February 4, 2026 • 36 mins
For a while, the internet felt like it might actually work. Dexter talks with legal scholar and author Tim Wu about his new book The Age of Extraction and how that early optimism faded as companies learned how to extract value from just about everything.
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- The Age of Extraction, by Tim Wu: https://www.penguinrandomhouse.com/books/691177/the-age-of-extraction-by-tim-wu/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:09):
When was the last time you heard somebody say something
optimistic about the Internet? All about you? But for me,
it's been a while, which sucks, because there was a time,
and I'm talking about the nineties and the two thousands
and even up into the early twenty tens, when a
lot of the conversation about the Internet and technology in
general was really idealistic.
Speaker 2 (00:29):
Basically, what happened to the idea that the Internet was
this magical network everybody would be able to start their
own little thing and have pockets of wealth emerged all
over the country, not to mention make every country into
a democracy, not to mention make every creative person a star.
Speaker 1 (00:48):
Tim Wu is a legal scholar who writes about monopolies,
and he is very critical of some of the big
tech companies like Google and Amazon and Meta, But he
didn't always feel that way. Back in those early inner days,
a lot of us really believed that tech was going
to change the world for the better.
Speaker 2 (01:05):
Actually, at the very late part of that, I was
working in the Silicon Valley, so I was drinking the kool.
Speaker 3 (01:10):
Aid from the firehose like straight on.
Speaker 2 (01:12):
And before that, I was working in the US government
at the Supreme Court, my coke clerk. Actually my office
mate was Ketanji Jackson, who is now the.
Speaker 3 (01:23):
Supreme Court Justice.
Speaker 2 (01:24):
So we were friends, and you know, I got to
say we were very optimistic, but you know, it didn't
quite all work out the way we had thought.
Speaker 1 (01:34):
Tim worked in the Biden administration advising on anti trust policies,
and he's now a law professor at Columbia. His most
recent project is a quest to understand how the Internet
went from this utopian vision to something that a lot
of people blame for everything that's wrong in the world,
and he wrote a book about it called The Age
of Extraction. So today's conversation is going to take us
(01:54):
from Bible versus to rap music, to some Israeli map
software that you've probably used without even realizing it, to
that feeling that you get when you smoke way too
much weed and you can't get up off the couch,
and hopefully by the end of it, you'll have a
better idea of what happened to that nineties Internet optimism,
why it didn't pan out, and maybe some things that
(02:14):
we could do about it. Right now, I'm afraid Kaleidoscope
and iHeart podcast this. This is kill Switch I'm Dexter Thomas.
(02:35):
I'm all right, So, I mean, I think you're talking
(03:18):
about this kind of stretch from late nineties into the
early two thousands. I mean, I remember, you know, I'm
a kid growing up in Sanmadadino, California, but you're not
familiar with it. It's about an hour east of La
Nobody really goes there, right, and I'm feeling like, shoot,
I don't have to leave Sammonddino. Everything I want I
(03:39):
could find it on the Internet. I could learn to
do anything. I can connect with anybody. I remember the
first time I was talking with somebody on aim and
it was incredible. I can just talk to somebody on
the other side of the planet for free, you know,
as long as I pay the dial up bill, right,
And it seemed like something new was coming out every
year where I'm going to be able to just do
(04:02):
things that I never even thought were possible. And there
was definitely a time where everything felt optimistic, but the
optimism seemed realistic.
Speaker 3 (04:11):
Yeah it did.
Speaker 2 (04:12):
And you know, even going further back, I grew up
in a very kind of hippie environment.
Speaker 3 (04:18):
I actually was living in Canada.
Speaker 2 (04:20):
I went to a school where all the grades were
kind of combined into one. And you know, that was
its own kind of utopian movement back in the sixties
and seventies. And I think a lot of us thought
that the Internet was kind of the instantiation of a
lot of the ideas from that era. You know, you
(04:40):
were going to let people connect with each other, and
as soon as people connected, you know, of course there
would be peace. Right, all right, all violence and problems
are misunderstanding.
Speaker 1 (04:49):
All we got to do is just talk to each other.
Will be good, Yeah, we'll be good.
Speaker 2 (04:53):
I remember a friend of mine said, like, the Internet
is like Esperanto. Do you know Esperanto the language?
Speaker 3 (04:59):
Yes?
Speaker 1 (05:00):
Oh my gosh, yes, I made the mistake of spending
about a couple weeks trying to learn Esperanto. Yes, yes,
but yes, so Esperanto basically the language that the idea was. Listen,
we need to leave aside all the national languages. We
create a new language, and that will allow for equality
because we'll all literally speak the same language, will all
(05:22):
actually be on the same page. That will lead us
into this really promising future. And some people really dedicated
themselves to.
Speaker 3 (05:28):
It entire lives, entire lives.
Speaker 2 (05:30):
And my friend had you know, saw the Internet as Esperanto,
the successful version, you know, like it had actually eliminated.
Speaker 3 (05:39):
They believed all the.
Speaker 2 (05:41):
Differences between computers and ultimately between us, and you know,
that was the original idea basically of cyberspace, which was
like this better world that was the like the Internet,
no one knows you're a dog era where you're going
to pretend to be like somebody else, and that would
be liberating. Maybe I'm just like whoever, I am like
half Asian dude, but in cyberspace, I don't know, like
(06:04):
a blue space alien or something.
Speaker 1 (06:06):
Right, and that's a beautiful thing. Yeah right, Okay, Then
what happened? So as Tim was starting research for his book,
he looked at Google, not as in he was searching
up things on the Google search engine. He started looking
at Google LLC as a source, or at least as
a symbol of how tech companies went from seemingly visionary
(06:26):
to obviously exploitative.
Speaker 2 (06:29):
There was Google. It started at a university at Stanford.
It was originally housed on some random computers. Then it
was in a garage, so it had all these kind
of idealistic settings. Their early talk was very idealistic. We
just want to organize the world's information.
Speaker 3 (06:45):
There was this.
Speaker 2 (06:45):
Idea they had that our main goal is to take
you where you need to go. We're not going to
hold on to you. We just want to show you
the way. Their slogan was don't be evil.
Speaker 3 (06:57):
Yeah.
Speaker 1 (06:58):
I mean I remember being a genuine fan of Google.
I mean I was like an unplayed employee. Man, Gmail
came out. I remember having my Gmail invice. You remember
that where you you They didn't give it to everybody,
so you had a limited amount of invites. Man, I
was passing those things out. Every new thing that Google
came out with. It felt like, I don't want to
(07:20):
say a utopian future, but it felt like everything was
going to be interesting and amazing and convenient and helpful.
I mean, how can you argue against that?
Speaker 3 (07:30):
Yeah? No, I agree, and I shared that feeling.
Speaker 2 (07:34):
I thought there was something very well intentioned about Google,
the early company. I mean, some of your listeners might
be like, what are they talking about?
Speaker 1 (07:43):
Who are these Is there something wrong with them?
Speaker 3 (07:47):
Right? But no, I think they're very well intentioned.
Speaker 2 (07:50):
A lot of my friends who were like in another
era might have gone to work at nonprofits, went to
go work at Google because.
Speaker 1 (07:57):
They believed in the mission.
Speaker 2 (07:58):
They believed in it, and the early Google, you know,
didn't have a business model, and then they kind of
grudgingly took on advertising, but said all the stuff, how,
we're just gonna be totally different kind of advertising. It's
gonna be actually stuff you really.
Speaker 3 (08:12):
Want because you're looking for it anyway.
Speaker 2 (08:14):
So it's not gonna be annoying, it's not gonna be cluttery,
it's not gonna mess with things, you know.
Speaker 3 (08:19):
The founders had.
Speaker 2 (08:20):
Already written a paper where they said that advertising rex search,
so they were already on record on saying that like
paid search, where whoever pays most gets the top link,
is a terrible thing.
Speaker 1 (08:33):
Actually, let's get specific about that paper. It came out
in nineteen ninety eight and it's titled The Anatomy of
a large Scale Hypertextual Web Search Engine. And in that paper,
Sergey Brandon Larry Page, the founders of Google, wrote the
following quote, the goals of the advertising business model do
not always correspond to providing quality search to users. And
(08:56):
later on they say that quote, we expect that advertising
funded so search engines will be inherently biased towards the
advertisers and away from the needs of the consumers. End quote. So,
just to summarize, almost thirty years ago, the founders of
Google said in public that ads would bias search engines
and make them worse.
