Lost in the punditocracy’s freak-out over how scary a centralized socialist economy may be is how scary our centralized capitalist economy is right now. As a great Last Week Tonight segment demonstrated, every single major industry in our capitalist economy is dominated by just a few firms. America is a playground for oligarchs and oligopolies, and a constant uphill struggle for almost everyone else.
As a Democratic Socialist, I would assert that our economic dystopian reality is the logical conclusion of the perpetual chase for profits and the nature of private property—in that demand for private property is infinite, while its supply is finite, meaning that so long as demand to own a business remains infinite, the price to acquire one should rise as the supply gets more and more finite. Elizabeth Warren is more of an old school liberal (old school = someone who thinks outside the broken paradigm of the last 40 years that doubles as a major outlier for how economic policy is usually conducted in this country), and she believes that so long as you have strong government intervention to lay waste to monopolies, capitalist markets should work the way capitalism’s adherents say it’s supposed to.
Ideology aside: Elizabeth Warren is right—markets generally work much, much better without monopolies—and the laws to fix our economic malaise are already on the books. Monopolies and oligopolies constrict competition and deliver lower value to their customers at a higher price. Competition really does have a regulating effect on price and product and there is no question that breaking up Facebook, Google and Amazon just like we did with Microsoft, AT&T, AT&T (again) and Standard Oil would improve the economy. Per Elizabeth Warren:
Weak antitrust enforcement has led to a dramatic reduction in competition and innovation in the tech sector. Venture capitalists are now hesitant to fund new startups to compete with these big tech companies because it’s so easy for the big companies to either snap up growing competitors or drive them out of business. The number of tech startups has slumped, there are fewer high-growth young firms typical of the tech industry, and first financing rounds for tech startups have declined 22% since 2012.
Here’s what won’t change: You’ll still be able to go on Google and search like you do today. You’ll still be able to go on Amazon and find 30 different coffee machines that you can get delivered to your house in two days. You’ll still be able to go on Facebook and see how your old friend from school is doing.
Here’s what will change: Small businesses would have a fair shot to sell their products on Amazon without the fear of Amazon pushing them out of business. Google couldn’t smother competitors by demoting their products on Google Search. Facebook would face real pressure from Instagram and WhatsApp to improve the user experience and protect our privacy. Tech entrepreneurs would have a fighting chance to compete against the tech giants.
Warren says that as president, she will pass legislation requiring “large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.” If a tech company is raking in $25 billion global revenue per year, “companies would be prohibited from owning both the platform utility and any participants on that platform” and they “would not be allowed to transfer or share data with third parties.”
This would be a big boon to journalism. As January’s bloodbath in media demonstrated, the ad dollars which sustain my salary are drying up, yet Facebook reported $16.6 billion ad revenue in just the 4th quarter of 2018—up nine percent year over year. Google reported $32.6 billion 2018 4th quarter ad revenue—up 20 percent from last year. Google and Facebook are doing more to kill journalism in America than Donald Trump is, and Warren’s pledge to prohibit companies from “owning the platform utility and any participants on that platform” would be a serious game-changer for America’s Fourth Estate.
It has never been easier to do good journalism. Everyone has a camera and access to an infinite store of information. But it also is a dark age for journalism, in that while major media is thriving, everyone else subsisting on Google and Facebook traffic is drowning due to the dearth of ad dollars. I wrote back in January that we simply need to look to podcasting to see what the ad sales market should look like:
Podcasting has exploded in popularity, and due to the decentralized nature of podcasts’ distribution network, there is no centralized ad sales force like there is on the print internet with Facebook and Google. A great example of how effective the podcasting business can be is Bill Simmons’ The Ringer. The business is profitable, and most of the site’s revenue comes from podcasts. Google and Facebook are sucking up ad dollars that belong to publishers, and it’s time that the government stepped in and did something to protect its Fourth Estate.
If there is one thing that capitalists and socialists can agree on, it’s that privately owned monopolies are bad. Simply enforcing anti-trust laws currently on the books would do wonders for our economy, and this century’s decision not to exercise power we already have has been a choice. This is America—Paul Manafort gets a light sentence for unprecedented financial crimes, while Kalief Browder served a three year sentence over charges related to a stolen backpack (Browder committed suicide two years after being released—he was 16 when he was charged). The lesson from the Mueller investigation is that varying degrees of financial crime is our economy, and every liberal should be thankful that Elizabeth Warren is driving a serious policy discussion aimed at the heart of America’s oligarchy. Trump and his kind are not outliers—they are a symptom of our modern Gilded Age. We have the power to fight back against our financial masters, and it’s refreshing to see Democrats finally going on the offensive in ways that can really make a positive difference for the 99% of us who don’t make more than half a million dollars each year.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.