The Age of Extraction | Tim Wu | TMR

Around 2012-2013, the internet transitioned from a tool that enabled widespread creativity and wealth generation to one that became primarily extractive. This shift occurred as major tech platforms matured and began to leverage their dominant positions to take more from the economy for themselves.

Wu states, 'the internet goes from being enabling to being extractive and all of the major platforms most of the technologies kind of reach the maturity and begin taking more and more from the economy for themselves.'

The primary cause for the internet's extractive turn was the establishment and entrenchment of monopolies by leading tech platforms. Once these companies fortified their market positions, they began to systematically increase their 'take' from users and businesses.

Wu attributes the change to 'monopoly. I think that's the period where the main tech platforms sort of established and entrenched and and fortified their monopoly and realized that what they wanted to do was to defend their position and begin turning up the dials of extraction.' He cites Amazon's take increasing from 20% to 50-60%, Google buying Waze, and Facebook acquiring Instagram and WhatsApp.

During the Obama administration, antitrust enforcement was 'in hibernation,' allowing critical mergers that eliminated competition (e.g., Google's acquisition of Waze, Facebook's acquisitions of Instagram and WhatsApp). This inaction was rooted in a neoliberal belief that markets self-correct and a misguided idea that 'tech is always special' and immune to regulation.

Wu, who was part of the administration, noted, 'We thought of Google as kind of like a charity, and we were really nice to them, but we like were not thinking straight about the dangers of private power.' He recounts an antitrust staffer justifying the Google-Waze merger by claiming they weren't competitors.

The liberal idea that it's acceptable to allow monopolies and highly profitable corporations to grow, with the intention of taxing them later, is flawed. The 'later never comes' because concentrated wealth translates into political power, enabling the wealthy to resist taxation and redistribution efforts, creating an endless cycle of trying to catch up.

Wu challenges 'a tenor of liberal thought... that says well it's okay to have monopoly it's okay to have incredibly profitable corporations because we can always fix it later and we need to grow the pie and we'll just tax it later... the main problem with that theory is that the later never comes.'

Individualized algorithms, designed to predict and feed users what they supposedly want, are in fundamental tension with freedom. They create 'comic book characters' of users by constantly reinforcing existing interests and prejudices, hindering exposure to diverse ideas and critical examination, ultimately leading to societal polarization and 'stewing in your own juices.'

Wu states, 'individualized algorithms which are basically trying to guess what you want and feed it to you I feel like they're in some fundamental tension with freedom.' He contrasts this with human editorial judgment and notes the 'dilitterious effect on people's ability to have, you know, critical examination of the world.'