Over at National Review, Nicole Gelinas is critical of James Damore’s memo to Google. It is disturbing that a conservative magazine like National Review should decide to publish a piece making the points that this one does. If Damore can’t get a fair hearing for his views at National Review, then things are pretty bad. Gelinas takes the view that Google was wrong to fire Damore, because Google says it encourages internal dissent. But Gelinas then criticizes Damore’s memo. I agree that Google is being hypocritical here. But Gelinas’s critique of the memo is unfair and weak. Gelinas appears to have two…
Google and our elite universities appear to inhabit the same ideological bubble and intone the same diversity mantras. And that is not surprising, because almost everyone at Google is a product of the modern university and those at its HR department the likely product of its more PC inflected half—the humanities or soft social sciences. And Google must live within the world of mainstream media and government regulation, and these two sectors are also dominated by elite university graduates of the last quarter century.
But nevertheless the institutions and their employees operate under different constraints. Google is the elite university without tenure and the elite university is Google without market discipline. You might think that tenure is the more important obstacle to enforcing an orthodoxy like modern diversity policy. After all, a professor at an elite university would not be fired for making the largely accurate factual claims about the average differences in temperament between women and men that the Googler did in the memo that got him sacked.
Uber is a company under attack by politicians and the media. Many politicians, like Bill De Blasio, want to restrain its growth to protect incumbent cab companies. Others want to undermine its business model by requiring that its drivers using its devices be employees rather than independent contractors. The New York Times recently ran a story clearly suggesting that the company is using unfair psychological tricks to keep drivers picking up customers.
These complaints lack merit. Protecting incumbents against new forms of competition is a classic harm to consumers. Uber drivers do not meet the traditional criteria for employees because, among other factors, the company does not control their hours or place of doing business. And as Geoffrey Manne shows, the management innovations Uber introduces through the understanding the psychology of workers have benefits to consumers and drivers alike.
But the assault on Uber also ignores a hugely important effect of company and similar services: they reduce inequality— which these same politicians and mainstream media argue is the most important issue of our time. Uber improves both the material condition of the middle-class consumer and the lower-middle-class driver. First, the consumer gets a service that starts looking more like having a chauffeur than a taxicab driver. For instance, he can summon a driver without previous notice and within minutes by pushing a button on his phone in the comfort of home rather than hail a taxi in a storm.
The New York Times publishes many silly opinion pieces on law and economics but a recent article by Jonathan Taplin, Isn’t it Time to Break Up Google, plumbs new depths of folly. The title understates the breadth of its ambition: the author wants to break up or regulate as public utilities Facebook and Amazon as well as Google.
His unproven premise for acting against these successful companies is that they are monopolies. For instance, he contends that Amazon has a monopoly in e-books. But it is not at all clear that Amazon has market power once the market is correctly defined: hardcovers and paperbacks provide substitutes that discipline prices for e-books. Google has a large market share in online search but its competitors are only a click away.
But, more importantly, it is great mistake to break up or bring under comprehensive regulation companies simply because they are monopolies. There is a reason that our antitrust laws attack only monopolization, not the mere possession of monopoly power. As Justice Antonin Scalia observed in Verizon Communications v. Trinko, one of his great but less well-known opinions: “monopoly is what attracts ‘business acumen’ in the first place; it induces risk taking that produces innovation and economic growth. To safeguard the incentive to innovate, the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct.”
The desire for monopoly gives life to the economy no less than the desire to procreate gives life to the natural world.
In his column "Robber Baron Recessions" Paul Krugman argued this Monday that American companies have been investing less because of greater market concentration in their industries. Exhibit A for Krugman is Verizon: he contends that it has not sufficiently invested in Fios, a fiber optic system that would accelerate internet speeds. He thus wants more government intervention to police monopoly power and decrease economic concentration. Both Krugman’s claim and his remedy are dubious. Let’s begin with alternate explanations for low corporate investment. The most obvious is government regulation. The Obama administration has been one of the most aggressive regulators in history.…
The New York Times has recently portrayed Amazon as a workplace somewhere between the first circle of hell and a bad section of purgatory, with harsh supervisors and backbiting colleagues that are the inevitable consequence of the company’s management practices. I did not need Jeff Bezos’s demurral to doubt the accuracy of portrait. In a company this large, there will always be bad supervisors, intriguing colleagues and disgruntled employees that can support a lot of wild anecdotes. And the New York Times, a newspaper that even a former ombudsman has admitted is on the left, has an agenda of attacking business the better to justify an intrusive state.
But let us suppose for moment that the Times portrait is more accurate than Bezos’s denial that overall these anecdotes capture the reality of the company. Is it really any cause for concern? The employees chose to work there and can leave at any time: it is not a case of indentured servitude. The white collar jobs portrayed here pay good wages. And most important of all, we have a competitive labor market that serves the needs of employees and consumers alike. Even the Times’ description shows that many employees find the culture empowering and thrilling. Some employees stay for a long period. Others use the skills they learn to start their own businesses. It may well make perfect sense for some people to endure upfront unpleasantness—even of the kind that leads to occasional tears—to gain discipline and knowledge that will later stand them in good stead.
And the result is excellent for consumers. I am sure I am not alone in finding Amazon to be the emporium of dreams.
Yesterday The European Union sued Google under its competition law. This lawsuit shows either that the European Union understands nothing about the way technological acceleration affects competition or that the EU is biased against American companies or both.
The complaint is that Google has monopoly power in search and that it abuses this power by favoring its own services, like its own travel reservation business, in the links it provides to queries. But with a few taps on a keyboard or a click of a mouse, consumers can easily switch from one search engine to another, casting doubt on the EU’s claim that Google has monopoly power. More importantly, technological acceleration makes it very unlikely that Google could maintain an entrenched monopoly in search over the long haul. As people spend more time on their smart phones and less time at their computer, Google’s form of search is increasingly displaced by apps. Another threat to Google is Facebook, which uses the connections of its social network to customize search and advertisements.
The difficulty of maintaining entrenched monopoly in accelerating technologies is not unique to Google.
This year has brought renewed optimism about the prospects for strong artificial intelligence and new expressions of fear about its dangers. And some prominent people have expressed optimism and fear simultaneously. Stephen Hawking argues that AI is progressing rapidly, possibly leading to the biggest event in human history– the creation of general machine intelligence that exceeds that of humans. Hawking also argues that creating more intelligent machines might also be the last such event because they will takeover. Elon Musk, the entrepreneurial creator of Tesla and Space X, sees strong AI as a demon that we will unleash on humanity.
One might dismiss these concerns as the latest manifestation of a fear that goes back to the Romantic Era. It was first represented by Frankenstein’s monster, who symbolized the idea that “all scientific progress is really a disguised form of destruction.” But Hawking and Musk are serious people to whom attention must be paid.
On balance, I think the threat posed by autonomous machine intelligence is overblown.
I appreciate John McGinnis’s account of the state of our liberty. He’s right that by some objective measures liberty is on the decline. But, a consistent individualist might say, liberty is on the march when it comes to same-sex marriage, legalized marijuana, and the general front of “lifestyle liberty.”