Speaker 3 (09:18):
So what happened.
Speaker 2 (09:19):
So they started making money, and then they made this
decision in the early two thousands that they were going
to go public.
Speaker 3 (09:27):
But they had this idea.
Speaker 2 (09:29):
We're going to go public, but we're not going to
do it like normal.
Speaker 3 (09:33):
We don't want to become evil.
Speaker 2 (09:34):
So they wrote this big, long letter to their shareholders
and it starts with like, we're.
Speaker 3 (09:40):
Not a normal company. We don't want to be a
normal company.
Speaker 2 (09:43):
We're going to do all these things that are you're
going to think are terrible, like crazy projects. We're going
to care about our users, not our advertisers. Don't be
evil as our model, on and on and on.
Speaker 1 (09:54):
In that two thousand and four letter, the founders wrote, quote,
Google is not a conventional company. You do not intend
to become one.
Speaker 2 (10:02):
But but they still decided to become a regular for
profit Delaware corporation, which means that they're registered in Delaware,
which has basically the loosest requirements for a corporation and
is the standard in corporate America.
Speaker 1 (10:20):
Okay, yeah, standard, that is what conventional companies do. But
remember Google said they weren't conventional, and as Tim points out,
it didn't have to go that way.
Speaker 2 (10:31):
They could have maybe done things differently at that point,
set up something either as a nonprofit if they really
believe this stuff, they could have been the kind of
corporation that is not necessarily for profit, what's called a
B corp, like Pantagonia. But they chose the normal Delaware
corporate form that every evil corporation in the world has,
(10:54):
and then you know, over the next ten or fifteen years,
they proceed to violate it, basically every promise in that letter,
and right the reason was, I mean, it's so predictable.
They had pressure to continually increase revenue, and ultimately that
(11:15):
meant they had, in fact, to treat advertisers better than
their users. That means they had to have more and
more and more ads. It means they had to cut
projects that didn't make sense. I mean, scripture says no
man can obey two masters, and they believed that they
were different. I think it's the original sin of Silicon Valley,
maybe of America, is that we have this belief that
(11:38):
we can have our cake and eat it too, obey
the interests of their users and consumers, and also their
advertisers and also their investors.
Speaker 1 (11:47):
I believe that you're the first person on this show
to quote the Bible to me. But that's pretty appropriate
because in some ways, no, for real, it does feel
like we actually have straight from that light that felt
really you know, people were truly evangelical about the promises
(12:07):
of Silicon Valley, the promises of technology, but even specifically
about companies. I really remember, you know, myself being one
of them, felt really really optimistic about what Google was
doing and what Google could do in the future. For
most of us, though, I feel like they kind of
fell out of that light for us as a gradual process.
Most people probably couldn't tell you a time when they
(12:30):
stopped feeling good about Google. But you have a very
specific date that you point to in your book that
you feel like was a specific turning point a day.
Speaker 3 (12:41):
Yes, it's a second.
Speaker 2 (12:42):
The first is the decision become a for profit company.
The second was June eleventh, twenty thirteen. That's the fall of.
Speaker 3 (12:51):
The early Internet.
Speaker 1 (12:54):
This is where things get interesting for me. The date
when tim says, the utopian promise of the early Internet
died forever. We'll get into why after the break. Okay,
So some background on that date of June eleventh, twenty thirteen.
(13:17):
So first we actually have to go back to two
thousand and six to a project made by an Israeli
programmer called FreeMap Israel. What made this project interesting was
not only that it was free and it helped you
with figuring out directions on where you wanted to go,
but that everything was crowdsourced, even the traffic information, and
this became its defining feature, and they had the tagline
(13:37):
out smarting traffic Together. Pretty soon FreeMap Israel had expanded
globally and had changed their name to something that you
might recognize, Ways. So Ways got popular pretty quickly because
of that crowdsourced information. It was genuinely useful. It would
warn you about an accident nearby or if police were
up ahead, so you could change your travel route or
(13:59):
your travels speed accordingly.
Speaker 2 (14:03):
So it was emerging as a challenger to Google Maps.
And here you had these two kind of I guess
models of the future. So what happened in twenty thirteen
in June the contest was.
Speaker 3 (14:16):
About to start.
Speaker 2 (14:17):
It pitted Google, which had a more traditional map program,
against Ways, which was based on user contributions, and the
competition was on for the future, and all of a sudden,
Google just bought Ways.
Speaker 1 (14:30):
At this point in time, on one side, you had
Google Maps, which said they had a billion users, and
on the other you had Ways, which was reporting around
fifty million users. But they were growing and really quickly.
So Google opened up their wallet, pulled out reportedly about
a billion dollars, and just bought Ways. They let the
app itself continue to operate, but some of that really
(14:50):
valuable data that weays it generated, like that crowdsource traffic information,
all of that was incorporated up into the new mothership
of Google Maps.
Speaker 2 (15:00):
They used, you know, frankly, a method pioneered by John Rockefeller,
which is, if you have problems with the competitor, buy them.
I remember being pretty shocked that that happened. Now we
go to the law, which is my particular area of expertise,
and there is a law called the Clayton Act, you know,
the anti monopoly law, which says you're not supposed to
(15:22):
be allowed to merge companies to create a monopoly and
I think you do not need to be a sophisticated
economist to say there's two mapping programs, one buys the other,
that's a monopoly.
Speaker 1 (15:35):
Yeah, pretty cut, dry cut and try.
Speaker 2 (15:38):
So it went to the Federal Trade Commission, which is
the agency one of the two agencies that tries to
block illegal mergers, and Federal Trade Commission said, fine, no problem.
Speaker 1 (15:51):
So this is pretty strange. The FDC initially said that
they were going to look into this acquisition, but a
couple months later they stopped the investigation and they let
the purchase go ahead.
Speaker 2 (16:02):
I remember I was had been working there, right, and I
was like, how did they get to that conclusion? As
far as I can tell, this looks pretty much like
a merger of monopoly that that reduced competition. So I
never I didn't find the answer out to that question
for many years until one day I was at a
anti trust party.
Speaker 3 (16:19):
I was hanging out.
Speaker 4 (16:22):
I was trying back up the anti trust party, Like,
I was, what does the party full invite look like
for that the anti trust party? We just like pull up,
we canna talk about anti trust, Like if you like monopolies,
don't come like what.
Speaker 2 (16:35):
Basically, yeah, okay, it's a thing.
Speaker 1 (16:39):
It's a thing. Invite me next time I'm down. This
sounds great, you.
Speaker 3 (16:42):
Know, it's like, it's a pretty cool crowd. They're not bad.
Speaker 2 (16:46):
Matt stolers there, Lena Kahn will be there. Like, it's
a bunch of people. So I was at this party
and I was having drinks and I realized one of
the person I was drinking with had worked on that case.
So it was after a while I was like, so, like, what,
you know, what went down? How did that happen? And
she said, well, you know, I know, look kind of bad.
(17:08):
But the boss said we should let the merger go through.
And he said, here was his theory that Google is
what you use when you want to figure out where
you are, and Ways is what you use when you
want to figure out where you're going.
Speaker 3 (17:26):
Huh, I'll say it again.
Speaker 2 (17:28):
Google is where you go when you want to figure
out where you are, and Ways is what you use
if you want to figure out where you're going.
Speaker 3 (17:34):
So they're not really competing.
Speaker 1 (17:36):
You have just described a map, like the two core
functions of a map.
Speaker 2 (17:44):
Yeah, so they were not forced to release that reasoning
to the public, but that's what happened, and the reason
I pinpoint on that point. I think that point early
twenty tens is when the Internet really started to turn,
and it is because the first generation of companies, people
like Google, started becoming threatening by new guys, not just Ways, Instagram,
(18:08):
a whole bunch of other companies, and as opposed to
fighting them, as opposed to competing, they just started buying them.
Speaker 1 (18:15):
We reached out to the FTC for comment on Tim's
account of this story. As of this recording, we haven't
heard back. So for a while, this acquisition thing was
a trend big tech companies would just buy their competition.
