you know, 0:16:39.640 --> 0:16:44.960 companies that algorithmically boost content cannot then say, well, you know, 0:16:45.000 --> 0:16:47.240 this is not our speech, this is somebody else's thing 0:16:47.400 --> 0:16:49.400 that we have nothing to do with it. So there 0:16:49.440 --> 0:16:51.760 are some details there that we have to think about. 0:16:51.800 --> 0:16:54.760 And I think Section two thirty, which was written in 0:16:54.800 --> 0:16:57.960 a different age in the nineteen nineties, is definitely not 0:16:58.480 --> 0:17:01.360 up for dealing with issues algorithmic boosty. 0:17:01.480 --> 0:17:04.480 And debating Section two thirty a side, because that is 0:17:04.520 --> 0:17:08.240 also a separate conversation. It does feel like we have 0:17:08.440 --> 0:17:11.879 just kind of not given tech companies much responsibility for 0:17:11.920 --> 0:17:12.440 what they're doing. 0:17:12.680 --> 0:17:16.520 No exactly, just that's the main reason why I want 0:17:16.520 --> 0:17:19.480 to have a conversation about Section two thirty because it 0:17:19.520 --> 0:17:25.000 can't be optimal that that corporations that are arguably the 0:17:25.080 --> 0:17:27.840 largest and the most powerful humanity has ever seen can 0:17:27.880 --> 0:17:30.160 then wash off their hands and say we're not responsible 0:17:30.200 --> 0:17:32.119 for anything that happens on our platforms. 0:17:32.680 --> 0:17:36.679 Yeah, it feels with two thirty and I am not 0:17:36.760 --> 0:17:38.480 as well read as I should be about it, but 0:17:39.000 --> 0:17:42.200 it feels as if that responsibility side is the real 0:17:42.359 --> 0:17:45.560 niggling issue but also the most thorny because on some 0:17:45.720 --> 0:17:49.119 level it makes sense with social media platforms that they 0:17:49.160 --> 0:17:52.040 should be able to say we're not responsible for all 0:17:52.080 --> 0:17:54.760 the posts, and if they had to be, they will. 0:17:54.760 --> 0:17:58.560 Absolutely And look, I think free speeches of major issue. 0:17:59.080 --> 0:18:02.280 I am worried about erosion of free speech, but you know, 0:18:02.760 --> 0:18:05.600 I'm also not like a one hundred percent free speech absolutist. 0:18:05.680 --> 0:18:07.160 I think we have to balance it, and the way 0:18:07.160 --> 0:18:09.880 that I would suggest as is again, so now we're 0:18:09.920 --> 0:18:14.240 changing topic a little bit. Second two thirty is, you know, 0:18:14.320 --> 0:18:17.800 subject to whatever legal requirements there are on you know, 0:18:19.320 --> 0:18:24.040 abusive content, et cetera. If you post something on Instagram 0:18:24.160 --> 0:18:30.080 or Facebook and the company doesn't algorithmically promote it, then. 0:18:30.720 --> 0:18:31.920 It's completely right. 0:18:33.040 --> 0:18:36.560 It's there. It's my speech. If my friends find out 0:18:36.600 --> 0:18:38.680 about it, they can go and look at it. If 0:18:38.680 --> 0:18:42.720 somebody stumbles on it, that's fine. But algorithmic boosting is 0:18:42.760 --> 0:18:45.320 like New York Times putting you on their front page. 0:18:45.560 --> 0:18:47.520 We can't say New York Times is putting you on 0:18:47.560 --> 0:18:49.280 your front page, and you can say all sorts of 0:18:49.600 --> 0:18:52.600 lies and crazy things, and that's just freedom of wealth. 0:18:53.560 --> 0:18:55.600 Yeah, okay, yeah, now I know what you mean. 0:18:55.480 --> 0:19:00.960 Though, if you have a more more preferred newspaper that example. 0:19:00.640 --> 0:19:02.520 No, no, no, but I know what you mean. It almost, 0:19:02.680 --> 0:19:04.960 and it seems like the problem is that you're saying 0:19:05.040 --> 0:19:06.960 is it isn't two thirty itself. It's the fact that 0:19:07.000 --> 0:19:10.320 the algorithms boost yeah, these particular things. 0:19:10.920 --> 0:19:13.720 Thirty was fine for the age it was written where 0:19:13.960 --> 0:19:18.520 nobody could could have understood the onslaught of algorithmic boosting 0:19:18.560 --> 0:19:20.400 promotion and manipulation that would come. 0:19:20.800 --> 0:19:23.240 And it feels like it's an incentive problem that we 0:19:23.400 --> 0:19:28.800 just it's almost that platforms should either move away from 0:19:28.800 --> 0:19:32.480 the algorithm model, because if you because the amendments section 0:19:32.520 --> 0:19:34.280 two thirty that just says it should go away kind 0:19:34.320 --> 0:19:36.280 of doesn't sit right with me. I don't think you should. 0:19:36.480 --> 0:19:39.480 It would make platforms like WordPress impossible to use, or 0:19:39.520 --> 0:19:42.440 like blogging platforms, but the idea of what they promote 0:19:42.480 --> 0:19:43.400 being more intentional. 0:19:43.520 --> 0:19:46.760 Absolutely that I actually reallyze this rule that I suggested 0:19:46.920 --> 0:19:52.240 completely protects WordPress. WordPress doesn't promote, right, So this sort 0:19:52.280 --> 0:19:55.440 of reformed two thirty is completely fine in that respect. 