Jeffersonians vs Hamilitonians Regarding Facebook and Google

A very old argument comes to a contemporary debate. In a fascinating article @Frankpasquale starts at Hayek and runs a thread through Jefferson and Hamilton to the current debate about what, if anything, should be done about the might of Google, Facebook, and other big tech.

Tech Platforms and the Knowledge Problem By Frank Pasquale in American Affairs

Clashes among centralizers and decentralists can be particularly illuminating.

The Jeffersonian school has coalesced around the problem of lax antitrust enforcement in the United States, and competition promotion more generally. The Open Markets Institute (OMI), kicked out of the New America foundation for being too hostile to Google, has led the charge. Leaders at OMI, like Matt Stoller and Barry Lynn, argue that the Federal Trade Commission (FTC) should break up Facebook and establish Instagram and WhatsApp as competing social networks. Lina Khan, also at OMI, has written an exhaustive critique of Amazon’s gigantism that is already one of the Yale Law Journal’s most downloaded articles. The emphasis on subsidiarity in Catholic Social Thought is also a font of decentralist theory, often invoked by conservatives to protect the autonomy of local authorities and civil society institutions.

The Hamiltonians include traditional centrists (like Rob Atkinson, who recently coauthored Big Is Beautiful with Michael Lind), as well as voices on both ends of the political spectrum. Recapitulating Schumpeter’s praise of monopoly as a spur to growth, Peter Thiel’s Zero to One is a paean to monopoly power, justifying its perquisites as the just and necessary reward for dramatic innovation. On the left, Evgeny Morozov does not want to see the data stores of the likes of Google and Facebook scattered to a dozen different versions of these services. Rather, he argues, they are natural monopolies: they get better and better at each task they take on when they have access to more and more pooled data from all the tasks they perform. The ultimate Left logic here is toward fully automated luxury communism, in which massive firms use machine learning and 3-d printing to solve hunger, save the environment, and end the problem of scarcity. Left centralizers also argue that problems as massive as climate change can only be solved by a Hamiltonian approach.

The Jeffersonian and Hamiltonian visions lead to very different policy recommendations in the tech space. Jeffersonians want to end Google’s acquisition spree, full stop. They believe the firm has simply gotten too powerful. But even some progressive regulators might wave through Google’s purchase of Waze (the traffic monitoring app), however much it strengthens Google’s power over the mapping space, in hopes that the driving data may accelerate its development of self-driving cars. The price of faster progress may be the further concentration of power in Silicon Valley. To Jeffersonians, though, it is that very concentration (of power, patents, and profits) in megafirms that deters small businesses from taking risks to develop breakthrough technologies.
Facebook’s dominance in social networking raises similar concerns. Privacy regulators in the United States and Europe are investigating whether Facebook did enough to protect user data from third-party apps, like the ones that Cambridge Analytica and its allies used to harvest data on tens of millions of unsuspecting Facebook users. Note that Facebook itself clamped down on third-party access to data it gathered in 2013, in part thanks to its worries that other firms were able to construct lesser, but still powerful, versions of its famous “social graph”—the database of intentions and connections that makes the social network so valuable to advertisers.

For Jeffersonians, the Facebook crackdown on data flows to outside developers is suspicious. It looks like the social network is trying to monopolize a data hoard that could provide essential raw materials for future start-ups. From a Hamiltonian perspective, however, securing the data trove in one massive firm looks like the responsible thing to do (as long as the firm is well regulated). Once the data is permanently transferred from Facebook to other companies, it may be very hard to ensure that it is not misused. Competitors (or “frenemies,” in Ariel Ezrachi and Maurice Stucke’s terms) cannot access data that is secure in Facebook’s servers—but neither can hackers, blackmailers, or shadowy data brokers who are specialists in military-grade psyops. To stop “runaway data” from creating a full-disclosure dystopia for all of us, “security feudalism” seems necessary.

Policy conflict between Jeffersonians and Hamiltonians, “small-is-beautiful” democratizers and centralist bureaucratizers, will heat up in coming years.

Do read the whole thing, plenty to think about and discuss.
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