Instagram was starting to become a popular place for people
to connect online, so Facebook bought them. They also bought WhatsApp.
Maybe you remember when Zappo's was getting really popular as
(18:37):
a place to buy shoes online, and then Amazon bought
them to add to their online shopping empire. They also
bought Whole Foods. Microsoft picked up LinkedIn and GitHub. The
next year after getting Ways, Google bought an AI company
called DeepMind. I could keep going here. Tim worked on
a study a while back that showed them, between two
thousand and seven and twenty eighteen, Google and Facebook just betwre.
(19:00):
The two of them collectively acquired over three hundred and
fifty companies. The federal government let all those acquisitions go through,
and that study closes with this line of commentary. As
with a basketball referee who never calls a foul, the
question is whether the players have really been faultless, or
whether the referee is missing something. What might things look
(19:24):
like if Google had not bought Ways?
Speaker 2 (19:26):
You know, I think that what was lost in that
acquisition was the chance of a full fledged rival, you know,
to Google, and another ecosystem, two different, fully functioning ecosystems
that offered you a real alternative because so much turns
on maps as sort of a foundation and a good
search engine, and if you imagine it growing, if you
(19:50):
imagine it development itself. It also was, as we said,
this kind of different user based business model, and who
knows where that would have gone.
Speaker 1 (19:58):
I mean, within the Google War.
Speaker 2 (20:00):
They were supposedly separate, but they were under ultimately the
command of Google, and ultimately the founders all left and
expressed extreme disappointment they had ever done this.
Speaker 1 (20:12):
In twenty twenty one, the CEO of Ways from before
the acquisition left the company. He wrote a blog post
about why he was leaving, and he also reflected back
on when he sold to Google back in twenty thirteen,
and you can tell he regrets it. It almost reads
is less of a resignation letter than an apology letter
to society in general. And there's one line that hits
pretty hard here quote looking back, we could have probably
(20:36):
grown faster and much more efficiently had we stayed independent, And.
Speaker 3 (20:41):
I think we lost the chance.
Speaker 2 (20:44):
I mean not only through ways, but a million little acquisitions,
a million different aquihiers of having a truly more decentralized
economy that was one in which spread a lot more
wealth to a lot more people. Instead, it has concentrated
wealth and a very small number of people.
Speaker 1 (21:02):
Acquisitions are just one method of maintaining a monopoly. In
his book, Tim lays out a bunch of other tactics.
They're used by tech giants, including Amazon.
Speaker 2 (21:11):
So Amazon Marketplace, I guess fifteen years ago really was
in some ways carrying out the early dream of the Internet.
It was making a lot of people rich at the time,
they charged twenty percent, only twenty percent of fees, and
then they would ship your products to people, and a
lot of people started making a lot of money. I
(21:32):
have in my book stories about like this Indiana barber
who start selling palmade as a side business and suddenly
is like making millions of dollars. But then Amazon, once
it kind of had everybody, It had all the sellers,
it had the buyers, you know, locked in with Prime
or whatever, then it just started turning all the knobs.
(21:54):
They started adding what they called advertising fee for sellers.
So you know when you search an Amazon on if
you use Amazon, but you get like, hey, I'm looking
for slippers, and you get a bunch of sponsored results. Yeah,
those turned into a huge cash cow for Amazon because
the sellers bid against each other to get those spots,
and they don't feel they can sell without them, and
(22:16):
they started making more and more money. When I released
this book for twenty twenty four, they had made something
like fifty six billion from those sponsored links alone. So
that's more than double the revenue of every single newspaper
on the entire planet Earth. Ugh, and it's almost no costs.
(22:36):
It's actually more lucrative than Amazon Web services. I looked
into it this year twenty twenty five, and it looks
like it's gonna be over seventy billion dollars a pure
profit and.
Speaker 1 (22:45):
It's only going out Wow, and it's providing nothing for
me as somebody who just wants to buy slippers.
Speaker 2 (22:51):
The other way around is making it worse, it's making
it harder, true fine stuff. So you're paying, we are
collectively paying seventy billion dollars to degrade our experience. It's
like completely valueless extraction.
Speaker 1 (23:06):
So we've got companies actively taking money from you, taking
it from small businesses and making your life worse. Whose
idea was this, Well, it turns out we could probably
point to a couple people we get into who After
the break back in the early two thousands, there were
(23:29):
a lot of books aimed at casual readers who were
curious about how technology might reshape the economy. They had
titles like Small Is the New Big and the Rise
of the Creative Class. These books were really optimistic and
they reassured people that tech innovation would lead to more
opportunities for the little guy. But then came another way
of books, and these were aimed directly at influencing the
(23:50):
people who were in Silicon Valley who were starting these
tech companies, books with titles like blitz Scaling and then
There's Zero to One, a book written by Peter Teal
who famously said quote competition is for losers, and he
argued that monopolies are good for society.
Speaker 2 (24:08):
Part of this was just sort of business instinct, frankly,
a very old one, not dissimilar to the old Robert
barons of the nineteenth century who were like, you need
to build a giant empire and control everything. But actually
somewhat like them, they could have clothed that. They were like, well,
when you are a monopoly and when you dominate your
entire industry, you have enough money to treat your employees better.
Speaker 1 (24:31):
One of the books that you bring up is blitz Scaling,
and it's specifically referencing Blitzkrieg, which is kind of incredible
that we've just got a book which is basically recommending
follow the war plans of World War two Germany.
Speaker 2 (24:50):
I think riad Hoffins said one of his interviews, He's like, well,
I mean that's the whole idea. You don't carry too
much stuff, you don't get too busy and move fast.
So that was my business strategy. And if if you
read Peter Teel, it has, you know, a certain level
of practical wisdom and it's well written, but if you
have an academic background, you can see very clearly that
(25:10):
it's channeling kind of niche and theory of an ubermensh.
The monopolist, in his view, is kind of a superior
race of people, and there are clearly, in his view,
like men who are destined to bleed and rule, and
then like lesser creatures who are destined to serve.
Speaker 1 (25:28):
So let me posit the counterpoint to that, which is
to say that, look, okay, you talking about whole bunch
of big economics game.
Speaker 2 (25:35):
I'm not interested in that. I just want the APT
to work, right. That's what I think is kind of
clever and insidious about it. The business model feats on basically,
as I say in the book, a very profound bet
on human laziness, you know, like ultimately what the most
of us want from technology, just that it works. As
you said, you know, we don't want to have forty
(25:57):
options most of the time.
Speaker 1 (25:59):
And I know you bring in cow cochlock. I love
to love you to hit me with that, because that's
one of my favorite parts of the book.
Speaker 3 (26:04):
So the power of couchlock.
Speaker 2 (26:07):
That's a term from the I guess we call the
marijuana community, which refers to fact that when you get couchlocked,
you're like unable to move, Like even a nuclear weapon
is coming at your house. You're just like, oh, I
guess that's just gonna happen.
Speaker 1 (26:24):
You just get get real high and you just on
the couch is like, yo, we gotta go. It's like, bro,
I'm sorry, I'm I can't move, man. I feel like
a weigh a million pounds. I'm not leaving.
Speaker 2 (26:33):
And in business terms, it's kind of like, let's say
you're buying something on Amazon. You're like, hey, there's this
better deal over here. It's twenty dollars cheaper, but you
have to sign up for something. You're like, ugh, I'm good,
I can't do it. You know, like you just think
the small amounts of irritation just are unfathomable. So I
think frankly, couchlock rules the web at this point, and
(26:55):
it tends to create monopoly, and at some point I think, look,
I don't want to say people shouldn't be lazy. I
don't want to pretend people. I just think if that's
what it's going to be, then we need a better deal.
Like if there's just going to be a couple of monopolies.
We need a better deal, and we need to have
them spread the wealth a bit better.
Speaker 1 (27:13):
I love this. We've gone from quoting the Bible to
talk about weed this. This is a great conversation. So Okay,
let's say nothing changes. Let's say things keep going on
the way that they're going on. Where are we headed
right now?
Speaker 3 (27:27):
Yeah?