0:19:55.720 --> 0:19:58.439 So as far as this fifty percent tax, do we 0:19:58.480 --> 0:20:00.919 have any kind of historical press to something like this 0:20:01.040 --> 0:20:01.480 being done? 0:20:02.560 --> 0:20:07.240 And that's why, you know, am I sure fifty percent 0:20:07.280 --> 0:20:10.480 is the right level? Absolutely not per thirty. 0:20:11.119 --> 0:20:12.840 But I think fifty is great. 0:20:13.880 --> 0:20:14.159 Thank you. 0:20:14.640 --> 0:20:16.960 Well, Because the thing is, the way I look at 0:20:17.000 --> 0:20:21.040 it is these companies are so adept to avoiding responsibility, 0:20:21.600 --> 0:20:24.959 and they're so unwilling to change their ways and so 0:20:25.280 --> 0:20:28.919 unwilling to be responsible with what they're doing, that it 0:20:28.960 --> 0:20:30.480 needs to be like this. And I'm sure that if 0:20:30.480 --> 0:20:33.320 this actually got anywhere near a government, they would have 0:20:33.480 --> 0:20:34.879 the world's biggest tantrum. 0:20:35.359 --> 0:20:37.720 But I feel like we need stuff. 0:20:38.119 --> 0:20:41.280 It needs to be a shock to the system, absolutely. 0:20:41.080 --> 0:20:44.480 And I think that well, actually maybe that's the question. 0:20:44.640 --> 0:20:48.560 How practical would this be to actually implement? 0:20:49.240 --> 0:20:50.919 Well, Well, it depends on what you mean by that. 0:20:51.840 --> 0:20:54.639 Well, I mean, how how hard would it be to 0:20:54.760 --> 0:20:58.440 get to get this actually into existence with the government 0:20:58.520 --> 0:20:59.520 able to levy that tax. 0:21:00.200 --> 0:21:02.800 It would be extremely hard because of the lobbying, as 0:21:02.800 --> 0:21:05.399 you pointed out, But if there was agreement, if the 0:21:05.520 --> 0:21:08.600 Chinese government wanted to do it right, they could do 0:21:08.600 --> 0:21:12.600 it overnight. It's it's all out there. The digital ad 0:21:12.640 --> 0:21:16.359 revenue is there, it's measured, you know all. And the 0:21:16.440 --> 0:21:20.080 flat tax is very easy to implement. You could do 0:21:20.119 --> 0:21:26.720 it at source when you know advertisers, companies pay for advertising. 0:21:26.720 --> 0:21:28.520 You could do it in many different ways, so it's 0:21:28.800 --> 0:21:32.600 very easy, you know. We it's a version of variety 0:21:32.640 --> 0:21:35.679 of VAT like at volume taxes. We have them in 0:21:35.760 --> 0:21:39.840 under much more complicated situations when there is much lower 0:21:39.960 --> 0:21:43.440 quality data about what's going on. You know, many middle 0:21:43.480 --> 0:21:46.000 income countries have a very complex sales tax or a 0:21:46.080 --> 0:21:46.840 VAT tax. 0:21:47.200 --> 0:21:50.000 Yeah, and it almost feels that you could have a 0:21:50.040 --> 0:21:52.800 little fun with it as well. Maybe you could do 0:21:52.920 --> 0:21:55.119 this fifty percent tax and freed it directly into some 0:21:55.160 --> 0:21:58.159 sort of national venture fund. It would end up funding 0:21:58.160 --> 0:22:02.239 the feure. It feels as if the as go like 0:22:02.440 --> 0:22:05.080 on a larger scale, it feels like governments are just 0:22:05.880 --> 0:22:09.480 twenty years behind technology. Not even putting aside even Section 0:22:09.520 --> 0:22:12.400 two thirty. It feels like we should have an EPA 0:22:12.640 --> 0:22:15.119 or an FDA for data. It feels like we should 0:22:15.119 --> 0:22:18.160 have ways of Actually we don't know how these algorithms work, 0:22:18.160 --> 0:22:20.560 and it just feels a little crazy to me. 0:22:21.080 --> 0:22:23.159 Yeah. Absolutely, But the way I would say it is, 0:22:24.200 --> 0:22:27.280 I'm not sure that I would say they are twenty 0:22:27.359 --> 0:22:29.320 years behind in terms of knowledge. 0:22:29.359 --> 0:22:31.840 I actually, oh, not knowledge, just legislation. 0:22:32.160 --> 0:22:37.639 Legislation. Yeah. So, like a completely different but related topic 0:22:37.840 --> 0:22:43.400 is we actually need an infrastructure for data markets, right, 0:22:44.359 --> 0:22:49.520 so you know, I think everybody says data is going 0:22:49.560 --> 0:22:52.720 to be one of the most important factors of production 0:22:52.840 --> 0:22:57.080 for the future, more important than land. Imagine that I 0:22:57.200 --> 0:23:01.640 told you that today land that is still pretty relevant 0:23:01.640 --> 0:23:04.000 for many businesses. It's up for grabs. You can just 0:23:04.040 --> 0:23:06.440 go and get whatever piece of land you want and 0:23:06.960 --> 0:23:09.560 you don't have to pay for it. You know, that 0:23:10.000 --> 0:23:12.680 tragedy of the commons is well understood from history. It 0:23:12.680 --> 0:23:13.640