By Robert Reich
The Guardian (11/20/18)
Last week, the New York Times revealed that Facebook executives withheld evidence of Russian activity on their platform far longer than previously disclosed. They also employed a political opposition research firm to discredit critics.
There’s a larger story here.
America’s Gilded Age of the late 19th century began with a raft of innovations – railroads, steel production, oil extraction – but culminated in mammoth trusts owned by “robber barons” who used their wealth and power to drive out competitors and corrupt American politics.
We’re now in a second Gilded Age – ushered in by semiconductors, software and the internet – that has spawned a handful of giant hi-tech companies.
Facebook and Google dominate advertising. They’re the first stops for many Americans seeking news. Apple dominates smartphones and laptop computers. Amazon is now the first stop for a third of all American consumers seeking to buy anything.
Political power can’t be separated from economic power. Both are prone to abuse.
This consolidation at the heart of the American economy creates two big problems.
First, it stifles innovation. Contrary to the conventional view of a US economy bubbling with inventive small companies, the rate at which new job-creating businesses have formed in the United States has been halved since 2004, according to the census.
A major culprit: big tech’s sweeping patents, data, growing networks and dominant platforms have become formidable barriers to new entrants.
The second problem is political. These massive concentrations of economic power generate political clout that’s easily abused, as the New York Timesinvestigation of Facebook reveals. How long will it be before Facebook uses its own data and platform against critics? Or before potential critics are silenced even by the possibility?
America responded to the Gilded Age’s abuses of corporate power with antitrust laws that allowed the government to break up the largest concentrations.