Speaker 2 (27:27):
I mean I discussed in the book what I call
the real road to serve them, which is the way
in which a monopolized economy tends to lead to a
rise of an autocratic leader. And frankly, I think we're
pretty far down that road, I got to say, And
I think it happens this way. You allow too much
of the economy to become monopolized, it takes too much
(27:49):
money from people. They become cynical, angry about democracy. You
then have a possibility for democracy to fix it. And
that's why I'm advocating need to do something. If not,
people get more and more angry and increasingly say, all right,
I don't believe in democracy.
Speaker 3 (28:06):
It can't do anything.
Speaker 2 (28:07):
I need some strong leader who's gonna put me first
and directly deliver the.
Speaker 3 (28:13):
Money to me.
Speaker 2 (28:15):
And I think that is the way you see the
rise of the populist dictator, and around the world. I'm
not just talking to the United States, so there's obvious
parallels the United States around the world. There's been dictators
who have come to power in our era on the
back of economic dissatisfaction.
Speaker 1 (28:32):
I hope that there are some members of Congress who
have read your book and who are listening to this podcast.
I suspect, however, that the vast majority of the people
who are listening to this, who are watching this are
not members of Congress, are not directly able to push
those levers of government. What is an individual able to do?
Speaker 2 (28:51):
I think you have to in terms of citizen voting,
be serious about people who truly serious about the threat
of monopoly power, and don't just like say a few
things and then quietly vote. I mean, I worked in
the White House, and I worked on trying to get
bills passed. And there's a lot of people who take
too much money from tech platforms and when push comes
(29:11):
as shove will never do anything to limit their business model.
You have to be really careful who you vote for
and their stances on monopoly.
Speaker 1 (29:19):
Okay, I know we're getting back into politics. Here, But
ultimately this is where stuff ends up because scolding individual
people for continuing to use Apple products or Google products,
or trying to tell somebody to stop shopping on Amazon,
it's not going to get us anywhere.
Speaker 2 (29:35):
Look, we have this illusion that we individuals can stand
out the companies that are so much more powerful than
we are. And I think we have learned and we
know that in every society, every civilization, there are going
to be platforms that are essential. And I was in
Rome with my kids earlier this year and go to
(29:56):
ancient center of Rome, and there is the forum, which
is like that place where they have markets, they sell stuff,
they also have speeches, they have the core. Everything is
happening there. There's always been there, and so it's no
answer to say, well, if you don't like where everything's happening,
go somewhere else.
Speaker 3 (30:12):
That's not really an answer.
Speaker 2 (30:13):
There's always going to be essential platforms, and in our
times they are companies like Amazon, and somebody's exes its
own essential platform of speech. Unless you're going to become
you know, hermer who lives in the cave, you cannot
ignore that we have these essential platforms. But the platforms
have a problem of main character syndrome. They think they
(30:34):
are it, you know, they think they're the story. But
they are supposed to be the sort of servants of
the rest of the economy. You know, we've dealt with
this problem before, like.
Speaker 3 (30:43):
With the trains.
Speaker 2 (30:44):
This was a big problem in the nineteenth century. We've
like forgotten our own history because we're calling stuff tech.
So I think the government should control and limit what
they're able to do and also how much they charge.
At some level, they need to be treated more like utilities.
I mean, think about the electric network and how we
limit how much they can charge you. If you didn't,
what would the electric company do? They'd say, all right,
(31:07):
want to give me one thousand dollars a month or
ten thousand dollars a month. You'd say no way, and
they'd say, okay, how does it feel to have no electricity?
And I think we need to think of these platforms
more like electricity, which is the platform for the rest
of us. I also think they need to be under
constant anti trust attention. But since this is not an
anti trust party, I will get into that too much.
Speaker 1 (31:29):
So we've talked about that turning point that was in
twenty thirteen we're constantly now talking about all right, we're
probably it's some kind of inflection point for AI. Yeah,
where do you see that playing out?
Speaker 2 (31:43):
Let me say something positive about AI before I turn
to darker possibility. Okay, sort of positive vision of AI
is that it actually is a great challenge to the
tech platforms.
Speaker 3 (31:57):
Maybe.
Speaker 2 (31:58):
I mean, I was using open Ai earlier today for
various things, and as far as I could tell, I
didn't see a single ad or give any money to Google.
I used it for a lot of things I would
have used Google for maybe in the old days. And
I also, I think was looking for some products and
didn't have to go through you know, Amazon's.
Speaker 3 (32:16):
Insane sponsored links. So there is a possibility.
Speaker 2 (32:20):
And one of the things I have a big believer
of in technology is you need a constant cycle of challengers.
So AI could be a challenge to the platforms and
could shake things up. And that's a very positive view.
The negative view is that it would reinforce the power
of the platforms, make them almost entirely invulnerable to competition,
(32:42):
give them more of a government like status, and make
us even more couch blocked than before, where not only
can we not think about getting up to get a
different company. We can't even like write our own emails,
you know, where you just feel so totally dependent that
it's like the sup of armor. You become like this
ineveted kind of creature and you have to climb into
(33:03):
your suit of armor to do anything. That's the scary future,
as we're so utterly dependent, we can't do anything without it.
Speaker 1 (33:10):
You know. There's are you a hip hop fan?
Speaker 3 (33:13):
Somewhat?
Speaker 1 (33:14):
There's a track on DJ shadows introducing album, and it's
called why hip Hop Sucks in ninety six. It's very
short track and all it is it's a little bit
of background music plays and then a guy's voice says,
it's the money, money, Money Money track ends. That's it.
(33:39):
It sounds to me like that's almost a soundtrack to
some of your book, which is to say that we
came in with all this optimism thinking, you know, our
ideas and our beliefs and all this other stuff is
going to really push us forward. And then it seems
like a lot of what screwed this up, honestly, is
just people fell victim to the promise of the money.
Speaker 3 (33:56):
Cashules everything around me. Dollar dollar billion.
Speaker 1 (34:02):
There we go, there we go. But that's what it is.
Speaker 2 (34:08):
Here's what I think is my ultimate prescription is if
we as really believe something like we did in the
early thousands, you have to create structures to control the
power of money to corrode it. Structure beats out good
intentions because everything is going to get corrupted and turn
to shit by that creeping need for more and more
(34:32):
little pieces of money. It's sort of like the way
if you want a nonprofit, you can't be a nonprofit
like the Red Cross and also have little profit stuff
on the side. You can't say, basically, we're about saving
people and disasters. Oh and also we advertise and hold
parties on the side or something or I don't know,
you know, whatever it else or we sell we sell merch,
We sell merch because the merch part is going to grow.
Speaker 3 (34:53):
You have to be strict about this.
Speaker 1 (34:54):
Stuff. Can't serve two masters.
Speaker 2 (34:56):
That's right, where else it creeps, you know, to give credit.
Wikipedia took a different path. Wikipedia in the early two
thousands had roughly the same traffic as Google, if not more.
They had a very easy path to riches and Jimmy Wales,
who's the head of it. You know, It's almost like
every morning he woke up and he had a button
(35:18):
marked like billionaire that he could have pushed, and he didn't.
And he's like, if we ever have advertising a Wikipedia,
it's going to turn the shit. And like, Wikipedia is
not perfect, but it is a nonprofit. It makes plenty
of money by donations and it hasn't crept into this
in this thing. So I say it again, structure beats
good intentions. If you believe in something, you got to
(35:39):
start at the beginning and structure it right, or else
it's going to fall prey to the creep of cash
rules everything around me.
Speaker 3 (35:46):
Cream get the money.
Speaker 1 (35:52):
Thank you so much for listening to kill Switch. If
you want to hit us up, you could email us
at kill Switch at Kaleidoscope dot NYC or on Instagram.
We're at kill Switch Pod and if you got a
second please do leave us a review, give us a rating.
It helps other people find the show, which helps us
keep doing our thing. And once you've done that, did
you know that kill Switch is on YouTube? You can
(36:14):
search for us there at kill Switch underscore pod or
the link for that and everything else is in the
show notes. Kill Switch is hosted by me Dexter Thomas
It's produced by Shena Ozaki, Darluk Potts, and Julian Nutter.
