I just read this article and wanted to record a thought on it.
I'm totally in favor of breaking up big businesses if it makes the structure they're part of less reliant on them. To me, the goal of a breakup is to eliminate Too Big To Fail, not to just cut down tall trees. This is one of the things that continues to make me a liberal instead of a seize-and-control centrally planned economy guy: I think the regulator's job is merely to ensure the integrity of the competitive landscape. The reason is practical rather than ideological: I don't think breaking up those tech companies makes anything particularly better, and it doesn't materially increase their vulnerability to disruption.
Right now, I don't think Facebook or Amazon are TBTF. (Maybe AWS.) In fact, I could easily imagine them being displaced. For Facebook, MySpace went the way of the dodo. We already see a shift away from Facebook as a fun platform, and toward a kind of utility role. For Amazon, the alternative is local shopping, which has existed for hundreds of years, and certainly e-commerce would flourish if they went away.
Compare this to the problem of the big banks. There is no way you could imagine simply another Goldman Sachs coming up in a few years' time. You couldn't imagine replacing the role JP Morgan Chase plays in today's financial markets. Those businesses are extremely entrenched, and as such, they have a foundational role that makes them indispensable. They should be broken up simply to render them into extinguishable competitive entities.
Or look at the Big Four accounting firms, or the ratings agencies, or the still-huge insurance companies. There's plenty of TBTF wherever you look. But Facebook doesn't yet have an ecosystem around it.
Of those big tech companies, the exception is Google. They probably are TBTF, and that's a problem. Kudos to them for having invented a genius way to make the internet accessible, but they are too entrenched in our national infrastructure for our own good. I would be in favor of breaking that entrenchment.
Here's what I would rather see: the government supporting research into the creation of public versions of what these companies fundamentally offer.
The fundamental offering of Facebook is a stable online avatar of your real self. More than the ability to message long-lost friends or view bullshit content, your Facebook presence gives you a transportable version of yourself that lives online, connects to your real identity, and is basically secure. I would love it if we started exploring ways to create a government department that offered this instead.
The fundamental offering of AWS—the part of Amazon that is probably TBTF—could be turned into a strategic resource like the oil reserve. We still have oil companies, but we also treat the product as a national priority to maintain our access to.
The fundamental offering of Google could probably also be nationalized. The US government created an open-source internet already; there's no reason it couldn't extend that project to supporting the development of an open-source, public way to access the internet.
Basically, I want the government to disrupt these companies. They're the only entity large enough to do so. Rather than just shit on how evil and big Amazon or Facebook or Google have gotten, let's acknowledge that they got that way by providing services that are, essentially, part of public infrastructure—and get to work making them officially part of our national infrastructure.
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