Tech's Age Of Extraction w/ Tim Wu | MR Live

Around 2012-2013, the internet transitioned from a democratizing and enabling force to an extractive one. Major platforms matured, solidified their monopolies, and began prioritizing extracting value from the economy for themselves, rather than fostering broad prosperity.

Amazon's take from small businesses increased from 20% to 50-60%, Google bought competitors like Waze, and Facebook acquired Instagram and WhatsApp, all contributing to market dominance and increased extraction.

During the critical period of tech consolidation, antitrust enforcement was 'in hibernation,' particularly under the Obama administration. This allowed major tech companies to acquire their most dangerous competitors, cementing their monopoly power based on flawed interpretations of market competition.

The Google-Waze merger was permitted because officials argued they weren't 'real' competitors (one for 'where you are,' one for 'where you're going'). This reflects a 'neoliberal idea' that the market would self-correct and a belief that 'tech is always special.'

The business model of modern tech platforms relies heavily on capturing users through 'herding' tactics, making platforms addictive, and exploiting the human tendency towards convenience. This creates dependence, allowing platforms to extract value through fees, data, and advertising.

Wu states, 'convenience is the most powerful force in human behavior right now.' Platforms borrow models from the gambling industry to make services addictive, relying on human 'laziness' and busyness.

Individualized algorithms, designed to guess and feed users what they want, are in fundamental tension with freedom. They create echo chambers, reinforce existing biases, and prevent individuals from encountering diverse ideas, leading to 'comic book characters of themselves' and societal polarization.

Wu argues that algorithms 'stew you in your own juices,' unlike a human editor who curates for a broad audience. Platforms claim a First Amendment right to their algorithms, a view Wu disputes.

When government fails to rebalance the economy and prevent monopolization and extraction, it leads to widespread anger and a predictable sequence where citizens turn to strongman leaders. Relying on post-facto redistribution (e.g., wealth taxes) is insufficient because concentrated wealth enables political influence to resist such measures.

Wu refers to this as 'the real road to serfdom,' citing historical examples like Venezuela, Germany in the 30s, and Italy in the 20s. He notes that the wealthy are effective at influencing government to prevent their own taxation.

The original intent of antitrust laws, like the Sherman Act, was to prevent the aggregation of political and economic power, protecting workers, farmers, and consumers from 'monster corporations.' Reinterpreting these laws in light of their original 'democracy project' is crucial, as is recognizing the decentralization of private power as a constitutional-level value.

Wu notes that the founders debated an anti-monopoly provision in the Constitution. He argues that current private entities wield as much or more power than individual states, overwhelming the federal government.