Our theme song is by Me and Kyle Murdoch and
Kyle also mixed the show. From Kaleidoscope, our executive producers
are Oswa Lashin, Mangesh Hadikadur and Kate Osborne. From iHeart,
(36:37):
our executive producers are Katrina Norville and Nikki Etur. That's
it from US. Catch on the next one. Good Fine,
When was the last time you heard somebody say something
optimistic about the Internet? All about you? But for me,
it's been a while, which sucks, because there was a time,
and I'm talking about the nineties and the two thousands
and even up into the early twenty tens, when a
lot of the conversation about the Internet and technology in
general was really idealistic.
Speaker 2 (00:29):
Basically, what happened to the idea that the Internet was
this magical network everybody would be able to start their
own little thing and have pockets of wealth emerged all
over the country, not to mention make every country into
a democracy, not to mention make every creative person a star.
Speaker 1 (00:48):
Tim Wu is a legal scholar who writes about monopolies,
and he is very critical of some of the big
tech companies like Google and Amazon and Meta, But he
didn't always feel that way. Back in those early inner days,
a lot of us really believed that tech was going
to change the world for the better.
Speaker 2 (01:05):
Actually, at the very late part of that, I was
working in the Silicon Valley, so I was drinking the kool.
Speaker 3 (01:10):
Aid from the firehose like straight on.
Speaker 2 (01:12):
And before that, I was working in the US government
at the Supreme Court, my coke clerk. Actually my office
mate was Ketanji Jackson, who is now the.
Speaker 3 (01:23):
Supreme Court Justice.
Speaker 2 (01:24):
So we were friends, and you know, I got to
say we were very optimistic, but you know, it didn't
quite all work out the way we had thought.
Speaker 1 (01:34):
Tim worked in the Biden administration advising on anti trust policies,
and he's now a law professor at Columbia. His most
recent project is a quest to understand how the Internet
went from this utopian vision to something that a lot
of people blame for everything that's wrong in the world,
and he wrote a book about it called The Age
of Extraction. So today's conversation is going to take us
(01:54):
from Bible versus to rap music, to some Israeli map
software that you've probably used without even realizing it, to
that feeling that you get when you smoke way too
much weed and you can't get up off the couch,
and hopefully by the end of it, you'll have a
better idea of what happened to that nineties Internet optimism,
why it didn't pan out, and maybe some things that
(02:14):
we could do about it. Right now, I'm afraid Kaleidoscope
and iHeart podcast this. This is kill Switch I'm Dexter Thomas.
(02:35):
I'm all right, So, I mean, I think you're talking
(03:18):
about this kind of stretch from late nineties into the
early two thousands. I mean, I remember, you know, I'm
a kid growing up in Sanmadadino, California, but you're not
familiar with it. It's about an hour east of La
Nobody really goes there, right, and I'm feeling like, shoot,
I don't have to leave Sammonddino. Everything I want I
(03:39):
could find it on the Internet. I could learn to
do anything. I can connect with anybody. I remember the
first time I was talking with somebody on aim and
it was incredible. I can just talk to somebody on
the other side of the planet for free, you know,
as long as I pay the dial up bill, right,
And it seemed like something new was coming out every
year where I'm going to be able to just do
(04:02):
things that I never even thought were possible. And there
was definitely a time where everything felt optimistic, but the
optimism seemed realistic.
Speaker 3 (04:11):
Yeah it did.
Speaker 2 (04:12):
And you know, even going further back, I grew up
in a very kind of hippie environment.
Speaker 3 (04:18):
I actually was living in Canada.
Speaker 2 (04:20):
I went to a school where all the grades were
kind of combined into one. And you know, that was
its own kind of utopian movement back in the sixties
and seventies. And I think a lot of us thought
that the Internet was kind of the instantiation of a
lot of the ideas from that era. You know, you
(04:40):
were going to let people connect with each other, and
as soon as people connected, you know, of course there
would be peace. Right, all right, all violence and problems
are misunderstanding.
Speaker 1 (04:49):
All we got to do is just talk to each other.
Will be good, Yeah, we'll be good.
Speaker 2 (04:53):
I remember a friend of mine said, like, the Internet
is like Esperanto. Do you know Esperanto the language?
Speaker 3 (04:59):
Yes?
Speaker 1 (05:00):
Oh my gosh, yes, I made the mistake of spending
about a couple weeks trying to learn Esperanto. Yes, yes,
but yes, so Esperanto basically the language that the idea was. Listen,
we need to leave aside all the national languages. We
create a new language, and that will allow for equality
because we'll all literally speak the same language, will all
(05:22):
actually be on the same page. That will lead us
into this really promising future. And some people really dedicated
themselves to.
Speaker 3 (05:28):
It entire lives, entire lives.
Speaker 2 (05:30):
And my friend had you know, saw the Internet as Esperanto,
the successful version, you know, like it had actually eliminated.
Speaker 3 (05:39):
They believed all the.
Speaker 2 (05:41):
Differences between computers and ultimately between us, and you know,
that was the original idea basically of cyberspace, which was
like this better world that was the like the Internet,
no one knows you're a dog era where you're going
to pretend to be like somebody else, and that would
be liberating. Maybe I'm just like whoever, I am like
half Asian dude, but in cyberspace, I don't know, like
(06:04):
a blue space alien or something.
Speaker 1 (06:06):
Right, and that's a beautiful thing. Yeah right, Okay, Then
what happened? So as Tim was starting research for his book,
he looked at Google, not as in he was searching
up things on the Google search engine. He started looking
at Google LLC as a source, or at least as
a symbol of how tech companies went from seemingly visionary
(06:26):
to obviously exploitative.
Speaker 2 (06:29):
There was Google. It started at a university at Stanford.
It was originally housed on some random computers. Then it
was in a garage, so it had all these kind
of idealistic settings. Their early talk was very idealistic. We
just want to organize the world's information.
Speaker 3 (06:45):
There was this.
Speaker 2 (06:45):
Idea they had that our main goal is to take
you where you need to go. We're not going to
hold on to you. We just want to show you
the way. Their slogan was don't be evil.
Speaker 3 (06:57):
Yeah.
Speaker 1 (06:58):
I mean I remember being a genuine fan of Google.
I mean I was like an unplayed employee. Man, Gmail
came out. I remember having my Gmail invice. You remember
that where you you They didn't give it to everybody,
so you had a limited amount of invites. Man, I
was passing those things out. Every new thing that Google
came out with. It felt like, I don't want to
(07:20):
say a utopian future, but it felt like everything was
going to be interesting and amazing and convenient and helpful.
I mean, how can you argue against that?
Speaker 3 (07:30):
Yeah? No, I agree, and I shared that feeling.
Speaker 2 (07:34):
I thought there was something very well intentioned about Google,
the early company. I mean, some of your listeners might
be like, what are they talking about?
Speaker 1 (07:43):
Who are these Is there something wrong with them?
Speaker 3 (07:47):
Right? But no, I think they're very well intentioned.
Speaker 2 (07:50):
A lot of my friends who were like in another
era might have gone to work at nonprofits, went to
go work at Google because.
Speaker 1 (07:57):
They believed in the mission.
Speaker 2 (07:58):
They believed in it, and the early Google, you know,
didn't have a business model, and then they kind of
grudgingly took on advertising, but said all the stuff, how,
we're just gonna be totally different kind of advertising. It's
gonna be actually stuff you really.
Speaker 3 (08:12):
Want because you're looking for it anyway.
Speaker 2 (08:14):
So it's not gonna be annoying, it's not gonna be cluttery,
it's not gonna mess with things, you know.
Speaker 3 (08:19):
The founders had.
Speaker 2 (08:20):
Already written a paper where they said that advertising rex search,
so they were already on record on saying that like
paid search, where whoever pays most gets the top link,
is a terrible thing.
Speaker 1 (08:33):
Actually, let's get specific about that paper. It came out
in nineteen ninety eight and it's titled The Anatomy of
a large Scale Hypertextual Web Search Engine. And in that paper,
Sergey Brandon Larry Page, the founders of Google, wrote the
following quote, the goals of the advertising business model do
not always correspond to providing quality search to users. And
(08:56):
later on they say that quote, we expect that advertising
funded so search engines will be inherently biased towards the
advertisers and away from the needs of the consumers. End quote. So,
just to summarize, almost thirty years ago, the founders of
Google said in public that ads would bias search engines
and make them worse.
Speaker 3 (09:18):
So what happened.
Speaker 2 (09:19):
So they started making money, and then they made this
decision in the early two thousands that they were going
to go public.
Speaker 3 (09:27):
But they had this idea.
Speaker 2 (09:29):
We're going to go public, but we're not going to
do it like normal.
Speaker 3 (09:33):
We don't want to become evil.
Speaker 2 (09:34):
So they wrote this big, long letter to their shareholders
and it starts with like, we're.
Speaker 3 (09:40):
Not a normal company. We don't want to be a
normal company.
Speaker 2 (09:43):
We're going to do all these things that are you're
going to think are terrible, like crazy projects. We're going
to care about our users, not our advertisers. Don't be
evil as our model, on and on and on.
Speaker 1 (09:54):
In that two thousand and four letter, the founders wrote, quote,
Google is not a conventional company. You do not intend
to become one.
Speaker 2 (10:02):
But but they still decided to become a regular for
profit Delaware corporation, which means that they're registered in Delaware,
which has basically the loosest requirements for a corporation and
is the standard in corporate America.
Speaker 1 (10:20):
Okay, yeah, standard, that is what conventional companies do. But
remember Google said they weren't conventional, and as Tim points out,
it didn't have to go that way.
Speaker 2 (10:31):
They could have maybe done things differently at that point,
set up something either as a nonprofit if they really
believe this stuff, they could have been the kind of
corporation that is not necessarily for profit, what's called a
B corp, like Pantagonia. But they chose the normal Delaware
corporate form that every evil corporation in the world has,
(10:54):
and then you know, over the next ten or fifteen years,
they proceed to violate it, basically every promise in that letter,
and right the reason was, I mean, it's so predictable.
They had pressure to continually increase revenue, and ultimately that
(11:15):
meant they had, in fact, to treat advertisers better than
their users. That means they had to have more and
more and more ads. It means they had to cut
projects that didn't make sense. I mean, scripture says no
man can obey two masters, and they believed that they
were different. I think it's the original sin of Silicon Valley,
maybe of America, is that we have this belief that
(11:38):
we can have our cake and eat it too, obey
the interests of their users and consumers, and also their
advertisers and also their investors.
Speaker 1 (11:47):
I believe that you're the first person on this show
to quote the Bible to me. But that's pretty appropriate
because in some ways, no, for real, it does feel
like we actually have straight from that light that felt
really you know, people were truly evangelical about the promises
(12:07):
of Silicon Valley, the promises of technology, but even specifically
about companies. I really remember, you know, myself being one
of them, felt really really optimistic about what Google was
doing and what Google could do in the future. For
most of us, though, I feel like they kind of
fell out of that light for us as a gradual process.
Most people probably couldn't tell you a time when they
(12:30):
stopped feeling good about Google. But you have a very
specific date that you point to in your book that
you feel like was a specific turning point a day.
Speaker 3 (12:41):
Yes, it's a second.
Speaker 2 (12:42):
The first is the decision become a for profit company.
The second was June eleventh, twenty thirteen. That's the fall of.
Speaker 3 (12:51):
The early Internet.
Speaker 1 (12:54):
This is where things get interesting for me. The date
when tim says, the utopian promise of the early Internet
died forever. We'll get into why after the break. Okay,
So some background on that date of June eleventh, twenty thirteen.
(13:17):
So first we actually have to go back to two
thousand and six to a project made by an Israeli
programmer called FreeMap Israel. What made this project interesting was
not only that it was free and it helped you
with figuring out directions on where you wanted to go,
but that everything was crowdsourced, even the traffic information, and
this became its defining feature, and they had the tagline
(13:37):
out smarting traffic Together. Pretty soon FreeMap Israel had expanded
globally and had changed their name to something that you
might recognize, Ways. So Ways got popular pretty quickly because
of that crowdsourced information. It was genuinely useful. It would
warn you about an accident nearby or if police were
up ahead, so you could change your travel route or
(13:59):
your travels speed accordingly.
Speaker 2 (14:03):
So it was emerging as a challenger to Google Maps.
And here you had these two kind of I guess
models of the future. So what happened in twenty thirteen
in June the contest was.
Speaker 3 (14:16):
About to start.
Speaker 2 (14:17):
It pitted Google, which had a more traditional map program,
against Ways, which was based on user contributions, and the
competition was on for the future, and all of a sudden,
Google just bought Ways.
Speaker 1 (14:30):
At this point in time, on one side, you had
Google Maps, which said they had a billion users, and
on the other you had Ways, which was reporting around
fifty million users. But they were growing and really quickly.
So Google opened up their wallet, pulled out reportedly about
a billion dollars, and just bought Ways. They let the
app itself continue to operate, but some of that really
(14:50):
valuable data that weays it generated, like that crowdsource traffic information,
all of that was incorporated up into the new mothership
of Google Maps.
Speaker 2 (15:00):
They used, you know, frankly, a method pioneered by John Rockefeller,
which is, if you have problems with the competitor, buy them.
I remember being pretty shocked that that happened. Now we
go to the law, which is my particular area of expertise,
and there is a law called the Clayton Act, you know,
the anti monopoly law, which says you're not supposed to
(15:22):
be allowed to merge companies to create a monopoly and
I think you do not need to be a sophisticated
economist to say there's two mapping programs, one buys the other,
that's a monopoly.
Speaker 1 (15:35):
Yeah, pretty cut, dry cut and try.
Speaker 2 (15:38):
So it went to the Federal Trade Commission, which is
the agency one of the two agencies that tries to
block illegal mergers, and Federal Trade Commission said, fine, no problem.
Speaker 1 (15:51):
So this is pretty strange. The FDC initially said that
they were going to look into this acquisition, but a
couple months later they stopped the investigation and they let
the purchase go ahead.
Speaker 2 (16:02):
I remember I was had been working there, right, and I
was like, how did they get to that conclusion? As
far as I can tell, this looks pretty much like
a merger of monopoly that that reduced competition. So I
never I didn't find the answer out to that question
for many years until one day I was at a
anti trust party.
Speaker 3 (16:19):
I was hanging out.
Speaker 4 (16:22):
I was trying back up the anti trust party, Like,
I was, what does the party full invite look like
for that the anti trust party? We just like pull up,
we canna talk about anti trust, Like if you like monopolies,
don't come like what.
Speaker 2 (16:35):
Basically, yeah, okay, it's a thing.
Speaker 1 (16:39):
It's a thing. Invite me next time I'm down. This
sounds great, you.
Speaker 3 (16:42):
Know, it's like, it's a pretty cool crowd. They're not bad.
Speaker 2 (16:46):
Matt stolers there, Lena Kahn will be there. Like, it's
a bunch of people. So I was at this party
and I was having drinks and I realized one of
the person I was drinking with had worked on that case.
So it was after a while I was like, so, like, what,
you know, what went down? How did that happen? And
she said, well, you know, I know, look kind of bad.
(17:08):
But the boss said we should let the merger go through.
And he said, here was his theory that Google is
what you use when you want to figure out where
you are, and Ways is what you use when you
want to figure out where you're going.
Speaker 3 (17:26):
Huh, I'll say it again.
Speaker 2 (17:28):
Google is where you go when you want to figure
out where you are, and Ways is what you use
if you want to figure out where you're going.
Speaker 3 (17:34):
So they're not really competing.
Speaker 1 (17:36):
You have just described a map, like the two core
functions of a map.
Speaker 2 (17:44):
Yeah, so they were not forced to release that reasoning
to the public, but that's what happened, and the reason
I pinpoint on that point. I think that point early
twenty tens is when the Internet really started to turn,
and it is because the first generation of companies, people
like Google, started becoming threatening by new guys, not just Ways, Instagram,
(18:08):
a whole bunch of other companies, and as opposed to
fighting them, as opposed to competing, they just started buying them.
Speaker 1 (18:15):
We reached out to the FTC for comment on Tim's
account of this story. As of this recording, we haven't
heard back. So for a while, this acquisition thing was
a trend big tech companies would just buy their competition.
Instagram was starting to become a popular place for people
to connect online, so Facebook bought them. They also bought WhatsApp.
Maybe you remember when Zappo's was getting really popular as
(18:37):
a place to buy shoes online, and then Amazon bought
them to add to their online shopping empire. They also
bought Whole Foods. Microsoft picked up LinkedIn and GitHub. The
next year after getting Ways, Google bought an AI company
called DeepMind. I could keep going here. Tim worked on
a study a while back that showed them, between two
thousand and seven and twenty eighteen, Google and Facebook just betwre.
(19:00):
The two of them collectively acquired over three hundred and
fifty companies. The federal government let all those acquisitions go through,
and that study closes with this line of commentary. As
with a basketball referee who never calls a foul, the
question is whether the players have really been faultless, or
whether the referee is missing something. What might things look
(19:24):
like if Google had not bought Ways?
Speaker 2 (19:26):
You know, I think that what was lost in that
acquisition was the chance of a full fledged rival, you know,
to Google, and another ecosystem, two different, fully functioning ecosystems
that offered you a real alternative because so much turns
on maps as sort of a foundation and a good
search engine, and if you imagine it growing, if you
(19:50):
imagine it development itself. It also was, as we said,
this kind of different user based business model, and who
knows where that would have gone.
Speaker 1 (19:58):
I mean, within the Google War.
Speaker 2 (20:00):
They were supposedly separate, but they were under ultimately the
command of Google, and ultimately the founders all left and
expressed extreme disappointment they had ever done this.
Speaker 1 (20:12):
In twenty twenty one, the CEO of Ways from before
the acquisition left the company. He wrote a blog post
about why he was leaving, and he also reflected back
on when he sold to Google back in twenty thirteen,
and you can tell he regrets it. It almost reads
is less of a resignation letter than an apology letter
to society in general. And there's one line that hits
pretty hard here quote looking back, we could have probably
(20:36):
grown faster and much more efficiently had we stayed independent, And.
Speaker 3 (20:41):
I think we lost the chance.
Speaker 2 (20:44):
I mean not only through ways, but a million little acquisitions,
a million different aquihiers of having a truly more decentralized
economy that was one in which spread a lot more
wealth to a lot more people. Instead, it has concentrated
wealth and a very small number of people.
Speaker 1 (21:02):
Acquisitions are just one method of maintaining a monopoly. In
his book, Tim lays out a bunch of other tactics.
They're used by tech giants, including Amazon.
Speaker 2 (21:11):
So Amazon Marketplace, I guess fifteen years ago really was
in some ways carrying out the early dream of the Internet.
It was making a lot of people rich at the time,
they charged twenty percent, only twenty percent of fees, and
then they would ship your products to people, and a
lot of people started making a lot of money. I
(21:32):
have in my book stories about like this Indiana barber
who start selling palmade as a side business and suddenly
is like making millions of dollars. But then Amazon, once
it kind of had everybody, It had all the sellers,
it had the buyers, you know, locked in with Prime
or whatever, then it just started turning all the knobs.
(21:54):
They started adding what they called advertising fee for sellers.
So you know when you search an Amazon on if
you use Amazon, but you get like, hey, I'm looking
for slippers, and you get a bunch of sponsored results. Yeah,
those turned into a huge cash cow for Amazon because
the sellers bid against each other to get those spots,
and they don't feel they can sell without them, and
(22:16):
they started making more and more money. When I released
this book for twenty twenty four, they had made something
like fifty six billion from those sponsored links alone. So
that's more than double the revenue of every single newspaper
on the entire planet Earth. Ugh, and it's almost no costs.
(22:36):
It's actually more lucrative than Amazon Web services. I looked
into it this year twenty twenty five, and it looks
like it's gonna be over seventy billion dollars a pure
profit and.
Speaker 1 (22:45):
It's only going out Wow, and it's providing nothing for
me as somebody who just wants to buy slippers.
Speaker 2 (22:51):
The other way around is making it worse, it's making
it harder, true fine stuff. So you're paying, we are
collectively paying seventy billion dollars to degrade our experience. It's
like completely valueless extraction.
Speaker 1 (23:06):
So we've got companies actively taking money from you, taking
it from small businesses and making your life worse. Whose
idea was this, Well, it turns out we could probably
point to a couple people we get into who After
the break back in the early two thousands, there were
(23:29):
a lot of books aimed at casual readers who were
curious about how technology might reshape the economy. They had
titles like Small Is the New Big and the Rise
of the Creative Class. These books were really optimistic and
they reassured people that tech innovation would lead to more
opportunities for the little guy. But then came another way
of books, and these were aimed directly at influencing the
(23:50):
people who were in Silicon Valley who were starting these
tech companies, books with titles like blitz Scaling and then
There's Zero to One, a book written by Peter Teal
who famously said quote competition is for losers, and he
argued that monopolies are good for society.
Speaker 2 (24:08):
Part of this was just sort of business instinct, frankly,
a very old one, not dissimilar to the old Robert
barons of the nineteenth century who were like, you need
to build a giant empire and control everything. But actually
somewhat like them, they could have clothed that. They were like, well,
when you are a monopoly and when you dominate your
entire industry, you have enough money to treat your employees better.
Speaker 1 (24:31):
One of the books that you bring up is blitz Scaling,
and it's specifically referencing Blitzkrieg, which is kind of incredible
that we've just got a book which is basically recommending
follow the war plans of World War two Germany.
Speaker 2 (24:50):
I think riad Hoffins said one of his interviews, He's like, well,
I mean that's the whole idea. You don't carry too
much stuff, you don't get too busy and move fast.
So that was my business strategy. And if if you
read Peter Teel, it has, you know, a certain level
of practical wisdom and it's well written, but if you
have an academic background, you can see very clearly that
(25:10):
it's channeling kind of niche and theory of an ubermensh.
The monopolist, in his view, is kind of a superior
race of people, and there are clearly, in his view,
like men who are destined to bleed and rule, and
then like lesser creatures who are destined to serve.
Speaker 1 (25:28):
So let me posit the counterpoint to that, which is
to say that, look, okay, you talking about whole bunch
of big economics game.
Speaker 2 (25:35):
I'm not interested in that. I just want the APT
to work, right. That's what I think is kind of
clever and insidious about it. The business model feats on basically,
as I say in the book, a very profound bet
on human laziness, you know, like ultimately what the most
of us want from technology, just that it works. As
you said, you know, we don't want to have forty
(25:57):
options most of the time.
Speaker 1 (25:59):
And I know you bring in cow cochlock. I love
to love you to hit me with that, because that's
one of my favorite parts of the book.
Speaker 3 (26:04):
So the power of couchlock.
Speaker 2 (26:07):
That's a term from the I guess we call the
marijuana community, which refers to fact that when you get couchlocked,
you're like unable to move, Like even a nuclear weapon
is coming at your house. You're just like, oh, I
guess that's just gonna happen.
Speaker 1 (26:24):
You just get get real high and you just on
the couch is like, yo, we gotta go. It's like, bro,
I'm sorry, I'm I can't move, man. I feel like
a weigh a million pounds. I'm not leaving.
Speaker 2 (26:33):
And in business terms, it's kind of like, let's say
you're buying something on Amazon. You're like, hey, there's this
better deal over here. It's twenty dollars cheaper, but you
have to sign up for something. You're like, ugh, I'm good,
I can't do it. You know, like you just think
the small amounts of irritation just are unfathomable. So I
think frankly, couchlock rules the web at this point, and
(26:55):
it tends to create monopoly, and at some point I think, look,
I don't want to say people shouldn't be lazy. I
don't want to pretend people. I just think if that's
what it's going to be, then we need a better deal.
Like if there's just going to be a couple of monopolies.
We need a better deal, and we need to have
them spread the wealth a bit better.
Speaker 1 (27:13):
I love this. We've gone from quoting the Bible to
talk about weed this. This is a great conversation. So Okay,
let's say nothing changes. Let's say things keep going on
the way that they're going on. Where are we headed
right now?
Speaker 3 (27:27):
Yeah?
Speaker 2 (27:27):
I mean I discussed in the book what I call
the real road to serve them, which is the way
in which a monopolized economy tends to lead to a
rise of an autocratic leader. And frankly, I think we're
pretty far down that road, I got to say, And
I think it happens this way. You allow too much
of the economy to become monopolized, it takes too much
(27:49):
money from people. They become cynical, angry about democracy. You
then have a possibility for democracy to fix it. And
that's why I'm advocating need to do something. If not,
people get more and more angry and increasingly say, all right,
I don't believe in democracy.
Speaker 3 (28:06):
It can't do anything.
Speaker 2 (28:07):
I need some strong leader who's gonna put me first
and directly deliver the.
Speaker 3 (28:13):
Money to me.
Speaker 2 (28:15):
And I think that is the way you see the
rise of the populist dictator, and around the world. I'm
not just talking to the United States, so there's obvious
parallels the United States around the world. There's been dictators
who have come to power in our era on the
back of economic dissatisfaction.
Speaker 1 (28:32):
I hope that there are some members of Congress who
have read your book and who are listening to this podcast.
I suspect, however, that the vast majority of the people
who are listening to this, who are watching this are
not members of Congress, are not directly able to push
those levers of government. What is an individual able to do?
Speaker 2 (28:51):
I think you have to in terms of citizen voting,
be serious about people who truly serious about the threat
of monopoly power, and don't just like say a few
things and then quietly vote. I mean, I worked in
the White House, and I worked on trying to get
bills passed. And there's a lot of people who take
too much money from tech platforms and when push comes
(29:11):
as shove will never do anything to limit their business model.
You have to be really careful who you vote for
and their stances on monopoly.
Speaker 1 (29:19):
Okay, I know we're getting back into politics. Here, But
ultimately this is where stuff ends up because scolding individual
people for continuing to use Apple products or Google products,
or trying to tell somebody to stop shopping on Amazon,
it's not going to get us anywhere.
Speaker 2 (29:35):
Look, we have this illusion that we individuals can stand
out the companies that are so much more powerful than
we are. And I think we have learned and we
know that in every society, every civilization, there are going
to be platforms that are essential. And I was in
Rome with my kids earlier this year and go to
(29:56):
ancient center of Rome, and there is the forum, which
is like that place where they have markets, they sell stuff,
they also have speeches, they have the core. Everything is
happening there. There's always been there, and so it's no
answer to say, well, if you don't like where everything's happening,
go somewhere else.
Speaker 3 (30:12):
That's not really an answer.
Speaker 2 (30:13):
There's always going to be essential platforms, and in our
times they are companies like Amazon, and somebody's exes its
own essential platform of speech. Unless you're going to become
you know, hermer who lives in the cave, you cannot
ignore that we have these essential platforms. But the platforms
have a problem of main character syndrome. They think they
(30:34):
are it, you know, they think they're the story. But
they are supposed to be the sort of servants of
the rest of the economy. You know, we've dealt with
this problem before, like.
Speaker 3 (30:43):
With the trains.
Speaker 2 (30:44):
This was a big problem in the nineteenth century. We've
like forgotten our own history because we're calling stuff tech.
So I think the government should control and limit what
they're able to do and also how much they charge.
At some level, they need to be treated more like utilities.
I mean, think about the electric network and how we
limit how much they can charge you. If you didn't,
what would the electric company do? They'd say, all right,
(31:07):
want to give me one thousand dollars a month or
ten thousand dollars a month. You'd say no way, and
they'd say, okay, how does it feel to have no electricity?
And I think we need to think of these platforms
more like electricity, which is the platform for the rest
of us. I also think they need to be under
constant anti trust attention. But since this is not an
anti trust party, I will get into that too much.
Speaker 1 (31:29):
So we've talked about that turning point that was in
twenty thirteen we're constantly now talking about all right, we're
probably it's some kind of inflection point for AI. Yeah,
where do you see that playing out?
Speaker 2 (31:43):
Let me say something positive about AI before I turn
to darker possibility. Okay, sort of positive vision of AI
is that it actually is a great challenge to the
tech platforms.
Speaker 3 (31:57):
Maybe.
Speaker 2 (31:58):
I mean, I was using open Ai earlier today for
various things, and as far as I could tell, I
didn't see a single ad or give any money to Google.
I used it for a lot of things I would
have used Google for maybe in the old days. And
I also, I think was looking for some products and
didn't have to go through you know, Amazon's.
Speaker 3 (32:16):
Insane sponsored links. So there is a possibility.
Speaker 2 (32:20):
And one of the things I have a big believer
of in technology is you need a constant cycle of challengers.
So AI could be a challenge to the platforms and
could shake things up. And that's a very positive view.
The negative view is that it would reinforce the power
of the platforms, make them almost entirely invulnerable to competition,
(32:42):
give them more of a government like status, and make
us even more couch blocked than before, where not only
can we not think about getting up to get a
different company. We can't even like write our own emails,
you know, where you just feel so totally dependent that
it's like the sup of armor. You become like this
ineveted kind of creature and you have to climb into
(33:03):
your suit of armor to do anything. That's the scary future,
as we're so utterly dependent, we can't do anything without it.
Speaker 1 (33:10):
You know. There's are you a hip hop fan?
Speaker 3 (33:13):
Somewhat?
Speaker 1 (33:14):
There's a track on DJ shadows introducing album, and it's
called why hip Hop Sucks in ninety six. It's very
short track and all it is it's a little bit
of background music plays and then a guy's voice says,
it's the money, money, Money Money track ends. That's it.
(33:39):
It sounds to me like that's almost a soundtrack to
some of your book, which is to say that we
came in with all this optimism thinking, you know, our
ideas and our beliefs and all this other stuff is
going to really push us forward. And then it seems
like a lot of what screwed this up, honestly, is
just people fell victim to the promise of the money.
Speaker 3 (33:56):
Cashules everything around me. Dollar dollar billion.
Speaker 1 (34:02):
There we go, there we go. But that's what it is.
Speaker 2 (34:08):
Here's what I think is my ultimate prescription is if
we as really believe something like we did in the
early thousands, you have to create structures to control the
power of money to corrode it. Structure beats out good
intentions because everything is going to get corrupted and turn
to shit by that creeping need for more and more
(34:32):
little pieces of money. It's sort of like the way
if you want a nonprofit, you can't be a nonprofit
like the Red Cross and also have little profit stuff
on the side. You can't say, basically, we're about saving
people and disasters. Oh and also we advertise and hold
parties on the side or something or I don't know,
you know, whatever it else or we sell we sell merch,
We sell merch because the merch part is going to grow.
Speaker 3 (34:53):
You have to be strict about this.
Speaker 1 (34:54):
Stuff. Can't serve two masters.
Speaker 2 (34:56):
That's right, where else it creeps, you know, to give credit.
Wikipedia took a different path. Wikipedia in the early two
thousands had roughly the same traffic as Google, if not more.
They had a very easy path to riches and Jimmy Wales,
who's the head of it. You know, It's almost like
every morning he woke up and he had a button
(35:18):
marked like billionaire that he could have pushed, and he didn't.
And he's like, if we ever have advertising a Wikipedia,
it's going to turn the shit. And like, Wikipedia is
not perfect, but it is a nonprofit. It makes plenty
of money by donations and it hasn't crept into this
in this thing. So I say it again, structure beats
good intentions. If you believe in something, you got to
(35:39):
start at the beginning and structure it right, or else
it's going to fall prey to the creep of cash
rules everything around me.
Speaker 3 (35:46):
Cream get the money.
Speaker 1 (35:52):
Thank you so much for listening to kill Switch. If
you want to hit us up, you could email us
at kill Switch at Kaleidoscope dot NYC or on Instagram.
We're at kill Switch Pod and if you got a
second please do leave us a review, give us a rating.
It helps other people find the show, which helps us
keep doing our thing. And once you've done that, did
you know that kill Switch is on YouTube? You can
(36:14):
search for us there at kill Switch underscore pod or
the link for that and everything else is in the
show notes. Kill Switch is hosted by me Dexter Thomas
It's produced by Shena Ozaki, Darluk Potts, and Julian Nutter.
Our theme song is by Me and Kyle Murdoch and
Kyle also mixed the show. From Kaleidoscope, our executive producers
are Oswa Lashin, Mangesh Hadikadur and Kate Osborne. From iHeart,
(36:37):
our executive producers are Katrina Norville and Nikki Etur. That's
it from US. Catch on the next one. Good Fine,
kill switch News
Hosts And Creators
Oz Woloshyn
Karah Preiss
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